Monday, December 11, 2017
  Se-lu 18, insolvent edition

Headlines in the 'econ' websites: Bulgaria confiscated a large amount of Bitcoin in a raid on criminals last year, and now the Bitcoin is "worth" enough to pay off a meaningful fraction of Bulgaria's national debt.

Let's return to the definitions of solve and solvent:
I always pay paper cash in stores now, partly because it's fast and certain, partly to remind myself that I'm firmly SOLVENT and don't need the bad old credit.

SOLVENT. Seems like a completely inappropriate word for 'got money'. How did that happen?

The etymology is beautiful.

The original Latin solvere meant 'loosen, untie knots, split apart.'

The most common meaning is untying the knot of a problem. Latin solve = Greek analyze = determine where to cut the rope. Slightly less literal but still easy.

Solvent as 'got money' was later and more metaphorical. Around 1600 when banks and currencies started to branch away from gold, solvent came to mean able to cut the ropes of debts, able to clean up obligations.
Is Bulgaria more solvent now? No, because trying to "sell" 3 billion at once will mess up the wildly swinging "market" for Bitcoin. The value will drop in the middle of the transaction.

Same thing happens when gov't confiscates old-fashioned criminal assets like heroin or stolen jewels. The heroin can only be sold on the criminal market, so it has no value in legit circles. The gov't is obligated to return the stolen jewels, not fence them.

Therefore: Bitcoin is not an asset for people who are operating legally. It doesn't make you more solvent because it can't be used reliably to untie or loosen the ropes of debt. The Bulgarian government is stuck with an "asset" that it can only hold and watch. Unlike heroin and jewels, it doesn't even have direct sensory enjoyment value.

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Polistra was named after the original townsite of Manhattan (the one in Kansas). When I was growing up in Manhattan, I spent a lot of time exploring by foot, bike, and car. I discovered the ruins of an old mill along Wildcat Creek, and decided (inaccurately) that it was the remains of the original site of Polistra. Accurate or not, I've always liked the name, with its echoes of Poland (an under-appreciated friend of freedom) and stars. ==== The title icon is explained here. ==== Switchover: This 2007 entry marks a sharp change in worldview from neocon to pure populist. ===== The long illustrated story of Polistra's Dream is a time-travel fable, attempting to answer the dangerous revision of New Deal history propagated by Amity Shlaes. The Dream has 8 episodes, linked in a chain from the first. This entry explains the Shlaes connection.

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