Imagine with me…
A couple in Miami works two jobs and still cannot afford a starter home. The higher cost of food, fuel, and rent eats up every raise they get. A small restaurant owner watches her prices climb, but her profit margins shrink because suppliers and landlords raise rates faster than she can. A young adult dutifully makes student-loan payments but realizes that the money he saves buys less each year. None of these people has done anything wrong. They live in an economic system designed to reward those who already own appreciating assets and punish those who live on earned income. Instead of working for you, your money melts your wealth.
The mechanism of the imbalance
The U.S. government has run persistent deficits for decades. To fund spending that exceeds revenues, it sells Treasury bonds, bills, and other securities. When deficits recur, the debt grows. Servicing that debt becomes an expense of its own; interest payments add to annual spending. In fiscal year 2025, the Congressional Budget Office projected a $1.6 trillion deficit and warned that the debt-to-GDP ratio would rise from 99% in 2024 to 116% by 2035. Net interest costs already exceeded Medicaid spending in 2023 and are projected to surpass defense spending in 2024. The Peterson Foundation notes that interest payments will be the fastest‑growing portion of the federal budget, rising from about $1 trillion in 2026 to $1.8 trillion in 2035, and that the United States paid $970 billion in interest in 2025.
Governments finance growing debt through money creation. Every deficit dollar becomes a new Treasury security held by banks or the Federal Reserve. When central banks expand the money supply to buy these securities, newly created money enters the economy unevenly. As political economists note, Richard Cantillon observed in 1755 that the first receivers of new money benefit by paying off their debts before prices adjust, while later receivers see their purchasing power decline. This Cantillon effect means monetary expansion changes relative prices: those closest to money creation (banks, government contractors, leveraged investors) enjoy a boom; wage earners and savers face eroding cash balances.
Inflation follows. Consumer prices surged to almost 9% year‑over‑year in June 2022 before moderating. Not all households experience the same inflation or wage growth. A Federal Reserve Bank of Cleveland study found that households in the bottom 40% of the income distribution experienced higher inflation than the headline Consumer Price Index, while the top 20% faced lower inflation. Although low‑wage workers briefly enjoyed faster nominal wage growth, median and top‑decile workers saw real wages decline. By late 2024 the bottom and middle 40% had 4.5 percentage points more cumulative wage growth than inflation since 2019, whereas the top 20% recovered only 3.5 points of purchasing power. This uneven distribution of inflation and wage dynamics amplifies inequality.
Asset holders win twice. Low interest rates and QE drive up the price of equities, real estate and other scarce assets. Those assets can be pledged as collateral to access cheap credit. When credit is abundant, leveraged investors borrow more to buy more assets, compounding their wealth. Meanwhile, people who work for wages or keep cash savings are hit by rising prices and have no collateral to borrow against.
Such is the design of the system. The Cantillon effect and central bank rate setting ensure that access to cheap money is restricted to privileged institutions. Ordinary families pay higher rates on mortgages and credit cards, while hedge funds borrow near the Fed funds rate. The result: the rich get richer by owning assets and leveraging them; the poor and middle class see their wages lag and their purchasing power fall.
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The ‘HODL’ argument, steelmanned
BTC advocates call this the “fiat debasement” problem and suggested a simple cure: buy and hold (or “HODL”) a scarce digital asset whose supply is capped. The thesis is direct: BTC’s hard cap of 21 million coins protects wealth from inflation and removes central banks from the equation. When governments print dollars, your BTC becomes more valuable. Buying Bitcoin early is similar to buying land before a gold rush.
That argument resonates because it identifies the problem: monetary inflation. It also offers a personal hedge. Anyone with an internet connection can swap dollars for BTC and store it in a self‑custodied wallet. HODLers proudly refuse to sell despite volatility, trusting that scarcity will reward patience. They see BTC’s rising price as proof that they are beating the system.
Their logic also applies to buying stocks and precious metals, which, interestingly, have outperformed BTC to varying degrees in the last few years.
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Why BTC fails to protect the masses
The HODL thesis is only functioning on a partial diagnosis of systemic problems, though. It mistakes scarcity for usability. BTC’s network has, by design, limited throughput; its 1 megabyte block size and constrained consensus rules mean only around seven transactions per second can settle on chain. When demand spikes, transaction fees skyrocket. In 2023, as Ordinals inscriptions flooded block space, median transaction fees swung from 0 sat/vB to over 350 sat/vB (or hundreds of dollars per transaction). Bitcoin Magazine reported that users with many small UTXOs saw their holdings “turn into dust” because fees exceeded their balances. UTXOs of 0.001 BTC became unspendable under high fee conditions. That is not a hypothetical bug; it is a reality many users faced in 2023 and for different reasons in 2017-2018.
Mempool congestion doesn’t just inconvenience speculators; it is a moral issue. Lightspark notes that mempool flooding creates backlogs, delays confirmations, and forces users to pay higher fees. During these episodes, legitimate transactions wait hours or days. The competition for block space turns the network into a privilege auction. Wealthy users can outbid the poor; small payments become impractical.
Additionally, BTC’s supply opacity undermines its “hard money” promise. Sure, anyone can see what’s on chain, but most BTC is held in custody by entities who deliberately obfuscate supply and transactional data to enhance profits inside their walled gardens. Exchanges and custodians may maintain fractional reserves, but there is no on-chain audit to verify their solvency. The actual supply is capped, but the practical supply is pure “trust me, bro,” which hasn’t ended well for customers of FTX, QuadrigaX, and dozens of other exchanges that have gone belly-up for running Ponzi schemes.
When the network is congested, hardware wallets and small holders cannot access liquidity. If panic ever drives masses to sell, the network’s limited throughput ensures that only a few transactions settle per second. The rest wait. In other words, BTC fails the people it claims to liberate when they need it most.
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What a real fix requires
If the goal is to replace inflationary fiat and empower the broad population, a monetary system must meet four criteria:
- Transparent, auditable issuance. People must know how many tokens exist, where they are held, and whether reserves back them. Treasury markets rely on public auction data; a blockchain currency should do the same.
- Predictable supply rules. A system should commit to a supply schedule that is enforced by protocol and visible to all.
- Low fees for everyone. Payments should cost fractions of a cent so that even a $0.01 microtransaction is economical.
- Open credit markets. Interest rates should emerge from voluntary exchanges of capital and risk, not from central bank decree. Anyone with collateral should be able to borrow at a rate set by market supply and demand.
The combination of these features would eliminate the Cantillon effect by removing privileged access to newly issued money and ensuring credit allocation is transparent and competitive. It would also preserve the monetary property that BTC proponents value (scarcity) without sacrificing utility.
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Why BSV fits the requirements
BSV implements Bitcoin as it was originally designed: a scalable, auditable peer‑to‑peer electronic cash system. BSV rejects the artificial block‑size limit introduced by BTC developers and restores a simple rule: miners can process as much data as their hardware allows, and users pay fees based on market forces. This one design difference changes everything.
The BSV network regularly processes tens of millions of transactions per day. A report by BSVData noted that in April 2022, the network processed over 10 million transactions in 24 hours, averaging 125 transactions per second. Despite that volume, the average fee per transaction was less than 1/20th of a U.S. cent. In May 2025, a stress test pushed the network to 152 million transactions in a day, averaging 1,800 transactions per second, with an average fee of US$0.00137. These numbers are orders of magnitude above BTC’s capacity. Even at peak throughput, fees remain low because the supply of block space expands. That means micro‑payments are viable at scale.
BSV’s design also enables on‑chain stablecoins that are fully collateralised and auditable. MNEE announced in 2024 (and launched in 2025) a USD‑backed stablecoin built on BSV that is redeemable 1:1 for dollars and collateralised by U.S. T‑bills, USD cash, or other stablecoin equivalents. MNEE operates as a licensed custodian and will undergo full audits with attestation of reserves. Because tokens live on‑chain, anyone can verify the total supply and track movements. Stablecoins on BSV give users a bridge to the fiat world while retaining blockchain transparency.
The network’s data capacity creates auditability beyond monetary supply. Businesses can embed invoices, receipts, and legal agreements directly in transactions. The BSV blockchain’s secure and transparent nature allows peer‑to‑peer transactions without intermediaries and creates a shared ledger that reduces counterparty risk. Regulators, auditors, and consumers can verify transactions in real time. That level of visibility is impossible in opaque banking systems and is deliberately obfuscated in BTC for the sake of price manipulation on opaque exchanges.
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The call to action: build open credit
Fixing our economic imbalance is not just about payments; it’s about credit. Today, central banks set the cost of money, and commercial banks intermediate credit. The result is an opaque market that channels cheap money to institutions with political connections while rationing credit to everyone else. Imagine a peer‑to‑peer finance protocol on BSV where individuals and businesses create and trade debt instruments directly:
- Open lending markets. Borrowers post collateral and request loans; lenders bid on interest rates. Rates adjust to market demand, not to the whims of a central committee.
- Transparent collateral. Collateral is locked in on‑chain smart contracts. Lenders can verify its existence and value. No more hidden rehypothecation or off‑balance‑sheet leverage.
- Enforceable terms. Smart contracts automate repayment schedules and liquidation. Defaults are handled by protocol rules, not by court battles.
- No privileged gatekeepers. Anyone with collateral, be it tokens, stablecoins, or tokenized real‑world assets, can access liquidity. There is no discrimination based on connections or account minimums.
Builders should leverage BSV’s scalability and data capabilities to develop these credit markets. With auditable stablecoins and ultra‑low fees, BSV is the natural base layer for a fair finance stack. Entrepreneurs can design lending platforms, risk models, and new financial products that compete on service and price. Institutional investors can offer liquidity and earn yield transparently. Regulators can monitor markets in real time without stifling innovation.
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Moral clarity and practical invitation
The current financial system will not change itself. It is structured around deficit spending, opaque money creation, and privileged credit allocation. HODLing BTC may protect a few individuals from currency debasement, but it cannot provide a scalable, low‑fee, auditable monetary system for billions. Worse, BTC’s design locks out small holders whenever fees spike, turning their savings into dust and replicating the inequalities of fiat.
There is another path. BSV proves that the original Bitcoin protocol can scale without limits and maintain fees measured in fractions of a cent. Its design enables publicly auditable stablecoins and can host open credit markets where interest rates emerge from voluntary exchange. By building on BSV, we can create a monetary ecosystem that rewards productivity and honest risk‑taking rather than rent‑seeking and insider privilege.
For builders and business leaders, here are three concrete steps:
- Learn the protocol. Study the Bitcoin white paper and the BSV documentation. Understand how unbounded block sizes and script capabilities enable complex financial primitives.
- Build or integrate a stablecoin. If you run a business, explore issuing or using BSV‑based stablecoins with audited reserves to reduce payment friction and increase transparency. There are open docs from MNEE and the underlying protocol: 1Sat Ordinals.
- Develop or support P2P lending platforms. Whether as a developer, investor, or early adopter, contribute to the emergence of open credit markets on BSV. Use smart contracts to create transparent lending and borrowing products.
The rich will continue to get richer until we change the rules of money itself. HODL is a start, but it is not the cure. A scalable, low‑fee, auditable money system with open credit markets offers a real chance to fix the imbalance.
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Watch | Teranode & the Future of AI: Insights from Martin Coxall
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Source: https://coingeek.com/bitcoin-fixes-economic-imbalance/
