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Commerce

Under a Bitcoin Standard, commerce is the exchange of Bitcoin for goods and services, from payments over secondary layers (such as the Lightning network), to final international settlement on the base layer. And like saving in Bitcoin, commerce starts simple and grows more and more powerful.

Not only can one be a sovereign of their own savings, they can be a true financial sovereign -- a sovereign of their own business -- impossible with fiat, but made possible with Bitcoin, simply by opting-in to sound money: getting paid in Bitcoin, buying goods and services in Bitcoin, and empowering local businesses through liquidity (such as lightning channels). In other words, empowering sovereign commerce through Bitcoin.

Below are proposed sovereignty levels, guiding us from hobbyists to full financial sovereigns.

Bitcoin versus Fiat

Fiat-based commerce does not and cannot allow for sovereign commerce. If your payment rails require trusted third parties, then those third parties will hold absolute power over whether you can or cannot transact. Fiat inevitably produces the Biblical mark of the beast, without which one cannot buy nor sell.

Sovereign commerce necessitates truly peer-to-peer transactions that cannot be censored or controlled by any authority. As such, we are still very early. Technical and economic development remains in order to make Bitcoin-commerce globally scalable. For now, sovereign commerce will look simultaneously antiquated (reminiscent of a gold standard) while also forward-looking (inevitable innovations that make sovereign commerce possible at global scale).

In short, we're not there yet, but like with Bitcoin itself, it is inevitable.

future inevitable

For Bitcoin commerce to scale globally, several architectural layers become necessary:

  • layer-2+ liquidity channels, such as the lightning network (which solves transaction scaling)

  • layer-2+ non-custodial wallets (which must solve pseudonymous user scaling) -- this must:

    • allow unlimited creation of cryptographic wallets (such as hierarchical deterministic wallets) which can effectively collect and lock funds from existing liquidity channels, however,

    • closing channels must not impede any locked funds in use on the network. In other words, funds must be spendable independently of the liquidity source. E.g., if a channel paid 100 sats to X, and the channel is later closed, then X must be able to spend those 100 sats on other channels.

    • funds must be collectable into an on-chain transaction should the owner decide to do so, e.g., to create their own liquidity channel to send and receive from -- effectively making them financial sovereigns.

Sovereignty Levels

Imagine a local community of workers. They could be unbanked. They could be farmers, fishermen -- any small and relatively self sufficient community. Imagine they have some Bitcoin and occasionally they trade outside. Now imagine they experience fiat hyperinflation. There are countless real-world examples of exactly such communities, and many in our future. How could they establish sovereign commerce?

Before diving in and learning about sovereign commerce, you may want to first understand the terms.