Money, Bitcoin and Time: Part 1 of 3

In the ancient story of money a new chapter is being written…
The Simple Truth about Money: Money is the most successful story ever told by humans. It is a reflexive narrative: meaning it has value only because everyone believes it, and everyone believes it because it has value. Money is a story that continues to be written…

Human Exchange [2,6]

Human exchange is the incipient force driving all human progress and prosperity. Prosperity is simply time saved, which is proportional to the division of labor. This recursive dynamic persists to this day as a virtuous cycle with no known natural limit — modern markets in goods, services and ideas allow human beings to exchange and specialize honestly for the betterment of all.

Story of Money [1]

Hard Money [1]

Money is a Social Network [1,4]

Network values are based on the number of possible connections they allow. Such values grow exponentially with the addition of each new constituent — a property commonly known as network effects.

Monetary Traits [1,4]

Prospects of Prosperity [1]

As people exhibit lower time preferences and spend their time wisely, they increase their capacity for investment and create more free time for themselves.

Foundation of Economic Growth [1,4]

“Historically speaking, gold seems to have served, firstly, as a commodity valuable for ornamental purposes; secondly, as stored wealth; thirdly, as a medium of exchange; and, lastly, as a measure of value.”

The Economic Nervous System [1]

Monetary Evolution [1]

The earliest coins are found mainly in the parts of modern Turkey that formed the ancient kingdom of Lydia. They are made from a naturally occurring mixture of gold and silver called electrum.

Monetary Metals [1]

Isaac Newton is attributed with adding the small stripes along the edges of coins as a security measure against coin clipping. These stripes are still present on most coins today.

“Although the emperors of Rome frantically tried to ‘manage’ their economies, they only succeeded in making matters worse. Price and wage controls and legal tender laws were passed, but it was like trying to hold back the tides. Rioting, corruption, lawlessness and a mindless mania for speculation and gambling engulfed the empire like a plague.”

Global Gold Standard [1,4]

The US Dollar was once redeemable for gold on demand.

Hardness of Gold [1,3]

The rarity of gold in the Earth’s crust ensures that its new supply flows are relatively low and predictable. Since gold is virtually indestructible, nearly every ounce that has ever been mined throughout history is still part of current supply stocks. The combination of these factors gives gold the highest stock-to-flow ratio of any monetary metal and is precisely the reason gold became a global hard money standard.

Final Settlement [1]

Centralization of Gold [1,4]

“La Belle Époque was a period characterized by optimism, regional peace, economic prosperity, an apex of colonial empires, and technological, scientific, and cultural innovations. In the climate of the period, the arts flourished. Many masterpieces of literature, music, theater, and visual art gained recognition.”

In fractional reserve banking artificial money and credit is created. For instance, assuming a reserve ratio of 10% and an initial deposit of $100 will soon turn into $190. By lending a 90% fraction of the newly created $90, there will soon be $271 in the economy. Then $343.90. The money supply is recursively increasing, since banks are literally lending money they don’t have. In this way, banks magically transform $100 into over $1,000.

Abolishing the Gold Standard [1]

Governments Take Control [1,3]

Today, the US Dollar is not redeemable for anything and its value is derived solely from government decree. Paradoxically, people were coerced into adopting soft government fiat money only because of their shared belief in gold as a hard monetary good.

“I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”

The ability to print unlimited quantities of money gives governments a means to finance military operations by implicitly taxing their citizens via inflation. This provides a more secretive method of funding warfare then explicit taxation or selling government wartime bonds. Resultantly, wars have grown in duration and violence.

Free Market Capitalism versus Socialism [1]

In a free market for money, the interest rate (the price of money) is determined by natural supply and demand dynamics. Central banks attempt to “manage” these market forces and in doing so create recessions and the boom-and-bust business cycle which is now considered “normal” in the modern era.

Failure of Government Fiat Money [1,3,4]

Money supply growth by global central banks is accelerated after each recession. This artificial liquidity only provides illusory relief and further distorts the market signals which caused the distortions in the first place.

CONTINUE READING →

Bitcoin accepted here: 3CiBznmvP2jXVSPR9bUWZwSNtbe9ubp36M

Synthesized Works & Further Reading

Freedom Maximalist. Bitcoin is Honest Money — stack sats here: http://bit.ly/2THg4Jg Links To All My Work: http://bit.ly/3fG91KV YouTube: http://bit.ly/321Lzm0

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store