Money is a tool that solves the coincidence of wants, and a mode of communicating value.
3 Functions of Money:
- Store of Value
- Unit of Account
- Medium of Exchange
First Principles of Money:
- Durability
- Portability
- Fungibility
- Verifiability
- Divisibility
- Limited Supply
- Acceptability
What is wrong with our money today?
- Fiat Currency (Since 1971) – Issued by decree; Funds forever wars
- Centralization of Gold and rehypothecated “paper certificates”
- Fractional Reserve Banking – 0% Reserve requirement
- Counterparty Risk – Bank Failures
- The Cantillon Effect – Those closest to the money printer benefit
3 Functions of Fiat Money:
- Store of Politics – savings debased and inflated away
- Unit of Infinity – unlimited supply, no way to audit how many total dollars in circulation
- Medium of Extortion – Censorship of certain transactions; total surveillance
Bitcoin Freedom vs. CBDC Slavery
Bitcoin First Principles: All changes and upgrades to the protocol should strive to maintain and reinforce these Principles of Bitcoin.
- 21 million coins.
- No censorship: Nobody should be able to prevent valid txs from being confirmed.
- Open-Source: Bitcoin source code should always be open for anyone to read, modify, copy, share.
- Permissionless: No arbitrary gatekeepers should ever prevent anybody from being part of the network (user, node, miner, etc).
- Pseudonymous: No ID should be required to own, use Bitcoin.
- Fungible: All coins are equal and should be equally spendable.
- Irreversible Transactions: Confirmed blocks should be set in stone. Blockchain History should be immutable.
Recommended Reading from the Austrian School
Ludwig Von Mises:
– The Theory of Money and Credit
– Human Action
Murray Rothbard:
– What Has Government Done to Our Money?
– Man, Economy, and State with Power and Market
Jorg Guido Hulsmann:
– The Ethics of Money Production
– Deflation and Liberty
Saifedean Ammous:
– The Bitcoin Standard
– The Fiat Standard
