_Good Morning_ ☕ 📖 🌞

`Debt Loop Fallacy`

- **Debt Loop Fallacy**: Theory suggesting modern state currency isn't actual money but a money substitute, a claim for borrowed money, leading to a conceptual loop.

- **Fiat as Money Substitute**: Claims are for a definite amount, but this leads to circular reasoning as the value is defined by what the state will accept in trade.

- **Nature of Money**: Money represents what it can be traded for, not an intrinsic value. Fiat differs from commodity money only by presumed lack of use value, which is subjective.

- **Invalid Theory**: A claim cannot be for itself; holding the claim satisfies the claim, making it money, not a debt. Thus, the theory is invalid.

- **Transition to Fiat**: Occurs when representative money loses redeemability, as with the U.S. Dollar in 1934.

- **Money Substitutes and Debt Regression**:

- **No Regression**: Direct money (e.g., Gold, Bitcoin, modern U.S. Dollar).

- **Single Regression**: Representative money (e.g., redeemable U.S. Dollar).

- **Finite Regression**: Indirect claims with a finite chain of settlements.

- **Infinite Regression**: Theoretically impossible; a claim must end.

- **Conclusion**: The "debt loop" is essentially a description of money itself, not a fallacy, as money substitutes eventually become money when claims settle or are circular.

**Cryptoeconomics by [Erik Voskuil](https://github.com/evoskuil).**

*The book can be found on [GitHub](https://github.com/libbitcoin/libbitcoin-system/wiki/Cryptoeconomics).*

The rest of the summarized chapters are at https://expatriotic.me