That was used to be .. good old days 😀
money's primary purpose in modern society is to
1) keep the price of bread basket stable
2) Provide enough credit to enable risk taking
3) deploy resources quickly for disaster mitigation!
2 and 3 contribute to "Maximum Employment"
All 3 of the items in your list are logically circular and you don’t even realize it. “Stable” against what? Risk as measured how? How much resources and how do we know where they are needed?
Not only are you wrong, your points remain entirely dependent on my above point being correct.
I think your definition of money is pre 1971 era .. In modern times , money is currency ..
Gold is an asset - IT IS NOT MONEY. .
The idea of unpegging money from an underlying asset was the genius of Nixon administration that led to major boom in the western society .. It means , you need money only to transact assets .. you don't need money to hold VALUE . Value is held in assets .. Everyone is free to acquire assets as long as they want to pay the capital gains ..
Bitcoin is a superior asset because it has lowest acquisition threshold ( one Sat) and practically zero transaction fees .. All other assets have high bar to enter . .. In that , it is an APEX asset for the poor !
Since money is detached from VALUE , you can print as much as you want aka QE or burn as much as you need (QT) .. the goal is to satisfy the three things that I described ..
As far a stable is concerned - it apparent meaning is the loaf you buy today should be around the same price tomorrow .. but it has a larger role - for example if money is volatile - no one can plan retirement , businesses can't enter into long term contracts ..
As regards to resource deployment - it means you should be mobilize people to help LA fires , earthquakes and other natural disasters .. if govs don't have the ability to print money , no one will fund these causes .. it is a entire,ly different matter that govs choose to fund wars too - in the same fashion .. but that is a fault of govs .. not the money :-)
bottom line - money doesn't need to hold value ..
Bottom line, money that doesn’t hold value means the society that attempts to use it cannot plan for the future. It will eat itself into poverty, gut its manufacturing, eat the seed needed for the next harvest, all chasing the allure of “more activity” at the loss of any real foundation.
To the contrary, money must, above all else, hold value, or the society that uses it will have no future.
Source: Fiat and the largest debt bubble in the history of mankind.
Well .. you don't need to take my word or any other source -- just look at the dollar bill .. it is a piece of paper .. does it has any value ? Even less if it created through a stroke of button .. I mean the computer generated dollars don't even have a serial number :-). .. money has no value .. neither it is designed to have ..
Now - me and you can debate that Dollar is NOT money - but it doesn't change the fact that DOLLAR is the MONEY and it has no inherent value .. it is not even an IOU.
And if you are telling me people in Gold standard ( before 1900 or 1971 whichever date suits) were better off .. than today .. then we have a major point of difference .. World has never been this good .. most my money converted to assets (#bitcoin) and chatter all day long on #nostr .. what else can I ask for :-)
The moment we understand that the purpose of money is that of a lubricant - to facilitate exchange of assets - the impulse to hold value in money vanishes .. rather hold value in assets .. the best asset is simply the one without KYC , with least acquisition cost and lowest minimum needed to acquire .. #bitcoin ...
Ok so when do you call something Money and when do you call it an Asset ?
Many languages don't have proper words to differentiate betweeh Money and Currency..
I'm dyslectisch so by default have the preference to describe key attributes/functions instead of using the designed words..
I noticed in the little understood disciplines like Money/Economics this helps enormously for most to grasp it way better.
The network is the asset . For example #gold wouldn't have any value , if there were no gold traders in every city .. Gold miners , buyers , refiners - all put together create value in #gold . That is what an asset is .. it is the network .
Same with real estate .. land planners , developers , equipment makers, builders , realtors , and buyers .. an entire universe of industry is what creates value of a home or an office space ..
On same lines - #Bitcoin network is the asset.. #sat is the token in this network ..just like a Troy Oz is a token in gold network ..
Bitcoin is the apex asset because the flow of value with in the network is most efficient , production difficulty is same for every participant and so is the acquisition price no matter where you are in the world ..
Money is what is controlled / defined by monetary policy of a nation state or a group of nations .. the purpose of money is to allow exchange of assets .. in that .. each unit is deemed as a carrier of value from one asset to another .. but unit doesn't have any value of its own ... Monetary policy also have additional goals - for example stability of bread basket prices , maximization of employment.. money can be printed as much as required to meet these goals or destroyed as needed .. goes without saying money can be efficient or inefficient.. just like there are bad assets and good assets ..
Before Nixon , money was unnecessarily pegged to gold .. which meant market couldn't have liquidity when needed .. Nixon administration separated the two .. thus unleashing more progress in last fifty years than the entire time of mankind on this planet .. bit exaggeration to make a point :-)
If you are a student of physics then I have a much simpler anology .. asset is the massful stars (or planets) - money is the light ( electromagnetic waves) that carry energy (photons) from one massful star to to say a planet .. light has no mass by itself .. but it still carries tiny packets of energy ..
sorry mixed up photons and electrons for a second, still doesn't make it easier for me 🤣
I know .. electromagnetic waves are hard to grasp .. you can put more energy in a gamma ray than a bullet yet it has no mass .. it is just high frequency photon ! So is an X ray that passes right through the body :-)
Going with anology .. Gamma rays are like 1000 dollar bill , X rays are like 100 and normal visible light like some and pennies :-) .. 😁
Thanks for your elaborate awnser.
Don't see my followup as critics I like to better understand and yes have a clear opinion 🫣.
I see the network as one factor creating value.
Take as sample the hard cap of 21m, if that wasn't in place there would be 'no' value (and indeed also no network).
The same for Gold scarcity but also the fact gold is not suffering from corrosion over time.
All factors combined make good or bad money and #bitcoin can be argued being the best.
So how do you conclude the network is the asset and not the whole set, that what is #Bitcoin, being the asset ?
I can see many things being an asset but only a few assets as being money.
That money is what is controlled / defined by monetary policy of a nation state, is a verry narrow view I think.
Many samples available to counter that argument like cigarettes in prison functioning as money ?
But indeed most money used does go by your definition and #Bitcoin is clearly breaking that, it works without, El Salvador excepted, government declaring it money !
Your view on Gold unnecessary pegged to the Dollar is also interesting.
The decoupling shows it was not a hard precondition, but that decoupling also made it possible to build up insane amounts of debt, that caused pulling in wealth from the future and affected they way we think and act world wide, and causing inflation, but a conclusion about any progress can only be made after the whole debt fiasco is being resolved.
Could well be that unwinding has extreme consequences.
Pitty that typing is way more time consuming and cumbersome than a conversation.
Money - from definition stand point - is what is controlled by monetary policy .. we can all make up our definitions:-) ..but that is what it really is ..
Ciggerates working as money in prison situation is a great example of bad money .. just the way gold was bad money prior to 1971 .. because if the unit of money has an inherent value , than it starts acting like assets .. which then rattles the entire system .. you sure don't want to run global economy on cigrettes :-) just joking
An asset, by definition, is something that attracts capital gains tax .. real estate , stocks , bitcoin .. each asset class may attract different tax slabs at different locations or different times .. that depends on national priorities ..
No one calls and asset MONEY ... I don't go around telling people that my home is money .. Money is currency - dollar bills ..
As regards to your point on bitcoin numbers cap - 21 million - all such features are the features of network .. other being no KYC .. digital signature.. proof of work . These features make this network as the supreme unbreakable digital network ..
For example 21 million number is emergent rule over existence of the network .. no one can implement such rules without the underlying network of nodes ..
Nice stuff, thanks.
I have a limited view on money.
I my mind Gold is money and now Bitcoin.
Gold has a natural monetary policy (scarcity and the energy needed to find/retrieve it) Bitcoins monetary policy is hard coded but the coinbase reducing slowly to zero every halving.
Fiat is debt and since not attached to something it is more imaginairing debt.., the monetary policy is changing all the time. So all in all the garbage all Bitcoiners recognize.
I have to think about the asset aspect, I still have a hard time to make a clear distinction if I should call #Bitcoin money or asset or why you have a hard time to say #Bitcoin can be both in a hybrid way ?
A part of me doesn't care how we name it, but in interaction with others it is nice to align on definitions to prevent unneeded friction.
I gonna need some more time chewing on this.
That is a very real dilemma .. and it is not new - we all have been struggling with this right from the day gold network was established.. around five thousands year back in India .
In India , selling gold is considered bad omen ! We don't sell Gold unless it is a family crisis . Gold is passed from one generation to next. No one ever thinks of using gold to buy coffee :-)
The monetary policy with in bitcoin - e.g. bitcoin toknomoics ( fixed at 2100 Trillion #Sats ) - is to allow external people acquire a tiny part of bitcoin network .. not to use it as a means to exchange for goods and services ..
For goods and services , we have currency ( fiat or money) .. and as you rightly said , fiat is considered garbage .. you want to get rid of fiat as soon as possible and turn it into hard assets .. cumulating money is considered a sin ..I mean literally :-) aka Greed ..
Never sell your bitcoin :-) and if that is true - it is NOT money ! It is an imperishable asset ..
Thanks, that thinking I can follow and makes sense.
I think you described the hardest money and the fact it is pushed out by lesser forms of money since those will be spend first.
This all aligns with what I concluded myself and as being 'a bit strange' makes me feel comfortable 😌
Just a pitty we can't have a coffee and some hours to discuss, I knew/hoped this was going to be interesting !
May be it is a cultural difference, but when people use the word "money" for #bitcoin , it feels to me they intend to use it for perty transactions .. unlike gold .. even though Satoshi said it is a p2p cash system , but turns out it is gold in digital form .. like Columbus set out the sails in search of India and landed in America :-)
You think that the dollar has no value? Rather than recognizing that it’s the best money out of all available fiat?
Am I misunderstanding that statement or are you literally saying that dollars have any value?
It is simply a piece of paper .. the purpose is to allow people exchange assets .. and collect taxes .. unit of account and unit of exchange .. it is enforced through law and monetary policy .. the
Now, that has an important role to play in modern society - monetary policy evolves .. for example we have a mandate of two percent inflation today .. it may change to four percent tomorrow .. but that doesn't matter because people are supposed to hold a super tiny percentage in money .. they are expected to convert it to assets as soon as possible ..
The bigger problem is legacy assets are hard to acquire .. I need half a million dollars to buy a desirable property .. and acquisition cost is around six percent .. so most people are priced out .. add to that the burden of KYC .. bitcoin is the APEX asset because anyone anywhere can acquire #sat s for practically zero acquisition cost with no KYC .. but that doesn't make sats money .. it is still super liquid , super slivered asset .. never sell your #sats .. instead zap them to me :-)
The way society implements this simple idea is to embed it in culture :
Boarding money is considered Greed ( cuz it has no value )
Hodling gold ( and now #bitcoin) is considered a virtue .. an auspicious thing ..
Value is created by the underlying network of asset .. it is tokenized to allow people acquire a tiny piece of asset(s) network .
Money is designed to carry value from one asset to another .. it has no inherent value of its own except that me and you both agree that a coffee is worth 2 bucks today ..and pumpkin latte is five .. really :-)
And to your point as to why Dollar is better money .. it is because US has the best law and order .. despite what DOGE is revealing :-) ..it still is the best monetary system ever established by humans .. and partly because of independence of Fed but mostly because of its widest acceptance ..
In essence , as if this morning , dollar is best money , bitcoin is the best asset ! Bitcoin to store value , money to transact ..
I didn’t say gold was still money. It stopped being that in the early 1900s as the environment in which money was needed, became one where gold could provide none of its assurances or characteristics. (A token for gold on a computer screen is no less reliant on trust than any point on any spreadsheet on a random google server)
