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Money’s primary purpose has always been to be able to hold the value of the entire society, and not break.

Literally every other thing we associate with money, or feature we wish it would provide, is either meaningless or doesn’t work at all, unless it can achieve the above.

In fact, the variable ability to accomplish the first goal, is exactly what ultimately limits the size of the economic network.

It’s why cowhide only ever work in small, disparate networks. It’s why glass beads failed after the European and African continents were connected. It’s why gold is the only thing that ever became a globally spanning monetary base, because a gold bar lost 500 years ago is the EXACT SAME gold bar today.

Exchanging value doesn’t matter if it isn’t expected to carry it. Payment speeds mean nothing if the cost to undo the payment is trivial. Privacy is of no purpose if there is no trustworthy value to protect.

Before anything else, money is a tool to protect value at a scale that no other good can match. And it’s very possible that Bitcoin is the single greatest system for scaling that capacity. Because the bigger it gets, the BETTER it is at protecting the value stored in it. Rather than diminishing with size, it actually compounds.

Leo Wandersleb 10mo ago

> Money’s primary purpose has always been to be able to hold the value of the entire society, and not break.

Value is much more than money. In a society where all are self-sufficient, there is no need for money, yet there is value. Or in other words, money only enters the equation when you want to do trade. Absent trade, "the value of the entire society" exists all the same.

A better metaphor for money and an overall exceptional presentation was delivered by Wences Casares ten years ago. His core thesis is that money is an objective ledger of what people owe to each other or what society owes to the holder of that money.

https://www.youtube.com/watch?v=gKkfhi8Eaiw

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Discussion

Guy Swann 10mo ago

It’s a combination of the 2. It’s the value OF the trade network. I never said it *replaced* the value, to the contrary, I said it must be able to hold the value relative to the amount of economic network it can sustain. If it can only hold small value, it can only build a small trade network. If it can hold massive value, it could sustain a massive trade network.

In other words, it holds the value of everything available FOR trade today or expected to be in the future.

But it is inaccurate to say that all the value of society and its goods remains even without the money, because the overwhelming majority of the things we value is because it is part of a massive trade network.

Example: A car isn’t worth anything without money, because there is a globally spanning mining, shipping and refining infrastructure to get gas to a massive, complex network of gas tanks and delivery stations that are within driving distance of everyone else in the network. Without money, that coordination and delivery network is deader than King Tut. And your car is worth about 200 miles before being little more than a heavy tent. Most of our goods are only valuable because they are part of a trading economy. Without that trading economy and the distance it spans, many of our goods are worthless. (Think a smartphone without internet or electricity)