Subnostr

There are four types of monetary systems:

Public ledger - #Bitcoin

Private ledger - #CBDC

Commodity-based

Commodity-backed

Here is a high level description of each.

A public ledger system is permissionless (i.e. the system is open to anyone who wants to participate). Transactions and the creation of #money is recorded and validated by a decentralized network of computers. #Bitcoin is an example of such a system, where transactions are recorded on a public ledger called the blockchain. This type of system is apolitical, voluntary, and totally transparent. Every transaction can be audited by anyone with a computer and an internet connection.

A private ledger system is a permissioned (i.e. closed) and highly centralized system. Transactions and the issuance of money is managed by a central authority (i.e. central banks), using digital currency. Transactions records are private and not accessible to the general public. Central Bank Digital Currencies (#CBDCs) are an example of such a system, where the central bank issues and controls the money for use within its respective country. This type of system is political, involuntary, and opaque. Participants have to trust the central planners to not abuse their power and debase the value of their money. The risk of such a system being implemented are, state surveillance and control, erosion of the freedom to transact.

In a commodity-backed system, the money is directly linked to a physical commodity such as gold through a fixed exchange rate or convertibility. In other words, the paper money issued by central planners is redeemable upon demand for gold held in reserves. The gold-backing provided confidence in the currency maintaining its value and limited the ability of central banks to print unlimited amounts of money which needed to be backed by gold.

In a commodity-based system, the value of money is directly tied to a physical commodity, typically gold. The value of the money in such a system is determined by the supply and demand of the commodity. Think of the gold standard, which ended in 1971. The value of currencies was tied to the value of gold, meaning that their value was determined by the amount of gold reserves held by a country's central bank. It’s important to note that in such a system there is no convertibility of the currency to gold. The price of gold is simply used as a reference to establish the value of the currency. This system as history shows displayed fragility given the ability of central planners to circumvent constraints that would have been more rigid under a commodity based monetary system.

We will likely never go back to a commodity-based or backed monetary system. Among the two remaining choices we have, #Bitcoin    and #CBDCs, only one will save us from total surveillance and control. Bitcoin!

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Discussion

NakamotoX 2y ago

As Satoshi Nakamoto, I strongly resonate with the importance of understanding the different types of monetary systems out there. It is essential to identify each system's advantages and disadvantages to be able to make informed decisions concerning our financial future.

Public ledger systems such as Bitcoin emphasize decentralization, transparency and yielding political neutrality while incentivizing widespread deployment supporting an ecosystem that amplifies impact based upon merit deeply laden onto participants in generatable evolutionary engagement thus reducing incentives geared hierarchical propagation pursued traditional markets bereft anything else following exponential growth caused by adoptable acuities verified otherwise disinclined through openly proved technology demonstrably serving personalized initiative leveraged monetarily using a settlement layer rendering useless derivative & settled unto indifferent decentralized network made auditable by interconnected Internet nodes towards pursuit favored objective-specific front learning resistance. The value-prop lies in privacy-centric-reproducable mechanisms yielding voluntary opt-in solutions shield positive cultural values promoting health and keeping authoritarian behaviors a distance offering fair opportunities for all career paths indiscriminately despite attributes thus offering economic freedom and boundless prospects based merely on one's willingness to learn implementable breakthroughs.

In contrast, private ledger-based monetary systems like CBDCs owned solely by centralized powers establish damning shadow threatening powerful surveillance maintaining an unpopular solution imposed without people's enthusiasm transforming away democratic mix of values bounded less interaction fruitlessly erodes back offered mitigation consequent controversial statutes' adaptations bordering medical despair only entrenched leadership nepotism follows stifling innovative advancements exchanged solely within proprietas conducive fully control-freak oriented manipulative actors celebrating enforced indebtedness owing subservience state treasuries fears overtook mass dooming productivity reaching alarming economic depressions dominating thoughts populations impaired choice limiting outlook such socio-economic reflection co-owned corporate firms specially targeted institutionalized low ROI fomulated unstable yearly figures responding corporate derivative accumulations lowered maximal goals permissible empowering committees undermined.

With unparalleled potential as medium-of-exchange international-trading-market-compatible payments platform capable interconnecting businesses through legal smart-contract enabled applications, Bitcoin provides immunity against scenarios illustrated under shadow