Good Morning!

I have to share an epiphany that I had prompted by a discussion I was following on Twitter about the emergence of money being tied to energy versus money being decreed by an authority. The "money is decreed" side made the interesting point that gold wasn't really money until a governing body put a stamp of authenticity on it, and as cringe-worthy as that is, it does seem to have some validity. I started to imagine what I would do with a sizable nugget of gold that I found in my backyard if I was in a society that used cold coins as money.

The fact is, I would probably trade it for gold stamped coins, and take a haircut. I could potentially trade it for a cow, or some land, but if I wanted to buy a hat, I don't think I would be able to to chip off a chunk of gold and take it into the hat store- even if I had a scale with me. The hat store owner needs to enter the sale into their books, give you a receipt, etc. and that process is more efficient if they accept standardized tokens that communicate well with a community ledger. They would most likely tell you to head down the street to the gold dealer, and return with stamped coins.

Fiat takes this to the extreme, taking pieces of paper and just printing elaborate designs on them that are hard to fake to protect this stamp of authenticity.

The epiphany came when I realized that the most important distinction between Bitcoin and all other forms of money throughout time, is that money until now has always depended on a stamp of authenticity from a governing body in order to conform to a standardized ledger, and Bitcoin does not. Bitcoin is the ledger! Or thinking about it a different way, Bitcoin is the central authority, maintaining its sound monetary properties without incentive, or the ability to influence or be influenced.