I read this book a few weeks ago, and it fundamentally changed a lot of misconceptions i had about Money (i.e. blew my mind!)
Let’s go through a few of them below:
What is money
Money is a strange concept when you really think about it, it is essentially an IOU (“I Owe You”) that is acceptable by somebody other than the person who issues it. That simple.
It has no value other than the value of the goods and services it represents.
It exists because we believe it does, because we choose to collectively believe in it.
If humanities faith or trust in money erodes, it no longer exists.
This creates a host of complicated problems (and solutions!) that i will get into in another post, for fear of putting folks to sleep.
Read on…
The form of money has changed over time
Money as we know it today, is a fairly modern concept. Whether in the form of paper notes, or electronic bits and bytes stored in a bank account.
One thing in common across humanity, is that it is very difficult to change our conception of money, which takes decades and even centuries to develop: (This is commonly known as a Status Quo bias)
When currency was in the form of gold or silver coins, we couldn’t imagine that it would be replaced by paper money.
When currency was in the form of paper money, we couldn’t imagine it would one day be digital money, held in bank ledgers in bits and bytes.
When the world was on the gold standard, it was unimaginable that a currency would not be backed by gold (or any asset for that matter)
Now, today most of the world’s money is in a centralised ledger, we cannot imagine a world where currency will be on a decentralised blockchain.
Cryptocurrency, Bitcoin and the Decentralisation of Money
This is where things get really interesting..
Now that we have established that Money is essentially an IOU, is there any reason for the Governments or Central Banks to be involved?
The beauty of a decentralised currency on a blockchain is that it open sources the discovery of the value of currency, validating and then recording transactions, to all participants on a ledger, and “rewards” each participant on successfully completing these tasks.
Now of course, we all know that one thing Governments love the most is giving up control to the public (NOT!)
Which is why we see several moves to regulate, adopt and try to make sense of this brave new world, where Monetary Policy is seemingly under threat:
One this is certain, we are in the early Wild West days of Cryptocurrency and Decentralised Finance, the onus is on us, to mould and define the future of Money and how we use it.
That’s it for now. If you found this useful or entertaining, consider subscribing to my Medium Channel or follow me on twitter
