TheBitcoinBattery on Nostr: "Money" is a network of trust, including false trust, more than anything else. Sound ...

"Money" is a network of trust, including false trust, more than anything else.

Sound money is simply when the units of that network are difficult to make, like when dollars were made of Gold or Silver. The precious metal provided a strong check on supply expansion due to their natural scarcity and difficulty of production, but they were not money without the overlying network. Gold and Silver are just commodities that hold value longer than any other physical good, they are no longer money, because they no longer have a trusted network of which they are a part. Gold and Silver are still worth owning IMO, because they are free market trade units now. I can buy privately produced "rounds" and offer them for payment, I just have to make clear that they are not legal tender and not recognized by the banks.

FIAT is "money", or "currency" some might say since there's no foundation of value anymore, not because it's good money but because you can take it to the local diner you've never been to before and exchange it for a sandwich and fries without saying another word to the employees. You cannot do that with bits of Gold and Silver without first discussing what value and money actually is with the person you hope to exchange.

Bitcoin is money without substance, without physicality, it is money in its purest form. At the end of the day money is trust, and Bitcoin created a network of trust with no trust in any individuals or isolated groups required. Trust that the supply won't be debased (to pay for violence and dishonesty), trust that new units are hard to create, trust that you can save for the future, trust that your money is actually yours, trust that you can use it when you need it and it's value will largely trend up over long enough time periods.

End of Part 1.