rektskamoff on Nostr: My concise summary of "Broken Money" by Lyn Alden: Money can be viewed either as a ...
My concise summary of "Broken Money" by Lyn Alden:
Money can be viewed either as a commodity or a ledger, and it helps resolve the "coincidence of wants" dilemma. When money is a commodity, it serves as a medium of exchange, while a ledger allows us to store liabilities.
Three crucial questions arise:
Who has control over the ledger?
Who can create money at minimal cost, potentially devaluing the savings and wages of others?
Who can monitor and censor transactions, or freeze funds?
Money's scarcity is essential because it enforces consistent rules for all participants, akin to nature controlling the ledger.
"Weak money" triumphed because gold was challenging to transport, but the advent of the telegraph equalized settlement speeds with the speed of light.
The current financial system benefits the wealthy and disadvantages others. Winning the race against inflation often requires access to low-cost credit.
In the absence of a solid base layer of scarcity, governments tend to resort to printing money as the easiest solution, perpetuating a system based on liabilities.
Proof-of-Stake (POS) systems lack decentralization due to government involvement and the challenging node requirements for ordinary users.
POS systems operate on a circular logic where ledger status is decided by token owners based on their holdings, and the ledger comprises users and their balances.
While Proof-of-Work (POW) provides a way to validate the correct chain through the most significant amount of work, POS systems lack such a mechanism (except government intervention).
Bitcoin makes use of otherwise wasted energy. It's akin to a glass of water poured over a 3D topographic map, filling the lower-cost energy spots.
Governments tend to exert control through Central Bank Digital Currencies (CBDCs), enabling them to freeze or restrict funds until specific dates.
Cash presents challenges for governments in implementing negative interest rates, but CBDCs offer an easier solution.
Feel free to share your own insights; I'm eager to hear the best ones!
Money can be viewed either as a commodity or a ledger, and it helps resolve the "coincidence of wants" dilemma. When money is a commodity, it serves as a medium of exchange, while a ledger allows us to store liabilities.
Three crucial questions arise:
Who has control over the ledger?
Who can create money at minimal cost, potentially devaluing the savings and wages of others?
Who can monitor and censor transactions, or freeze funds?
Money's scarcity is essential because it enforces consistent rules for all participants, akin to nature controlling the ledger.
"Weak money" triumphed because gold was challenging to transport, but the advent of the telegraph equalized settlement speeds with the speed of light.
The current financial system benefits the wealthy and disadvantages others. Winning the race against inflation often requires access to low-cost credit.
In the absence of a solid base layer of scarcity, governments tend to resort to printing money as the easiest solution, perpetuating a system based on liabilities.
Proof-of-Stake (POS) systems lack decentralization due to government involvement and the challenging node requirements for ordinary users.
POS systems operate on a circular logic where ledger status is decided by token owners based on their holdings, and the ledger comprises users and their balances.
While Proof-of-Work (POW) provides a way to validate the correct chain through the most significant amount of work, POS systems lack such a mechanism (except government intervention).
Bitcoin makes use of otherwise wasted energy. It's akin to a glass of water poured over a 3D topographic map, filling the lower-cost energy spots.
Governments tend to exert control through Central Bank Digital Currencies (CBDCs), enabling them to freeze or restrict funds until specific dates.
Cash presents challenges for governments in implementing negative interest rates, but CBDCs offer an easier solution.
Feel free to share your own insights; I'm eager to hear the best ones!