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Fiat is Broken

Value is relational. Something is only valuable in the context of something else. For instance, coffee isn’t valuable; it’s valuable to you. In this sense, value is very dynamic. If you change the object of value or the subject of value, the value itself will change. 

Value makes the world go round, so it might benefit us to study the dynamics of value as best we can. Luckily for us 21st-century folk, academics and ‘think-bois’ of the past have developed an actual equation for modelling value. Due to its innate intuitiveness, it’s an equation that almost every person on earth (older than 13) has likely heard of: supply and demand.

Bananas

Supply and demand is pretty easy to grasp: monkey have 1 banana; monkey want more bananas. Monkey have 100 bananas; monkey don’t want more bananas. Monkey don’t like apples; monkey don’t want apples.

Diamonds

Humans, however, know that even if they don’t like something, other people may be willing to pay good money for it. One man’s trash is another man’s treasure. So, naturally, we want pretty much everything we can get our hands on, even if it’s just to sell it. This is one of the great benefits of money: the efficiencies it provides in the domain of trade allow otherwise unwanted items to become immensely desirable store holds of wealth and symbols of value. Think “Rolex watch”, for example. Combine this with the proliferation of the internet and the e-commerce opportunities that came along with it. Now, you can sell almost anything… to almost anyone… almost anywhere… almost anytime.

But this has some other effects too. Namely, now that almost everything is desirable by the knowledge of its sellability, what was once an equation of supply and demand in equal parts, is increasingly an equation of just supply.

Free Market

Money is the primary store hold of value. Thus, the monetary price—the currency-denominated number found on the price tag of your favourite yoga pants—is the unit of account by which we—a collection of barely functioning space monkeys—manage to standardise the measurement and quantification of value. 

But who, among us space monkeys, is the authority on determining the price of a given good/service? The market. What exactly is ‘the market’, you ask? It’s the largest example of distributed cognition on the planet… probably. When you compared the price of eggs at your local supermarket, you were partaking in this distributed cognition machine we call the free market. 

The free market is endeavouring to answer one question: How cheap can can we make stuff, without making stuff… cheap? And we all vote with our money every time we buy a good, such as yoga pants, or a service, such as your job.

Your job is a service you sell to your employer—measured in time—and your salary is its price—measured in money. 

The same free-market distributed cognition mechanism determines the salary you receive; if someone is willing to do your job for cheaper, without doing it shittier, they will get the job instead of you. 

But, there is a problem. 

Time—by which your services are measured—is finite.

Money—by which your reimbursement is measured—is not. 

The time you sell is finite, but the thing being used in the pricing mechanism is not. Thus, due to supply and demand, the value you’re contributing to society is no longer determined by the largest distributed cognition system in the world… it’s determined by a couple of old men, sitting at a round table with mustard on their shirts, discussing fiscal policy. 

See, whenever a nation’s ‘big daddy’ decides to increase the supply of the money in which your wage is paid, they aren’t simply increasing the price of coffee; they’re reaching back through time to steal the hours of labour that you entrusted to this degenerative charade we call “Modern Monetary Theory”.

Short-term short term thinking

Better still, it’s the status quo of democracies worldwide to have short office terms for elected officials. So it only makes sense for each official in power to capitalise on their capacity to increase the supply of their national currency so that the economy seems “booming” during their term. Only to leave the mess to whomever sorry sucker takes their place in office next—and I’m sure you can imagine what these sorry suckers do when the mess inevitably gets handed to them.

But hold your horses; this isn’t a critique of democracy.

This is a critique of merging money and state. 

The only way out of this mess is to separate them again. 

But never guess what, if Bitcoin doesn’t succeed, we will never have another chance at separating money and state. 

Central-Bank-Digital-Currencies will consume whatever quiver of freedom remains of our monetary system. Governments will assume ultimate control over every aspect of everyone’s lives, and thereby the entire planet. And they will f*ck it all up. 

Why?

Because a few people sat behind closed doors will never be as intelligent as the total distributed cognition of the entire human species.That’s why you need to help Bitcoin help you, and we at FastBitcoins are here to help that process by providing the tools you need to save in Bitcoin. Learn more at our blog, or follow us on twitter to stay up to date with the latest Bitcoin news.

Written by Angelo

Content Creator at FastBitcoins. I left traditional education at 12, so all I know is Bitcoin. Aiming to spread Bitcoin understanding by questioning the axioms of our monetary zeitgeist.

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