From Barter To Bitcoin – The Theory Of Credit And Money

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This post will discuss localized barter, the evolution to money, the evolution through banking and central banking, to the evolution of distributed technology and crypto “currencies” that I will argue are not currencies at all but takes us back full circle to barter, although a mind numbingly sophisticated and globally scaleable method of barter, one that will change all our lives in the next few years… From Barter to Bitcoin, and back to Barter

Exchange

I will never tire of saying this but individuals are, and always will be, part of a bigger whole… From the day you are born to the day you die, you will be exchanging… Life is and always will be about exchange, whether you exchange with family, friends, community, or the voluntary exchange of ideas, goods, services and property… While you still have people you will have exchange… A part of this life will be voluntary exchange of goods, services and labour…

Barter

When exchanging goods and services in a world without money, it will be done by Direct Exchange, that is by Barter… In my second post on The Origin Of Money I explained that the inherent limitations of Direct Exchange will lead to Indirect Exchange, by the way of a Medium of Exchange, which would naturally evolve into common mediums of exchange, to money… Having given it much further thought I wish to clarify and expand on some of that writing… I think that barter can work pretty well in fact, on a local level… My interest in this subject was triggered long ago by an exchange between the respected Anthropologist David Graeber and the Mises Institute on the origins of money, with the Mises Institute holding the Mengerian view and Graeber arguing that credit systems and ledgers had preceded moneyWhereas before I would have agreed totally with the Mises Institute, having thought further about it I now agree with Graeber and I also believe that Graeber will soon be proved right, in what we see emerge out of the epic collapse of the global centralized debt based system of Fiat

Real Life In A Collapse Scenario

Imagine the Fiat system collapsed overnight… You go to bed one night with banks, and you wake up the next morning with nature… You have lost all of your savings and medium of exchange, and so has everyone elseThis is the important point, you are part of something bigger and your plight is everyone else’s plight… So what do you all do? You keep producing (as far as possible) and develop a system of credit… You produce your goods (or more likely service) and give them away on credit for now, in exchange for something back when they get what you want… This is a very basic and crude method of exchange, but in the absence of currency or money it would have to do to survive… A pretty developed system of debits and credits could be built by localized barter by use of credit and debit ledgers… Ledgers are methods of counting and accounting that go back thousands of years and are some of the oldest recorded artifacts, like those in Sumeria (4000+ years ago)Banks are also ledgers, as is Bitcoin a ledgerLedgers and not money make the world go round… And credit and debit ledgers could definitely work on a local level, but only on a local levelRemember this is ultimately a Credit system, this is something you do on trust… Who do you trust in this life? Only the people you know, the people in your very near proximity… Think of a village or small communities within towns or cities… You live with these people all your life and you also exchange with them, so you know who to trust and who not to trustWhere you have trust, you can have exchange

So to hopefully clear this fascinating subject up, because credit and debit ledgers work on trust and familiarity in exchange they can only scale locally and are very crude and basic and couldn’t support an advanced Division of LabourI would also call this credit system mental barter, as there is no medium of exchangeWe are still engaged in barter here albeit done by ledgers instead of direct exchange, so the Mengerian Origin of Money remains in tact, and here’s whyIt is when you go out of your immediate locality, when you start exchanging with people who you don’t know and because you don’t know them you can’t trust them, that trust and faith in credit vanishes… You still want to exchange with these people because they may offer you production that you wish to consume or they may wish to consume what you produce, but to be clear you cannot trust them and they cannot trust you… And so, you need an intermediate, you need something tangible to replace trust and faith, something that you both recognize as a medium for exchange, you need money… The Origin of Money is for taking the pain and hassle out of voluntary exchange, and freeing both exchange parties of trust issues… It’s credit with who you know, money with who you don’t

Intrinsic Characteristics Of Money

While many common mediums of exchange will be used in local communities and over regions (cows, shells, nails, feathers, salt, mobile phone minutes), these can only be local monies due to regional scarcity of these commodities, whereas the ultimate goal of money is a global standard for tangible trustless exchange… For a money to be chosen universally for exchange it would need some very unique properties, for example it would need to be relatively evenly distributed over the earth so that it would be recognizable and trusted by exchanging cultures… It would need to be a tangible commodity that was durable, that would maintain generations, centuries, millennia, eternity… It would need to be portable which would also make it an exceedingly scarce commodity, and it would also need to be divisible and fungible so that its consistency and value remain unaltered by division into weights and measures… And then you look to history for your answerGold is moneySilver is money… These two durable, portable, divisible and intrinsically scarce metals are the money of the last several thousand years… The deposits of these metals in the earth are mined into our existence and added to the money supply at a determined and predictable rate (about two per cent per annum inflation) with the increasing scarcity and increased difficulty of mining these metals offsetting the mechanization and increasing efficiency of gold mining and exploration… It is as if gold and silver were designed by someone for the sole purpose of taking the credit out of exchangeI think the more you study and come to understand money and what an amazing human invention money is, the more you come to understand that gold (and silver) is money… As J.P Morgan is purported to have said (and never truer words were spoken by an evil bankster), “Gold is money, everything else is credit“…

The Definition Of Money

My definition of money would be in three parts, a medium of exchange, a store of value, and an unit of account… With gold and silver being the near universal media of exchange they become the standard for every buyer and seller and therefore necessarily half the wealth of world trade and exchange… With the increase in goods and production exchanged in gold and silver generally being higher than the increase in the supply of these metals in circulation, money is inherently deflationary and leads to increased standards of material living to those who produce and exchange in it, which also makes it a store of value par excellence… The Essence Of Money is its scarcity…

Money As Mental Calculation Tool

Money as an unit of account I would like to explore further, because this is what I consider the biggest implication of money… You are no longer involved in barter or crude credit systems, you now have an universal medium of exchange… This medium of exchange basically connects all commodities, goods, services and property exchange, because they are all now all exchanged in one or two moneyNow you have a common denominator for random and unconnected value and production, and so now you have exchange ratios, prices, catallactics, and the birth of price discovery… You have a centralized price discovery system from a decentralized issued money, and the best of both worlds… Money as a mental calculation tool is vastly superior to any credit system based off of barter, and so allows an increased division of labour to satisfy more of the markets needs and wants, both the material and the spiritualMoney is the birth of civilization, of culture, of art, of architecture, of literature, of science, of everything that exchange and deflation and rising standards of living and comfort can afford to invest in

Money And Banking

Money as a deflationary mental calculating tool over time will become such an efficient price discovery mechanism and therefore so scarce, that gold and silver will increase in value to such an extent that there will be a need for a specific industry to service it… In order to co-ordinate storage and lending out of money for a further advancing division of labour and production for exchange, you will need specific institutions, in short The Origin Of Banking

Banking should be understood as a derivative layer on top of money… With gold and silver being scarce and valuable commodities, you would store them in centralized specialist institutions for protecting your money, and in return they give you a paper claim for that money… Today’s pure Fiat currencies (Dollars, Pounds, Francs, Yen, Yuan, Peso, etc) are all derived from weights and measures of gold or silver, and paper currencies issued by banks and later central banks were a paper derivative layer… These paper tickets have no intrinsic scarcity or value or history as money, they are a title or a claim or a credit on the underlying precious metals in order to scale creditYou should understand Banking historically as an organic credit layer that was built to improve upon money proper… For example, the Knights Templar became some of the richest men in the West because of their banking exploits in helping knights, travelers, and pilgrims travel to, and hopefully back in one piece from, the Holy Land… On dangerous pilgrim routes they would be subject to raids, stick ups, and the harassment of bandits and highwaymen, so the Templars devised an ingenuous solution to effectively encrypt valuable money in a credit and chit system… Say you started your journey in France, you could then deposit gold and silver in a Templar bank in exchange for a derivative or credit which you took instead of the precious metals on your journey… As the Templars had numerous banks along this pilgrim trail, you could then spend the credit you had along the trail on your journey… At no part of your long journey to Jerusalem from the depths of Europe did you have any physical precious metals on you, but you could spend its wealth through the highly ingenious credit derivative system the Templars invented… The Templars took the hassle and risk out of money which is why they became so rich, and targets of inquisitions, kings and popes…

Banking As Credit Ledgers

Banking doesn’t really develop and flourish until the late Medieval Period and the Medici Family invention through the Bank of Medici, of Double-Entry BookkeepingThis again is a ledger system, but instead of it being a barter credit system, is is a derivative credit system layered on top of money… These systems are invented on top of money, not of barter, as banking credit can only derive its value from moneyDouble-entry bookkeeping allows two entries to be made for every ledger, one which lists debits (deposits) and one which lists credits (withdrawals), and so it can co-ordinate incomings and outgoings… As basic as this system might sound to us with today’s technology this was one of the main technological inventions of the last five hundred years and modern banking really owes its continuing (but not for much longer) existence to it…

Banking As Centralized Credit Controllers

The market solution in making money safer to use and more efficient in exchange is the banking system, by having counter-parties and middle men build the necessary financial instruments on top of a decentralized issued money supply of precious metalsWhile this type of system has its merits, it also has its rather obvious flaws… Unlike a centralized barter credit system that consists of people you know, banking is a centralized credit system consisting of people who generally don’t know each other, and so can only scale as a derivative of REAL money… Because you don’t know the banker personally you must trust him and trust that he doesn’t rip you off by his controls over ledgers… As long as there is Full Reserve Banking, then banks are productive institutions that take a lot of hassle and risk out of exchanging valuable money, while also lending money out of REAL reserves… Alas, history tells us that these centralized credit systems don’t stay honest for long…

Fractional Reserve Banking

If you look at monetary history you will find many manias, when people and speculators went “mad”… For interesting examples, the Tulip Bubble (1637), the South Sea Bubble (1710-1720) or the Mississipi Bubble (1716-1720), are all early examples of fractional reserve banking and the speculative manias that printing money create… As I have extensively discussed in past posts fractional reserve banking creates the business cycle as a speculative boom that leads to bust, and mark back to market (gold)… The credit system of banking by fraudulently printing additional credit out of thin air and enriching the bankers, creates an unsustainable debt that at some point in the future will have to be liquidated (Bust stage)… By their centralized control over the debit and credit ledgers, bankers can create additional credit by a simple entry in the book-keeping ledger and creating the necessary paper notes to release into the market in exchange for REAL goods and services… This works well until the increasing inflation and a wave of “unexpected” bankruptcies and credit tightening events shatter faith and trust in credit and triggers a physical bank run, when people shun currency and credit and seek the safety of money (gold and silver)… Here you should see Banking as a derivative layer that works on trust, and that once that trust is lost that bank is effectively bankruptGold as a decentralized issued and eternal money, keeps plain vanilla free market banking in check by being the market to mark back to when trust in credit and banking evaporatesFractional Reserve Banking is a CONfidence scheme

From Banking To Central Banking – The Monkey Becomes The Organ Grinder

Now that we understand banking as a derivative and credit layer on top of money (gold and silver), then we can understand what Central Banking is… When a State legislates into existence a Central Bank, the issue of credit becomes centralized… Whereas free market banking sits on top of a decentralized money supply, banks under Central Banking sit on top of a centralized base money supply, now controlled by the Central Bank… Under Central Banking, the money supply becomes credit although fully backed (for now) by gold (or silver)… Through Fiat decree and the Laws of Legal Tender, the legal money is now central bank credit…

Once base money is controlled by a Central Bank, then the debasement can begin… Even though you may redeem your paper money for gold or silver upon request, gold is effectively drowned out in a paper market, and subject to overnight devaluations, currency “shocks” and general debasement… Even though the monetary base is still supposed to be gold backed, the history of the Twentieth Century tells you that the booms and busts of the last century makes this a bare faced lie… Because the money supply is now centrally controlled it can be inflated and pumped and dumped at will, and it is onto this manipulated and politicized money supply that the private banking system continue their fractional reserve banking, which takes the Business Cycle and its devastating booms and busts nationalFrom local and regional carnage and devastation of free market fractional reserve banking, a Central Bank takes this carnage and devestation national and international

From Money To Credit

In a world full of banking and paper instruments and propaganda, gold will eventually be lost in the noise… The purpose of a Central Bank is to essentially strip mine the wealth of the goods and services that exchange in that Nationalized bank currency and redistribute it to an Elite banking clique and entourage that have worked so hard into fooling the Nation into their own enslavement, and so gold as money is a problem for the Elite bankers… Because Central Bank base money is tied to gold they can’t print as much base money and transfer more wealth of the goods and services of the Nation FORCED to exchange in that currencyGold is a link to scarcity and the last defence of the purchasing power of money that will eventually have to be cut for the Centrally Planned society our insane Elite overlords require to control, enslave and exploit usGold is the shackle on totalitarianism

Removing Gold – The Debt Based System

The Bankers now rule the world… National Credit is no longer connected to money and so the derivative becomes the money, the monkey becomes the organ grinder… Gold is no longer money they say, but a barbarous relic and pet rock stacked by paranoid and deluded gold bugs worshiping at the alter of past scarcity… When they sever the link to gold and the market, the bankers also think they have abolished the link to scarcity… They can now print themselves rich by debasing the goods and services of the citizens forced to exchange in that currency (credit), and so they do creating spiraling inequality and the debasement of society as the rich get richer and poor get poorer… And this is the point I think blind believers of the power of the State and its Bankers and who think this goes on forever and ends up with us all in gulags need to get, is that you cannot abolish nature and scarcity and so this cannot go on indefinitely… It’s as simple as this, you cannot print people and you cannot print exchange… Pure Fiat currency abolishes the link to money so reverting to a credit system based on barter (goods and services), but even then is still dependent on scarcitySo even the bankers cannot permanently abolish the link to scarcity… Unconstrained credit has its own unintended consequences such as exacerbating this scarcity of barter and people by destroying demographics, by debasing credit and society so far that it has made having children so expensive that people are having less or increasingly no children… This is fewer future tax and debt serfs and is a disaster for bankers who require increasing not decreasing scarcity to extract their wealth and parasitic existence fromWhen the scarcity of the production of the population cannot shoulder the colossal house of cards of credit and debt on top of it, is when that debt based ponzi collapses… We are witnessing the death of this wealth extracting and impoverishing bubble machine that has enslaved us in wars and welfare this century, and it cannot happen soon enough… The centralized ledger and credit system that abolished gold and made its unconstrained credit system king, is about to devastate Countries as the archaic Nationalized infrastructure of Communist Central Planning finally breaks down… The collapse of this credit system will lead to the adoption of new monetary and credit systems, of which Bitcoin and its Blockchain will be a major player…

What Is Bitcoin?

So is Bitcoin money, or is it currency, or is it just a Fiat style ponzi dressed up in this blockchain “fad”? It’s an interesting question in itself… To the cheers of the hard money gold bugs I’m sure, I won’t call Bitcoin money, because it isn’t and really can’t be… Money in my opinion has to be tangible, to remove that trust element from barter and credit, and with Bitcoin there is no physical medium of exchange… Bitcoin like banking uses ledgers, but unlike banking is not a derivative layer upon money but a totally independent and stand alone digital ledger… So Bitcoin isn’t money and it’s not a derivative of money either, which has to take you back to barter, before money

Bitcoin Is Credit For Barter

The description that Bitcoin fits best in my opinion is back with the localized credit systems based on barter that I started this post with… Like the localized barter and credit system has a ledger, so Bitcoin has a ledger… Like a barter system Bitcoin has no medium of exchange, only an internal currency or credit (bitcoins) to account for it… I would certainly say that the barter ledgers and the Bitcoin ledger have a lot of similarities, but there are also big differences and very profound ones at that… In a localized barter system of credit based on ledgers, those ledgers would have to be centrally held by a trusted party or third party (or both parties like the stock and foil of tally sticks for example), very much like banking… With Bitcoin that ledger is decentralized and exists as a computer protocol that anyone with electricity and internet can connect to, so there are no counter-parties or middlemen to trustWhen you barter using Bitcoin, you are bartering peer 2 peer, smartphone 2 smartphone, with your credit account on the Bitcoin network being debited or credited depending on whether you are buying or sellingLike money takes trust and faith out of exchanging with people you don’t know, Bitcoin takes the trust and faith out of exchanging with people who you don’t know and makes it automatic and instant by means of a decentralized digital asset ledger

Gold Is Money, Bitcoin Is Credit

If you take anything away from this post, I hope it’s that even though gold is money and money is eternal, there will be various attempted improvements and credit systems other than money used… Even though all other systems are credit systems that rely on faith and trust they will still be invented to make money more efficient or to do some things better than money, or even to do things that money cannot do at all… So I don’t see the hard money gold bug future of physical exchange of precious metals, seeing as we have had a banking derivative layer for the last five hundred years and that we live in a digital world… With the death of banking and the freeing of money from banking and politics, new credit systems (like Bitcoin) will work to compliment and improve upon money where necessary… Bitcoin or banking will never make money obsolete, but work along side it

Why Bitcoin Is The Greatest Credit System Ever Invented

Bitcoin goes back to the beginning and back before money, to barterHowever unlike any other asset ledger in history the Bitcoin ledger is decentralized… There are no middlemen that can control and corrupt the working of this ledger… Like local credit ledgers (and totally unlike banking) Bitcoin is an open source protocol with no secretive institutions and so you can track and trace every transaction, but utilizing a decentralized internet your transactions become untraceableThe maintenance of this ledger is carried out by a decentralized pool of computing power that in the course of this mines into existence the bitcoin credits that account for the ledgerThe checking of transactions and issuance of credit is controlled by the same mining power ending the need for centralized ledgers and therefore has to be one of the greatest inventions in human historyThe Bitcoin ledger allows anyone to connect to it by a simple application download to a smart phone or laptop, that connects you to everyone else on earthBitcoin takes the trust out of barter and therefore this credit system becomes infinitely scaleable and globalWe now have in Bitcoin an exchange standard and credit system that eliminates trust in exchangeThe same globally scaleable ledger that makes all this possible runs virtually for free, so you have no fees or taxes to payBitcoin makes exchange essentially freeBut the most important aspect of this decentralized credit system is that its credits (bitcoins) are artificially scarce and issued at a predictable rate (25 bitcoins every ten minutes currently, dropping to 12.5 bitcoins every ten minutes in July this year)This means that the wealth creation created by voluntary exchange is funneled into scarce credits that over time will increase the purchasing power of those creditsBitcoin as a decentralized credit system has been designed to mimic gold as decentralized money but on the digital plane, and why Bitcoin is the digital gold standard on steroidsBecause Bitcoin mimics gold you will have deflationary money and credit, and the profound societal implications as a result

Conclusion

Exchange is an essential part of all our lives and will start out as direct exchange or barter, with or without ledgers and credit systems to facilitate it… I agree with David Graeber that credit systems were prevalent and must have preceded money, but that these credit systems should be understood as mental barter and a more efficient method of direct exchange… Barter and credit derivatives can work well in a local economy where you would be willing to work on trust for people you know, but these systems could only scale as far as your immediate locality and those familiar to you… For everybody else outside that you don’t know and therefore can’t trust, you need a medium of exchange to overcome this trust deficit and this is what we call moneyThis money will universally be gold and silver, and these two metals should be understood as money proper… Banking should then be understood as a credit derivative layer on top of money to make exchange more efficient and productive… From productive full reserve banking will derive fraudulent and unproductive fractional reserve banking and all its destruction… Banking will then morph to Central Banking as the ultimate expression of a full credit and debt based system after having removed gold as base money… Fiat money should be understood as an aberration when credit is completely disconnected from money however temporarily, because even having abolished the scarcity of money, Fiat money cannot abolish the scarcity of goods and services that it derives its sole value from then on, and therefore collapses when this scarcity can prop up the unconstrained debt no further… Bitcoin should be understood as a decentralized asset ledger and credit system that is not a monetary derivative but a barter derivative, with no medium of exchange but scarce credit allowing use as a mental calculation tool between exchanging peers…

I think it should be the utmost importance for economists to understand, as J.P Morgan understood, the difference between money and credit… Money is a physical medium of exchange, store of value and unit of account, that is decentralized and ultimately and eternally outside of centralized control… Gold and silver as money are eternal constructs embedded deep in the human psyche and sub-conscious and the bedrock to which we return following credit crunches and crises, whereas credit systems are temporary phenomena that can last centuries before being superseded by superior methods… Banking is a derivative of money and Central Banking is a derivative of barter (after severing the link to gold as base money) and both are systems based on faith and trust… Bitcoin is also a trust and faith based systems but not based on the promises of central bankers and centralized institutions but on transparency, ease of use, low barrier entry, and most importantly a cryptographically and mathematically scarce credit system on an infinitely scaleable decentralized open sourced ledgerBitcoin is simply a marvel of modern distributed technology

From Barter to Bitcoin, we come back full circle… Bitcoin as an independent exchange standard is an important development for gold, silver, money… Where a centralized credit system like Central Banking will seek to centralize and manipulate the price discovery of money (and destroy society in the process), Bitcoin as a decentralized credit system does not care about money, but works independently to free money from centrally planned enslavement… Bitcoin derives its value from barter (goods and services) not from money, which necessarily frees that moneyAnd this is what I would like to emphasize to gold bugs, is that money can co-exist with creditMoney as a hard asset and store of value is unparalleled and eternal, however credit can improve upon money as both a medium of exchange and an unit of accountBitcoin has infinitely more utility in terms of a medium of exchange and as an unit of account than money, and so Bitcoin could and should be thought of as a short term instrument for trade settlement on credit, with surplus profit being converted into hard moneyGold as decentralized money was an ingenuous solution to the inherent problems of trust in barter and credit, now Bitcoin as a decentralized credit system is a significant improvement on money in the world we live in today… Understand and use both as compliments… It’s happening anyway…

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14 thoughts on “From Barter To Bitcoin – The Theory Of Credit And Money

  1. Nice article. I would love to debate with you about this in person.

    But I disagree with you on the fact that money should be tangible so that you can trust it.
    Technology brought us so far that methods of falsifying gold coins became easy and cheap enough to practice for almost everybody who seriously wanted to.
    Once gold and silver were a real medium of exchange, we would definitely see this happening.
    It’s not practical to check every coin for authenticity so I don’t see silver and gold coming back to be exchangeable money ever again.

    The central banks already have a big problem with counterfeit notes and coins.
    If a simple copper/brass/nickle coin is profitable to counterfeit, then a gold or silver coin definitely is.
    This, for me, is proof that we will *never* see it coming back as a medium of exchange in daily usage.

    However, one of the biggest advantages of bitcoin is that it is practically impossible to counterfeit. Yes I know, once buried under enough blocks (of trust)
    Especially the fact that it’s *not* tangible makes it a very good money because you don’t need the Templar system to keep it safe.

    Bitcoin is ultimately about literally having a key to prove you are trustworthy. This key can be transferred to someone else, *even in physical form*!
    Bitcoin keys can be made up from information only *you* know, or want to share with someone else you trust.

    1. I agree with you on much, and have thought a lot about what I’ve written since, and it needs further refining…

      However Bitcoin is only six years old, and digital not physical… Put this six year old electronic credit system against 6000 years old tradition of physical money, IMO splits gold and silver as money, and bitcoin as credit… Bitcoin may well be more difficult to counterfeit, but if the electricity grid collapsed around the world tomorrow, Bitcoin would be dead, and you would have to go back to physical media of exchange… Bitcoin I’m pretty sure will not be around in 6000 years, whereas gold and silver will be…

      But while Bitcoin survives is is a vastly superior “medium of exchange”, unit of account, and perhaps a store of value…

      I also think gold and silver will be so scarce and valuable per ounce, that it will not be used in mainstream exchange… That day to day exchange will be done by credit, i.e Bitcoin… It’s a balance of using both IMO…

      Thanks for the feedback… ; )

  2. I agree that gold has a 6000 year reputation of being trustworthy.
    But this could vanish overnight when it became clear all those vaults contain counterfeit gold.
    The reputation would disappear forever when we see this happening with coins on the street.

    True when you say electricity grid collapses you have a problem in transacting bitcoin.
    However, they would still be there when the power came back.
    A global grid collapse is unlikely and difficult to prepare for.
    In that case lead, guns and food are much better money imho.

    I see no reason why bitcoin would be gone in 6000 years.
    Sure, sha256 would have been replaced by another algorithm.
    Sure, we’d probably have different infrastructure to do transactions.
    But I do think some digital cryptographic electronic value is being transmitted from one to another because it is much more efficient. It might even still be named bitcoin.
    Theoretically, the private keys you use today could still be used in an upgraded version of bitcoin because it is all about encrypting some information someone else doesn’t have.

    Satoshi once said:
    Sigh… why delete a wallet instead of moving it aside and keeping the old copy just in case? You should never delete a wallet.

    https://bitcointalk.org/index.php?topic=1327.msg15136#msg15136

    1. Gold like Bitcoin is ultimately outside of government control… The issue of debasement IMO is a separate issue, and why we have mints and stamps on coins, e.g krugerrands, gold eagles, kookaburras, etc… Gold in vaults is centrally held, gold coins on your person is decentralized… Gold is decentralized money, Bitcoin is decentralized credit…

      But I agree Bitcoin is far more efficient in exchange and probably a better counterfeit proof currency than gold, and definitely better than banking…

  3. When the common man is able to counterfeit coins, the value is lost.
    It is all about trust, even with gold. You can buy shitloads of beautiful gold plated coins everywhere for close to nothing, so you cannot trust your eyes anymore.
    Of course, It could be that gold has some alien universal spiritual value we are not aware of in our consciousness.
    But as long as I’m not aware of this spiritual fact I cannot give gold some magical value power (some call it intrinsic value) which -in the mean time- is easily undermined by forgery.

    Value comes from trust in the fact that reputation is authentic and real imo.

    I have to trust the coin shop they sold me real coins.
    I have never had this feeling with the bitcoin in my wallet.

  4. I just had my 49th birthday so guess doing some thinking and turned off the tv and enjoyed your guys post. I don’t have a twitter or facebook. Just email and cell. I figure if someone wants to reach me they can.
    Anyways, I really enjoyed your thoughts. I have a BBA from University of Miami and J. D. form University of Georgia and realize it’s ok to read again. I guess I got burned out.
    I’m intrigued by this Bitcoin idea that has survived ( still afraid the gov’t might intrude ) and have been doing some thinking of my own….

    Thanks for your posts.

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