| Okay, I think we're getting somewhere. I agree that we the people decide the value of money. The people collectively choose what they want to use as money and they will naturally choose the best money for the job. I also can agree that just because the government says the dollar is worth something doesn't make it so. We originally chose gold because of its fundamental properties I mentioned earlier, and then we chose paper notes because they worked better than gold. However, this is where I think we see things differently.
Originally the paper notes represented gold and so had the same limited supply. So it had all the improvements in portability, divisibility etc but also had the (illusory) strength of gold's scarcity. It seems perfect. In digital form even better! But over time bankers began to print more notes than there were gold and the notes rapidly lost their limited supply.
For around the last century, the bankers have roughly doubled the number every decade. Make sure you've understood that - each decade since at least 1971, they've taken all the dollars in existence and printed the same quantity again out of thin air (as loans), and charged interest on every single one every year to date!
This dilutes the wealth in the dollar system across twice as many dollar units, resulting in it causing a halving of the wealth in each dollar unit, every 10 years (this leaking value goes into the freshly created dollars). It's the main factor behind price inflation. It's why houses seem to go up in value for ever. They're not, they are just being priced in units which are going down and down in value. Houses still cost roughly the same today in gold as they did in the 70s. This money printing causes enormous hidden problems to the world. The people who are close to the money printer get greatly discounted money, and the value of that money is sucked out of the dollars held by the people furthest away - your savings, your wages, your pension, granny's savings under the mattress, and all without you realising! It's called the Cantillon effect. The bankers get more and more powerful (they're collecting interest on every single dollar in existence even though they just printed them out of thin air!) and the population get weaker and weaker. What makes it worse is the people direct their anger at "greedy" businesses for the price increases rather than the banksters! You have to hand it to them - what a beautiful scam. Bitcoin solves the problem of having a few select people in control of creating the money tokens, which throughout history always results in them abusing their power and inflating the supply into hyperinflation. It's the initial form of the URV described in the article you mentioned! As expected the URV ("Brazilian Real") was inflated away over time once the central bank got its hands on control of the issuance as can be seen in this graph:
https://tradingeconomics.com/brazil/money-supply-m2 Because bitcoin's supply is hard limited - the decentralised nature ensures no one has the power to change the issuance curve, it's the initial form of the URV you mentioned, but the decentralised, proof-of-work paradigm means that it will stay like that _forever_. The more they print money, the more the price of bitcoin goes up. Its energy paradigm is no different to gold's - having to put in work to dig up gold is what makes gold the hardest money we ever had (today gold mining still uses more energy than the bitcoin network). It's the most natural thing in the world that money tokens we use as "proof of work" require equivalent work to create. Any system that breaks that rule will ultimately be corrupted and fail. History has shown this over and over again. |