You don't understand money – and it's a good thing for Bitcoin • Hacker News Board

Money is simple. Credit is complicated. And if Bitcoin is going to succeed lending Bitcoin will be normal and lead to similar behavior as in the gold standard.

Re: You don't understand money – and it's a good thing for Bitcoin

#7

Post by recursivecaveat » Fri, Nov 15, 2019, 5:37 AM UTC

> Don't you care to know where your food, your electronics or your clothes are coming from, who made them and how?

This is a pretty strange choice of examples, considering how little most people know about the manufacturing of any of those things. Besides, if bitcoin were to ever reach the masses, we'd start banking in it (because banks and useful and necessary), so M0-M3 doesn't go away. As soon as someone is holding fractional reserves, "how many bitcoins exist" is as relevant as "how many paper dollar bills exist".

Re: You don't understand money – and it's a good thing for Bitcoin

#8

Post by Tomte » Fri, Nov 15, 2019, 5:40 AM UTC

> Take the questions we mentioned above, and apply them to Bitcoin:

Sure, you can easily answer cherry-picked questions about Bitcoin.

But the important thing is: nobody in his day-to-day life needs to know these answers about real money, nor have they ever wondered about it.

I can buy groceries just fine with my Euros, without wondering how exactly it has been created. Just as I wouldn't tailor my own paragliding chute, because otherwise companies could rip me off. I just trust in sensible regulations, paraglider-making experts and, finally, the social fabric of society.

Re: You don't understand money – and it's a good thing for Bitcoin

#9

Post by kd5bjo » Fri, Nov 15, 2019, 5:42 AM UTC

All of the author’s core questions can be answered just as well for coins and notes as they can for bitcoin— Every greenback has a unique serial number, after all. There must be a central registry of them somewhere.

Money as understood by economists is not physical currency (coins, notes, etc), but an emergent property of the institutional use of IOUs of various kinds, like debts and fractional reserves. These also exist in the bitcoin world, and have already caused problems— How long did MtGox operate without reserves? Does Bitfinex actually have the reserves it claims to? If Bitcoin were immune from the problems of fiat currency, these questions wouldn’t even make sense to ask.

Re: You don't understand money – and it's a good thing for Bitcoin

#10

Post by DavidPiper » Fri, Nov 15, 2019, 5:47 AM UTC

chamawa wrote: post #2

Anyone have book or article recommendations on how money works?

I haven't read it but I've been recommended Debt: The First 5,000 Years by David Graeber numerous times.