Neal Stephenson doesn't seem keen on crypto anymore

Yeah. I work in crypto custody and I use Wise to send money in France.

> which started off strong and then seemed to just ... evaporate?

Welcome to every neal stephenson book. You get used to it.

Meanwhile, Terry Pratchett explains why fiat currency works just fine in Making Money.

Right? The whole history of capitalism can be written in terms of "well that's fucked up, how can we patch that hole?"

I used to work for traders on the Chicago Mercantile Exchange, a privately held marketplace for commodities and derivatives. It was an extremely capitalist place, and over the years it had evolved extremely tight internal regulations. You just did not fuck with the exchange or with your clearing firm. If you did, could end up a grease spot on the pavement.

All the extreme capitalists I worked with were fine with that. They wanted to keep on making lots of money, and strong regulation created something where people felt safe engaging. That meant high-volume, high-velocity money flows. They were all greedy, but long-term greedy.

I feel bad for the sweet summer children who were like, "We'll invent a money with no regulation and it will be utopia!"

As I understand money creation, at least the part created by commercial banks as described in "Bank of England: Money creation in the modern economy" -- https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/m..., that debt-based money is backed by something of value: The promise of the debtor to create something valuable which itself earns money, and more than was used to create it.

.

Here is a tiny story I once heard or read. I know it's only a very simplified, used to show debt based money creation, but such partial stories is all that's possible for this arbitrarily complex story of "money", because it's mostly a mind game of artificial rules. (If anyone can find this story I'd appreciate it, I don't remember where I read it, some book?)

A boy writes on a paper that he gives to his parents the promise to mow the lawn whenever that paper is presented to him to fulfill the promise. He got something in return from them right away, apparently the lawn didn't need trimming at that time so they resorted to the "debt paper". Instead of using it themselves the parents gave it to some neighbors in exchange for something they needed from them. And the neighbors too gave it to yet other neighbors. The promise to mow the lawn had become "money". As soon as somebody actually uses it to get their lawn mown it is destroyed, the "money" is gone.

So, all our debt based money, at least as far as it was created through companies or firms taking it on, is backe by various promises for money-cresting projects, for example

For a business it could be something like "I/we promise to build a factory that builds xyz and markets and sell it to _somewhere_."

For an individual consumer something like "I promise to work hard for ten years to create more value, i.e. make more money than the amount just created for me in advance of my promise."

So all that debt based money we keep using everywhere is not "merely paper without any value", it's backed by people's and businesses signed and certified promises to perform work and/or create measurable value.

Yes actual money is way more complicated, yet I find this story quite revealing. In all sciences we regularly use very simple "stories" too (e.g. the first model of the atom everybody learns, or the second, and third too, all way too simple from the PoV of the physicist, or molecular bonds taught in chemistry, getting more complicated with each iteration of level of education).

As far as I can see having the promise of a human to do something (valuable) is way more useful than anything else when averaging over all contexts. I'm sure one can easily think of specific contexts where something else is more valuable, but pointing it back at humans seems to me to be the most genius way of putting "value" behind the currency. That we have created soooo much more other stuff on top of the idea, for special situations and for special interests, IMO does not detract from it.

Also, that the banks can create money but need to find people willing to sign also looks like some really genius balanced design to me - as an idea, how it is then implemented in practice of course always suffers from the pulls of all the interests from all directions.

We also have a system that puts significant pressure on the debtors to fulfill their promises.