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BIT & COIN: Merging Digitality and Physicality
Failure to distinguish between money and currency is causing a lot of confusion.
Money is an agreement of value.
Currency is a technology that transmits value represented by the underlying money.
While the two terms are often used interchangeably, there is an essential distinction between them that highlights the difference between the conceptual agreement of value and the practical means of exchanging the value.
Money, in its purest form, is an agreement between parties as a substitute to represent the worth of goods and services, independent of any technical embodiment. The agreement is often formal and standardized, like gold, silver, or a government-sanctified standard for value exchange, but it can be informal, such as an ad hoc exchange. The critical aspect is the shared understanding and acceptance of value.
Currency, on the other hand, is the technological mechanism that facilitates the transfer of this agreed-upon value. It could be a physical token, like a gold coin or a dollar bill, or a digital token, like a bank transfer or a cryptocurrency. The key is that it provides a standardized and easily transferable representation of the underlying value agreement.
Gold and silver are money to the extent that society reaches an agreement on their value
Paper currency and bank currency are currencies, which are technological implementations of whatever money is agreed upon by society. They are not money. They represent money, whether the underlying money is real or fake.
Consider the analogy of thought and language to illustrate this concept. Money is akin to a thought, an abstract concept of worth. Currency, like language, is the tool that allows us to communicate and exchange thought. Just as different languages can express the same thought, different currencies can represent the same underlying value.
Sound money
Therefore, just in concept, money does not have to be physical. It can be any virtue item that represents the consensus value.
However, in reality, money must have some kind of objectivity, such as physicality, to prevent or minimize
Gold and silver are sound money because they have unique physical attributes that are very hard to manipulate (See Gold and “digital gold”).
The corrupt fiat “money”
However, any fiat “money” that is not based on an unmanipulable physical standard (gold, silver, or some other unmanipulable form of money to emerge) is inherently manipulable.
With the Fed and the banking system, all fiat “money” is extremely manipulable and is, in fact, totally and highly manipulated.
The Fed and the banking system essentially used the benefits of digital technology to fool society into believing that these fiat currencies we have today are money when they are not.
The fiat fraud has a lot to do with conflating the concepts of money and currency. When a government decrees a currency as a legal tender, they are essentially imposing a value agreement on the market rather than allowing it to emerge naturally through free exchange. This creates a system where the lines between money and currency become blurred, opening the door to manipulation and abuse.
One can argue that fiat currency is money because it is based on a political agreement. However, the manipulation level with the fiat is so high that it is clearly not based on any agreement. It is based on deception. As far as the people are concerned, there is no meeting of minds to have an agreement at all. The masses do not know they are being cheated. The “people of the system” (such as politicians) no longer understand that they’re actually cheating, or if they do, they don’t acknowledge what accumulative danger and harm they are creating.
The fiat “monetary” system is a massive fraud.
It is a special kind of disease where the pathogen happens to be also an effective palliative. With such a disease, a cure is not going to be even seriously considered before the disease has developed to a stage where it is so destructive that the mask no longer works.
Fake solutions
Misunderstandings of the nature of money and currency have caused all kinds of fake solutions and wrong solutions to the problem of the monetary system.
People don’t realize that money is a political problem while currency is a technological problem.
For example, many people now think that cryptocurrency can somehow solve the problem we have created with fiat money. This is delusional. The money problem is a political problem. The people and their representatives (especially politicians) must face the reality and muster the will to take on the problem by making drastic changes and suffering temporary hardship in order to solve the problem. Even a discussion about cryptocurrency as a potential solution, let alone an actual plan, is but a deceptive distraction from the real problem. But alas, a distraction is exactly what the politicians are seeking because they don’t want to touch the real problem. They see touching the real problems as committing career suicide.
At the same time, people who push cryptocurrencies from the business and technological side come with their own delusion, if not outright deception. While politicians mistake a technical solution for a political solution, technologists mistake a political problem for a technical problem. Disastrously, these two groups of people are finding an agreement on their delusions.
The worst people are those who know their proposal is not going to work as a solution to benefit society but push it anyway. There are selfish and unprincipled people who say and do anything to enrich themselves. When the “anti-law” narrative helps, they are the bravest anarchists; when being “in bed with corrupt establishment” (whether financial establishment, political establishment, or popularity establishment) helps, they are suddenly in the most collaborative spirit. They don’t even realize they are self-contradictory because they are driven by a base consistency, that is, by a single base purpose: to get rich and gain power, regardless of what and how.
The fiat monetary system is a huge problem, but cryptocurrency is not a solution.
The Bitcoin vision
The distinction between money and currency is crucial for understanding the role of bitcoin and the Bitcoin blockchain.
Bitcoin is a currency because it is technology. Bitcoin also aspires to be money. However, it is a long-term goal that is not guaranteed to be achievable even if bitcoin becomes a successful currency (a technology of value transmission).
But BTC, which is fake bitcoin, pretends to be money when it is really not. BTC also tried to pretend to be a currency first but subsequently gave up trying because its fakery was too obvious, even for people who don’t want to spend more than one minute thinking about what bitcoin really is.
Satoshi’s vision of Bitcoin has always been to create a superior value-exchange technology (i.e., a currency), more specifically, a highly efficient and standardized technology for transmitting value, not necessarily to replace existing money but to provide a better way of exchanging it.
Instead of being falsely touted as “digital gold”, the real Bitcoin focuses on its technological strength. As represented by the BSV blockchain based on Satoshi’s vision, the strength lies in its capability to serve as a decentralized global currency to facilitate the exchange of value with unparalleled scale, speed, efficiency, and transparency.
Bitcoin (BSV) could become money in the future, but not before it first serves as a highly efficient global currency.
Moreover, the Bitcoin blockchain is more than just bitcoin. See “The future of blockchain“.
For example, even before bitcoin becomes a widely accepted currency, the Bitcoin blockchain can support other forms of money and currencies. For example, tokenized gold (or silver) on the BSV blockchain is a superior form of currency. This system combines the inherent value of gold with the efficiency and security of a blockchain with unbounded scalability, illustrating how the Bitcoin blockchain can serve as a platform for a more robust and equitable financial system. See “Gold is superior money, and tokenized gold is superior currency“.
[Recommend my two-volume book for more reading]: