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After 10+ years and 30,000+ hours of studying the history of money, monetary failures, hard money systems, Austrian economics, and Bitcoin, a few conclusions become unavoidable. Money is not created by decree. It emerges as a coordination tool. Societies converge on the hardest available money because it best preserves time, labour, and energy. Throughout history, money has followed a pattern: • Collectible goods become media of exchange. • The most durable, scarce, and verifiable forms outcompete the rest. • States later monopolise issuance. • Debasement follows. • Trust erodes. • The system resets. This cycle has repeated for thousands of years. Gold was not chosen because it was shiny. It was chosen because it was hard to produce, difficult to counterfeit, and costly to debase. Those properties constrained rulers and protected savers. The abandonment of hard money did not happen because it “failed.” It happened because it limited political spending. Fiat currency is not money in the historical sense. It is a credit instrument backed by future taxation and enforced by law. Its supply must expand to service the debt it creates. This is not a flaw. It is the design. Credit creation changes behaviour. New money enters the economy through specific channels: • Governments • Banks • Asset markets Those closest to issuance benefit first. Those furthest away pay through rising prices and declining purchasing power. Productivity gains no longer flow primarily to savers or workers. They are absorbed by asset inflation. This is why wages lag prices. This is why savings no longer work. This is why speculation outcompetes production. Austrian economics does not oppose growth. It explains growth. Real growth comes from: • Capital accumulation • Productivity improvements • Time preference discipline Hard money forces growth to appear as falling prices and rising purchasing power, not monetary expansion. Under sound money, progress benefits everyone. Under fiat money, progress is unevenly distributed. Bitcoin is not an innovation in finance. It is an innovation in monetary integrity. Bitcoin did not invent scarcity. It enforced it digitally, without trust. Bitcoin is: • Fixed in supply • Permissionless • Verifiable by anyone • Independent of political systems It does not promise yield. It does not promise returns. It does not guarantee adoption. It simply removes monetary discretion. Bitcoin does not succeed because its fiat price rises. Its fiat price rises because fiat units lose purchasing power and more fiat flows into a fixed system. Price is not value. Value is preserved purchasing power over time. Bitcoin exposes this distinction. Most confusion comes from mixing frameworks: • Treating Bitcoin as an investment instead of money • Measuring success in fiat terms • Expecting monetary neutrality from a debt-based system Paper Bitcoin, custodial claims, ETFs, and derivatives reintroduce the very trust Bitcoin was designed to remove. They may increase liquidity and price discovery, but they weaken monetary sovereignty. Self-custody matters. Running a node matters. Using Bitcoin matters. Money that is not used eventually becomes controlled. The long arc is clear: • Fiat systems require perpetual expansion. • Expansion erodes trust. • Trust loss drives capital toward harder money. This is not ideological. It is structural. Bitcoin is not a revolution. It is a reversion. A return to money that cannot be altered, censored, or debased. Whether it succeeds depends not on price, institutions, or narratives, but on whether people choose to use it as money. Hard constraints produce honest systems. Honest systems produce long-term progress. That is the conclusion. #Bitcoin #AustrianEconomics #HistoryOfMoney #Money

Replies (5)

One tiny tweak I have realized: the state did not monopolize issuance, or that was just an outcome. Money lending created the state (as we know it). The state and it's wars and control systems are an operational outcome of lending at interest. Fiat is just the most sophisticated form of usury. It is lending at interest itself which is the driver of he whole thing. Interest is the "something created from nothing" (a lie). It requires to enforcement, collections require elaborate changable rules, politics, violence, seizure, slavery and war. Thus usury creates the state (as we know it) and determines its character and behavior. With sound money, there is no need for interest and thus no need for the state (as we know it). Of course we need to cooperate at scale, but that is not what the state (as we know it) does. We would still need some civil order and contract enforcement, but very little compared to now. So I am not advocating anarchism, or any ism. Isms are just mind control. Who knows what we would naturally do, because we have never lived in it. Probably little kingdoms where the leader was highly accountable, because that is what we had when usury was forbidden, but that is hard to know. I just know I want to live in a world with at least a smaller scale of evil.
↩ replying to Zsubmariner
That’s a fair clarification, and I largely agree with the framing. It’s important to separate cause from outcome. States did not wake up one day and decide to “print money.” They emerged to enforce debt contracts, taxation, and interest obligations at scale. Monetary monopoly was an outcome of that process, not the original goal. Credit and interest pre-date fiat. What fiat did was abstract and centralise enforcement, making debt expansion easier, less visible, and politically survivable. Interest itself isn’t inherently evil. It’s a price for time and risk. The problem arises when interest is layered on top of money that can be created without constraint, requiring perpetual expansion to service past obligations. That feedback loop is what drives: • growing state power • permanent deficits • coercive enforcement • financialisation over production Sound money doesn’t eliminate cooperation, contracts, or credit. It re-anchors them to reality. With hard constraints: • credit becomes selective • capital allocation tightens • growth must come from productivity, not dilution You still get civil order. You still get contracts. You just get far less leverage over society through monetary abstraction. The goal isn’t utopia or anarchism. It’s reducing the surface area for systemic abuse. Bitcoin doesn’t solve human nature. It limits how much damage monetary systems can amplify it. That’s a meaningful distinction.
↩ replying to Michael Wilkins
"reducing the surface area for systemic abuse." I love that. Exactly. If I may make one distinction though... If it's just time and risk, that's equity, not credit. You deserve a piece of the upside for taking a piece of the downside. But the upside and downside don't exist until they happen. The distinguishing feature of usury is that it attempts to sever the risk and fix the time. That's the buying and selling of something that does not exist. That's what drives the cycle. The debtor is the servant of the lender. Equity investing is cooperation in real time. Usury is using property as leverage to gain a claim over the future of those who need it or want it. This consentrate power of one over another, requires enforcement and creates a feedback loop. Debt power grows and becomes the power structure over everything. It captures kings and kingdoms and creates the state. It drives them to endless wars. It captures all productive work under its leash and crushes life, turning men into crabs in a bucket This is the world we live in now and this is how it was built. The original fiat of fiat is not a royal decree. It is the signature on a loan. The lie is that a promised future can be turned into value now. You can't spend the outcome of future work. Only past work. That's what Bitcoin does. That's why it creates deflation. Because it stops the "pulling forward" of value. The value of future work does not exist yet and it should not be used as a claim on the value of past or present work. Bitcoin anchors us in time and reality again. It doesnt just replace the government money printer. It reverses the flow from freedom to power everywhere.