Here's an old, beautiful post on that same pension theme (#1573526) that apparently hasn't been shared on SN.
fucking, WHAT?! Isn't SN a permanent repository of all Den's work?! Yeah, pay me 3mil rewards pools on a daily basis and it freakin' will be!
Without defining it more narrowly (which monetary economists do to their heart’s content), money is the technology by which we arrange the division of labor: I do my thing; you do yours; and we can trade the surplus production with one another
Zooming out across time, the problems you face when saving for your immediate or far-off future is a perennial problem that all human societies have faced. You’re trying to figure out how to maintain yourself – survive, and even thrive – when you’re no longer young, fit, energetic, or smart enough to produce the value that previously sustained you. We know that we will grow old; slowly then suddenly.
Note that this isn't actually that different from what a government/social security/Nordic welfare state shite do when they provide pension payments until death (#1572236). Just on a much larger, bureaucratic, out-of-your-control, and inefficient scale.
In societies bigger than Dunbar’s number, (1) collapses. The history of human civilization has thus been a battle between (2) and (3) – between centralized structures that controlled mandated money, and structures using decentralized real-world resources for their monetary purposes. The minute we no longer fully trust one another (or can credibly commit or enforce deviations from such trust), those are the only two options available to solve society’s value-transferring problem.
Adam Smith's road analogy (suspended upon daedalian wings of paper money...) is great:
(3) uses tokens that have some alternative use – “intrinsic value” in economist-speak – the material of which we are then “wasting” in token-passing rather than making other things with them. This is the domain of commodity moneys: copper, silver, or gold. Adam Smith’s famous analogy was with roads: they take up space that we could have used for farming (thus, inefficient) yet they serve a valuable purpose in allowing us easier transport: from here to there, and from the past to the present. This is the real-resource cost of (commodity) money.
The virtue of (3) lies in its decentralized nature and fairly anonymized use. I don’t need to know who I am transacting with; I don’t need to involve a bank or payment processor to double-check that my customer is good for the money (all of which leaves electronic tracks); all I need is to make sure the payment items I’m receiving are proper. The drawback is that it almost only works in spot markets: any time you want to transact from afar, or temporally separate delivery from payment, (3) works very poorly for moving value.
Here's a good example of where the boomers fucked up, surrendering/not upholding their end of the generational bargain: steal shit, extract from the rest of us, don't reciprocate. (It's very nice that Siggy does it a little bit now) #1521908, #1499251
...
The state is, theoretically, infinitely lived, and can credibly enforce that generational agreement by repeatedly taking from those who produce to ensure that those who no longer can, may still live. We don’t know what the subject of tomorrow’s state will bring home, and in addition to primitive societies, we can’t be sure how generous or benign tomorrow’s state will be with us. We’re getting the market risks of primitive societies or capital markets, wrapped around decrees by whoever controls the democratically elected chamber of power.
"A world based on bitcoin doesn’t, contrary to its proponents’ rallying cry (“Bitcoin fixes this!”), fix this. Human beings that are born and die in the care of others – with the critical in-between life where they create value – are forever faced with this time-traveling problem"
one way or another, we must tap into future society’s ability to produce goods and services. By fixing the quantity portion of the equation, it allows you to immutably know how many sats you possess; the rest of your community has a hard time confiscating those from you. Still, you’re left with market risk: you don’t know how much groceries, health care services, or Netflix shows your stash will provide you with.
Gold has that same problem... you're entrusting your future wellbeing to a future you can't know too much about (its abundance, its willingness to share with you, its demographic profile and thus its economic strength)