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256 sats \ 8 replies \ @elvismercury OP 4 Oct 2023 \ on: Lyn Alden book club part I bitcoin
One of the most interesting (and novel) ideas Lyn introduces is the unified theory of money. We can think of the credit theory of money as a kind of 'social ledger', which is pretty intuitive. What is not straightforward is to frame commodity money as also being a special kind of ledger, one whose integrity is overseen by the physical world.
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Social ledger: if you're a good and helpful member of a community, other community members take note of that. You've got a positive balance in their mental ledgers. If you help your friend move, you expect your friend to reciprocate.
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Physical ledger: if you have a piece of gold, then your possession of the gold is itself a manifestation of the state of the ledger. I can't claim to have a piece of gold that you have because I literally do not have it -- conservation of matter says that it's yours alone.
This is an elegant way to bring the commonalities of these ideas together under one construct, where the strengths of both can be laid side by side to paint a fuller picture of what money is and what it does and how its monetary function is (or isn't) enforced.
God knows there's no shortage of "what is money" podcasts and opining. Did Lyn's formulation change how you looked at btc?
I don’t think it particularly change my opinion of BTC but rather reflect on the general nature of value. Perhaps how the social and physical ledger can be so removed from one another; the most valuable members of society may not be represented as the most valued. Not a novel idea but an intriguing way (for me) to view it.
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Yeah, that's a really interesting philosophical / ethical point, I think -- the "pure" Austrian view, so far as I can tell from reading Mises and others, is that money is really the world's vote on how much value a person provides to the collective.
It seems glaringly obvious to me that this surface-level read misses a lot of stuff, or at least, requires some deep nuance to make sense of. For one, you have to be very clear on what your terms mean, e.g., what it means to "provide value" -- it's easy to confound that with "being a decent human being" (and now we have to define decent), and those are correlated, but not identical. We all know rich assholes and psychopaths. But there's nothing that says a psychopath couldn't delight hundreds of millions people, e.g., Steve Jobs.
Anyway, it's a worthy thing to wrestle with.
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Value is of course subjective but probably quite predictable. In pre-industrial societies meat maybe more valuable than maize, until there is a limit in meat prior to a hunting party going out etc. and then other staples are valued more highly. Meeting basic human needs;food, shelter, warmth will also be prioritised.
But what is that as societies increase beyond a certain size or collection of kinship/familial groups their is a requirement to verify value rather than trust it.
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Not an answer to your question above, but just a general thanks for the quality discussion so far. And the poke.
I've only gotten as far into Part 1 as Lyn's unified theory of money, but plan to speed up my reading going forward.
(BTW, did I miss a post where we kinda agreed to have read at least Part 1 by some date?. It's certainly possible.)
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I put it in the comment to the original announcement, I think, but the notifications can be a little hard to keep track of so no shame in not knowing.
Just curious, how much time would you need to get to part 2 of the book? (Trying to figure out when to do the next section.)
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I'd say about a week?
But please, don't let me hold you back!
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I was surprised to learn this needed to be said. I never saw the theories as competing. It took me some time to appreciate how all forms of money operate as a ledger, but I always assumed that was the case and that I was just slow to figure out how.
Typically, I walk people through how bitcoin is a money by saying, "all forms of money are a kind of ledger ... and many forms of money require you bearing your ledger entry ... bitcoin just cuts the shit and is explicitly a ledger ... a ledger that you can uniquely verify yourself."
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Also worth noting is that these two types of ledger can overlap. Someone with a high social status can be given physical items or vice versa.
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