A little history

Look, I don’t want this article to be too long. We all have busy lives and it probably feels you have lots of other things to do as well. I’ve tried to explain it as shortly as I possibly can, however, we do need some historical context 😉

Do you know WHY we invented money?

And with “we” I mean US the people, not “governments or emperors”..

The short version is very simple. We invented money because we learned how to grow food and how to deal with livestock. Before that, we were hunters & gatherers for most of the time we were on planet earth. So, we didn’t NEED money for 95% of the time that we were on this planet since we lived in small groups and did not have time to do anything else besides staying alive and living in the moment. However, like I said, when we started to learn about agriculture, we suddenly could provide food for much larger groups of people.

This allowed us to, suddenly, do different things. To specialize in specific areas and add value for the group (society) in various ways. Now, all of a sudden, we needed a system how to measure specific value compare to other things.

How much is a painting worth compare to appels?
How much is clothing worth compare to meat?
How much is amusement worth compare to vegetables?

Also, what if I already received apples for my acting in the theater and someone else could only pay me in apples as well?

Creation of money

We all figured that we needed some kind of “medium” or “form of measurement” to find out who owes what to whom.
When society is still small, a lot can be done based on trust.
You trust your neighbor to give you “something of value” back whenever he has something to give to you. So you just fix his pants and trust that he will give you back tomatoes whenever they have grown again.

But when groups were becoming bigger groups, bigger groups became villages, villages became cities, cities became countries..

Well, we couldn’t just simply “trust” each other anymore.
So, a schoolboard with lots of notes in the center of the small village no longer cut it anymore.

No, we needed some kind of medium where we could, temporarily, store the value of our work in.
Something where we could store our economic output in, our added value for society, something of which everyone knew what it was worth.

That’s WHY we invented money.

We NEEDED it in order to be able to transact with each other whenever we wanted. We NEEDED it so that people could add value in various ways instead of only providing for food & shelter. We NEEDED it so that we could live freely & independently of other people wants & needs at that specific time.

We did NOT create money so that governments could enforce taxes.
Also, we did NOT create money so that third parties (governments & banks) could hold & control our net worth.
And, finally, we did NOT create money so that a central authority would be able to print more of it whenever they think it is necessary, without having to work for it.

Definition of money

This leads us to a very easy & clear definition of money.

Money is a medium where we temporarily store our wealth in and is able to hold this value through time & space.

In other words, I want money to be a “medium of exchange”, a “store of value” or an “unit of account” so that I can measure my wealth, can exchange/trade with others and know how much certain things cost that I want/need in my life.

For money to be in MY best interest, money should be worth the same amount of goods & services here as it is anywhere else in the world. Also, it should be worth the same amount of goods & services now as it is in any other time in my life.

Again, money that works for ME as an end user, is money that holds its value through time & space.
Whenever & wherever I want to spend it, since it is MY economic output, MY work, MY time & MY energy that is stored in a medium, I should be able to decide this for myself.

Right? Right…?

The conflict of interest with governments

The conflict is not that difficult to grasp.

Me, you & anybody else in your surroundings that need money, are end-users.
We don’t create it, we are basically forced to use it.

We also don’t actually own it. We only “own” it to a certain extent. Everything we “own” has counterparty risk since governments & banks can take it away with one push on a button.

Again, I’m happy to use any form of money. As long as it holds value through time & space. Because then, it’s to my benefit.

And here is where it goes south.

Governments (& Central Banks) do NOT want a money that holds value through time & space.
It’s a conflict of interest..

They, in fact, want it to LOSE value through time & space.

Because it gives them tremendous power & control over you & anybody else.


They are the ISSUER of the currency units. When you are the ISSUER you are allowed to create monetary units out of thin air, whenever you deem fit.


When you create more monetary units than there already are, by definition, the units already in circulation get worth less (inflation). Think about it, more currency units chasing around the same amount of goods & service make prices go up. The purchasing power of one unit goes down whenever you create more of the same units that go into circulation.

Owning a currency, that you can print/create out of thin air gives you the power to buy stuff you don’t need to work for. That’s also why countries all want the power to do/have that. This creates a world where there are tons of different currencies and WHY your “money” that you make (by working for it) isn’t worth “value” in other parts of the world.

Countries, rules & regulation, decide that your money is no good there. This is not in your best interest either. Because now you have to convert your money into their currency, losing lots of value via transaction costs, making the banking system richer, again, by stealing your value.

So, I need a money I can trust…

As long as a government, central bank or commercial bank can create monetary units, my money gets worth less.
This means that they are, factually, stealing my time & energy.

It’s losing value through time & space.

If I wait 5 years before spending it, it’s worth less by definition through inflation.
If I spend it on the other side of the world, it’s worth less (or nothing) by definition due to transaction fees or being it a illegal currency there.

And, the last couple of years, inflation got out of hand due to bad monetary policy and too high levels of sovereign debts. Now, they steal even more of my time & energy that I temporarily stored in their (mandatory) medium.

No, not anymore.

I need a money that I can trust.
Or, even better, a money that I don’t have to trust.
A “trustless” money.

Money that can NOT be devalued. A money that can NOT be printed/created out of thin air. A money that is global and is worth the same amount of value anywhere in the world.

Something like a decentralized global form of money, that is faster, cheaper & easier to use. That nobody can manipulate, confiscate or exclude you from using.

If only…

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