parman_the on Nostr: Smol rant on the lingo of money... Currency is backed by money. Money itself has no ...

Smol rant on the lingo of money...

Currency is backed by money.

Money itself has no backing.

If it did, the backer is money, the backee is currency, not money.

Bitcoin is becoming money of the world. Not global currency. Not reserve currency. Not asset (which can appreciate in value), but money (whic measures value).

It is not money yet, except for the community of traders that truly use it as money, isolated from their country's trade and it's money (ie no one).

Again, Bitcoin is not money, it is becoming money.

This is not a blemish on Bitcoin, it is about defining money. Clearing this up helps discussions.

One way to think of money which might help is like this...

1) first define the circle around the economy, eg Australia

2) then look for the token that is ubiquitously accepted and preferred in trade.

In Australia, AUD is money.
In Uzbekistan, AUD is not money.
Bitcoin is not money in either economy.

For the entire world, we have barter, but the closest thing to money is USD. Gold certainly is not world money, because USD by far is preferred.

USD isn't backed by gold. If it was, gold would be money, and USD would be currency (as it once was).

So USD is money of the world, nearly. It certainly is money of USA.

Labelling it money does not award the property of it being good, nor sound. USD like all fiat is unsound money, and shit. "Sound" referring to ease of creating more (hard money vs easy money, DONT SAY SOFT MONEY!🤣)

I could be wrong about the following, and if so, it doesn't change what I've said so far, but I'm not sure if gold was ever world money (as opposed to local money in local trade in multiple communities across the world).

I can't confirm if there ever was a time when there was significant world trade where gold was preferred over bartering the money of each country... When each country has gold as money, international trade was insignificant, I SUSPECT.

As international trade grew, paper trade took over to solve the friction.

If correct, this suggests gold can never serve the world economy as money, it will always need paper.

Bitcoin fixes gold.