The Problem With Money Explained – Bitcoin Magazine

This is an opinion editorial by Arman The Parman, a Bitcoin educator passionate about privacy.

The Problem

To flourish, humanity needs to go back to free market money (not issued by central banks or governments, but arising from the market) that can’t be manipulated by central banks and/or governments, nor eradicated. This money also needs to be digital, to facilitate international value transfer, yet scarce (digital tokens have always been “copyable”).

Gold used to work well, but being physical, as trade expanded beyond the local town to international trade, peer-to-peer exchange of gold became impractical. The solution to that weakness was to centralize it (using bank ledgers instead, or bank “notes”), and digitize it (digitization of notes/contracts), allowing banks to become intermediaries of all non-P2P transfers of money. Gold’s physical nature led to the introduction of gold-backed paper/digital money, but then ultimately to fiat money — government-issued money not backed by anything at all, not even gold. Fiat money costs nothing to produce, is not scarce, and allows governments to avoid market forces. It allows the government to always expand, facilitating a relentless and gradual march to worldwide totalitarianism.