I’m not sure I can properly express this insight. Some bitcoiners are claiming there will only be one money in the future (bitcoin) and it will be signified by being the global unit of account. There is also an observation or inquiry into what bitcoin is “backed by”.
But I counter these suggestions by noting that there has never in our history existed a time where there was only a single currency or money and that there is no founded argument to suggest this to be the inevitable end.
It is also true that there is no meaningful definition of the backing of a currency. It is usually I think those that think fractional reserve banking is somehow intrinsically bad and detrimental that also believe that a currency should be backed (or is or isn’t backed etc.).
On Different Types of Money or Value Trends
There is certainly a need to sometimes store wealth and sometimes a need to spend that wealth. Historically different mediums served a range of uses between these two needs. When gold was a good store of wealth it was still not necessarily the perfect transfer of value. Different technologies arose to facilitate the transfer of the store of value.
Some technologies were certificates and settlement institutions that transferred the wealth stored in the gold but without transferring the gold itself. Other technologies arose to store wealth and these technologies were more easily transferable. They were not backed by gold and nor should they have been.
Paper money arose because it was useful rather than out of a plan to enslave the population. That it is not “backed” by a valuable commodity does not at all mean it is less valuable or less valued than a money that is.
(The Adam Smith quote I use to back this assertion escapes me atm.)
What Should the Value of Money Be or What Should It Be Backed By?
Here I am thinking about the (to me) now obvious relation between the work we contribute to our economy and the store-able and transferable income we are paid in relation to it. If we think of ourselves as a global community that admits to needing to produce and advance to survive etc. then I think it is quite reasonable to suggest that an optimal system would seek to find the proper valuation of work done.
The more accurately we measure this value the more efficient we can be as we pay people properly for their labor.
Re-visting the Relationship Between Bitcoin and Pyramid Building
I finally tried to check for empirical evidence that the pyramids arose out of natural order as a basis for a strong economy. That perhaps the Egyptians were mining a metal and the steady production of blocks was a relational byproduct somehow to this process.
But I don’t think I found this to be the case…
I think what we find is that the Egyptian records point to an ever evolving set of measuring and valuation standards which were quite perfectly related to the work involved in setting pyramid blocks (ie meticulously measuring the payment of workers in response for the work done).
Consider this passage, without worrying about the accuracy since it seems it must be at least in part true since it gives different names for different possible units of value for comparison:
What is difficult to determine is whether the actual weight of the metal was being described, or its value in deben, or for that matter, whether the Egyptians made such a distinction. For example, in the Cairo Ostracon 25242 verso, twenty deben of copper was added to four deben as the value of a basket, demonstrating that the actual weight was difficult to separate from the idea of its value.
A deben of copper was not distinguished by the Egyptians from one of bronze. In general, both were valued as one kite of silver (though this measurement varied somewhat, particularly over time). silver debens were only rarely mentioned on ostraca, but are more common in papyri. Papyrus, of course, was used to record official and thus more expensive transactions, while the ostraca were used by the villagers to record private, smaller transactions. Thus, when the word deben is used alone on ostraca, copper should be assumed.
A senyu (seniu), perhaps meaning “piece), is a weight in sliver equal to about 7.6 grams. However, unlike the other weights mentioned here, the senyu was exclusively a unit for calculating value, and was not considered as a real unit of weight itself. Its value is calculated as five deben of copper (or sometimes six and as much as eight during the New Kingdom). The senyu could be used to express a value in the same column of figures with deben. The Berlin Ostracon 1268 states the value of objects in senyu, but the total of the column is in copper deben. The Varille Ostracon 25 shows the value of a razor at one deben, while a donkey was valued at seven senyu.
A third unit of value was the hin, a measure of volume equal to .48 liters. Its value was calculated as 1/6 senyu, but other calculations show that it was also equal to one copper deben. We believe that the value of the hin was probably based on that of one hin of sesame oil, said to be equal to one copper deben. Though other oils were also measured in hin, their values seem to vary in relation to the deben.
The khar is a measure of the volume of grain, either emmer or barley, equal to 76.88 liters. It could be divided into four oipe. The term khar can probably be translated as “sack” and was valued at two deben of copper. The khar was most commonly found as a unit of value for baskets, both because the volume of the basket was equal to its value and because baskets are relatively inexpensive.
It should be noted that both the hin and the khar seem to have been more of weights and measures rather than units of value.
Throughout Egyptian history, all of these measures do not seem to exist at the same time, with the exception of the period between Ramesses II through Ramesses V. During this period a bed, for example, might be valued in deben while its legs were valued in oipe.
The rough equivalent values among deben, senyu, hin and khar, as provided above, reveal the difficulty of calculating precise values for commodities, as well as fixed ratios among the four different units. According to various documents, for example, a senyu could be equal to either four, five or six deben.
On the History of Evolving to New Measurement Standards
I have also previously suggested that an initial use case for an otherwise useless byproduct of mining might be as a standard for weight. I am now thinking of how, from an objective view, each of the metals we eventually unearthed were initially useless in the sense that we could not have a preconceived notion for something that we didn’t already know existed.
At the same time there is great work expended and evolution of our civilizations that was needed in order to get to some of the most useful metals (and for the accurate identification of such metals). So you have an evolving ability to measure which creates economic standards that are both better but still limited. These standards “break” or evolve to new standards as we learn and develop better mining and production capability (and find new useful commodity, elements, and perhaps what might be considered digital versions of each).
The Natural Theory of Money
I think we have really collectively misunderstood money, which is part of the nature of it. There can’t be anything that is valuable unless the players deem it to be. What we really want is a proper measurement of the work inputted versus the output efficiency gained or harnessed.
This is the optimal usecase for money which is seemingly quite a radical perspective than those that are tying to optimize the spend-ability of the bitcoins they are holding.
Bitcoin’s price ultimately reflects the cost to produce blocks as the cost adjusts to reflect the expected demand.
It becomes our strongest, most apolitical, and accurate measuring device of useful work.
It’s use as a currency then is simply a necessary byproduct of the accurate and apolitical measurement it provides.
To advance the former at the expense of the latter is to degrade the incredible significance of the technology as a tool for measurement.
I think then it will be shown that it is not just the crux for the measure or comparison of value but measurement in general; That our ability to accurately observe the cosmos quite perfectly relies on our ability to accurately assess useful work.