If money is considered an illusion then bitcoin is special
Our good friend Neil Woodfine has been on a mission to get this message through to the many people who seemed to be confused; money is NOT a shared illusion that humans agree on but a good that competes on the merits of certain attributes. "Money is a shared illusion" has been a powerful meme since the release of Sapiens by Yuval Noah Harari, which popularized the term and belief system. Uncle Marty has even fallen prey to this line of thinking during weak moments in the past.
3/ But If money is considered to be an illusion, then bitcoin's very special, very real monetary properties are being discounted. It makes the whole concept of money sound more random, whimsical, shaky, and soft.
— Neil Woodfine (@nwoodfine) June 24, 2019
But money is hard and real and serious.
5/ If money is an illusion, then to be safe, everyone needs to constantly second guess everyone else's irrational behaviour--"what money are they arbitrarily going to pick next?" Belief is fickle, and at any time it might subside.
— Neil Woodfine (@nwoodfine) June 24, 2019
7/ It's essential to understand that all goods and services are means to ends. Are you thirsy? You'll need some water for that. Neither your thirst or the water are imagined. Need to trade? You'll need some money for that.
— Neil Woodfine (@nwoodfine) June 24, 2019
As you can see from the above thread, treating money as a shared illusion doesn't seem to be very advantageous or make much sense because it would require constant questioning around whether or not the collective delusion is at a temporary Schelling point. Moving from shared illusion to shared illusion over time. However, this is a half-assed explanation of money that may be mired by the current condition of our global monetary system, which is an anomaly of a human history filled with examples of societies coalescing around goods that are used as money because of properties that make them desirable monetary goods. These properties include relative scarcity, fungibility, divisibility, and predictability among others.
Goods that exude the above characteristics make more sense as monetary goods when compared to other types of goods which do not have these traits. I believe the reason people are confused about how money works and believe that it is, in fact, a shared delusion is because of the historical hiccup of a time period we live in, in which governments have used their leverage of violence to force a certain, less ideal monetary system on the masses. As Hayek famously said,
"I don't believe we shall ever have a good money again before we take the thing out of the hands of government, that is, we can't take it violently out of the hands of government, all we can do is by some sly roundabout way introduce something that they can't stop."
For a while there, we had no choice but to use the money forced upon us by the State. Just over 10-years ago the table was flipped as Bitcoin hit the scene. Since January 3rd, 2009 we've had the first truly sovereign currency the world has seen since the gold standard was neutered throughout the 20th century, and it excels greatly at all of the properties that make a good a useful monetary good. Bitcoin is the scarcest asset on the planet along with time, it is highly divisible, fungible and has a very predictable supply schedule. This is no shared delusion. This is a fact of measurable, observable properties that exist in Bitcoin.
"Money as a shared delusion" is a meme that probably does more harm than good.
Final thought...
No sleep on the red eye is the reason for my tardiness today. Please forgive me.
Enjoy your weekend, freaks.
