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Bitcoin, the barbarous relic

Many Bitcoin devotees decry modern economics with its debt-for-money and laxative easing which serves entrenched and corrupt political power. They argue that a public blockchain and limited coin supply restores honesty to money, and hence economic justice.

Much of this thinking is aligned with the the Austrian school; Ron Paul and Max Kaiser famously believe that money should be a commodity, with hard limits on its quantity so that politicians cannot manipulate. Because Bitcoin has some of the properties of gold and more qualities besides, this wing of monetary reformers has largely jumped aboard the Bitcoin train, (although the question of intrinsic worth remains unresolved). Indeed it seems as if the whole Bitcoin community is caught up in this narrow belief about what money is.

Trust in our financial institutions has eroded so far that cryptocurrency fans are now envisaging a whole financial system 'without' trust. This is perfect for when you are paying your protection money to the mafia, or taking payment for a plane-load of cocaine or buying vegetables after the apocalypse; with no trust, you need to exchange value for value, irrevocably and on the spot. You don't want to hang around for four working days, take a cheque or identify a neutral escrow agent. But this reliance on commodities to settle debts is massively inconvenient and favours those who own the most commodities. Barbaric even, compared to the wizardry which is possible using credit.

We should remember that credit in its many forms has been vital for economic growth and the prosperity we enjoy today. I would argue that access to affordable credit is a pillar of economic justice which our elites cannot be trusted to supply. That's why we need to step back and understand how properly governed credit can serve as everyday money between civilised adults. Rather than striving for a trustless society just because certain institutions have monopolised and abused our trust, we must learn to place our trust more selectively, and become worthy of the trust of others, of course.

Here is a simple example of how extending trust can replace the need for money. Jack needs a bus fare to get to the market to sell his organic produce. Either he can go to the bank and hope it is in the bank's interest to lend him the bus fare, or he can ask the bus driver to give him credit until the evening. Lets say the favour is granted. Though it may not be written down on paper or in a blockchain, that credit is (like) money, because it pays for Jack to get to market. By extending trust in a private agreement, the bus driver has enabled Jack to get to market, in this case at no cost. At the end of the day, when jack pays double for the journey home, the credit having enable Jack to get to market, is extinguished.

The revolution that libertarian Bitcoiners are struggling for will not happen until the people understand HOW money as a commodity (that means all altcoins) is owned by the rich and serves the rich. Bitcoin will always be scarce, and will create its own ultra-wealthy elite. Every time we earn, spend, donate or covet a commodity currency, we affirm the power of the rich to flood and choke the economy with money. That power is the source of all booms and busts, most of the takeovers and war financing. Governments today are held to ransom exactly as the first Rothschild boasted two hundred years ago.

We need to raise our consciousness about money itself. We the people absolutely can give credit where it is due, empower the poor and free the debt slaves. We can direct money to where it is most needed. We can have as much interest free credit/money, as we can create a trusting context in which to issue, accept and redeem it.

For many years now, members of thousands of local mutual credit 'clubs' already agree to honour one another's credit equally and then they exchange between themselves without money. Thomas Greco calls this the Credit Commons. I call it peer-to-peer money. Keynes proposed a similar system for the post-war international economy.

Instead of building a barbaric money system for a Mad-Max society, we need to grow our existing mutual credit infrastructure. LETS, time banks, and business to business barter systems have been around for years, but now we need to connect them into a global network, in which the credit issuance is pushed right to the edges. That's what economic justice means.

The largest noncommercial exchange is CES


In the right community, I could see goodwill loans totally working. Such a blockchain-based token would help the community assess its health and identify those who need help. It would be interesting to see this tied to a reputation system as well.


We need to enable ourselves to "issue" money by giving (and accepting) credit.

Actually, this is the same thing or at least very close to what Marc Gauvin intends in his BIBO money proposal. When you dig down, he also says that money should be created as credit.

As for Bitcoin, I agree that it takes the current faulty money system and takes it to the max. If anything, Bitcoin is even more elitist, favoring the rich, than the current money system. It simply changes one set of super rich owners of the money system for another. Instead of the rich of today, Bitcoin creates a new class of super rich and instead of money losing its worth gradually through inflation (which favors the debtors) Bitcoin introduces deflation, which favors the creditors.

Thanks Sepp.
As I understand Marc Gauvin is essentially arguing mutual credit is THE obvious way to run a sane money system, and passive BIBO is like a mini language invented to express that.

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