Shelling Out: The Origins of Money (2002) | Hacker News Reader

Shelling Out: The Origins of Money (2002)

nakamotoinstitute.org

79 pointsnoch28 comments

I find that "Debt: The First 5000 Years" has the best overview of money (predominantly credit systems), though admittedly it's a much longer read.

I recommend the recent "pop" book about Money as an intro: https://www.amazon.com/Money-True-Story-Made-Up-Thing/dp/154...

Yeah, this is pretty much the definitive book for these matters. It's a shame that Graeber didn't talk about cryptocurrency much, it would be interesting to know his thoughts. I just found this one tweet that he has written, which I suppose explains why:

https://twitter.com/davidgraeber/status/990857460176089088?l...

+1 That is an amazing book.

Just finished this book. At times I found that some of his generalizations were too broad, but overall I thought the book was excellent, especially the insight that credit predates money and is the more “natural” form of exchange.

I was pleasantly surprised: when I've seen the source (“nakamotoinstitute.org”) I expected the typical Austrian “First barter, then gold as money and then the fiat scam” narrative, but this one is much deeper and uses references that goes way beyond the Mises/Hayek pair you see on almost every bitcoin related publication. Sure, it talks about Carl Menger but it also talks about Graeber, which is as far of you can get from the Austrian school.

This need a (2002) in the title.

Szabo is an unorthodox yet very interesting voice on topics where economy and crypto intersect.

He pretty much introduced the idea of smart contracts.

You might deeply disagree with his perspective (both historical and political), but dismissing him would be and error.

It's sad that he's gone crank/alt-right-ish, but there's plenty to learn from him in his essays, particularly before the last few years. Can't remember any recent ones I found insightful, though =/

Year added. Thanks!

I am not sure the percentage (99%+?) but most people don't grok how money actually works, they consider it something like water or air which is looked at as a given instead of something which was created according to an engineered system. If someone doesn't understand the history of money and what money actually is they will never 'get' cryptocurrency and why it is so disruptive.

Trading goods, shells, physical gold/silver, notes of credit, private gold notes, public gold currency notes, fiat currency, credit, and finally cryptocurrency.

Fiat currency has evolved from being an I.O.U. backed by real commodities, to worthless paper.

On the other hand, crypto-currency began life as a worthless stream of numbers, but is now (mysteriously) worth quite a bit of cash.

"Worth" I think is the key word here. Just like fiat currencies, it's only worth as much as people think it is, which is much more volatile than the Dollar, Euro, or Yen (or Yuan).

Per the David Graeber quote on the above, "It's more a speculative commodity than a viable currency." Which is generally how I view it...

I would argue cryptocurrencies are so much more than simple stores of value that it (luckily) keeps a lot of rich and/or powerful people in the upper echelons of finance confused and dismissive. If they truly understood it would have been banned a long time ago.

Fiat isn't worthless paper, and cryptocurrency's stream of numbers was never worthless either.

Both have utility and usefulness, and value proportional to that. Usefulness creates demand, demand creates value, and demand/supply = quantity of value.

The comparative utility and value of fiat vs crypto is a fascinating rabbit hole.

And we see again, proven by historical records in the article, that the Commodity theory of money is wrong.

Yet, their evangelists don’t stop to spread the lie that scarcity and “intrinsic value” would be the root for money’s value. Just another trap they span out to sell you their toxic ideology of austerity and raise the price of the worthless golden commodity they are sitting on.

As opposed to what exactly? We currently live in a world of finite resources. Eventually the laws of thermodynamics will apply as we live in a physical system.

Say you had a note that corresponded to having a hamburger. As long as the note actually is convertible for a hamburger it has basically a fixed value and is therefore useful. It might even be more valuable in the future if a burger costs more $. What happens when there are more notes than hamburgers available? Nothing bad might happen for a while. What about if there are all of a sudden 1000 hamburger notes for every physical hamburger? What if at a certain time more people want a hamburger than there is supply for? The hamburger note devalues and becomes worth less than an actual hamburger.

Monetary theorists don't really use the concept of "intrinsic value." All value is imputed. If something intrinsically has a use, then as long as people value it for that use, the thing will have some imputed value as a basis for trade, which makes it easier for something to go into circulation as a commodity traded for its own sake (and potentially at some point a medium of exchange). Despite examples of other methods of MOE arising, we do also know it can happen that way. Even Graeber's Debt thesis is compatible with the idea that the media chosen to mark debts seem to have been things there was a use for and which were circulating for that use.

I think there may be some valid points behind this invective, but you’re not making them. Bitcoin was a compromise because it seemed like the only viable alternative to a rapidly unraveling monetary system. My guess is that your grievances are due there, and not to Bitcoin, which simply stands by and accrues value through systemic failure. The idealists wanted something you might find much more amenable, and yes, capitulation has made many of them rich, but only in worthless paper and bits. Maybe a car. Maybe a yacht. All worthless. We still don’t have a functional economy. You still can’t buy peace and freedom with Bitcoin.

If curious see also

2018 https://news.ycombinator.com/item?id=16336880

2017 https://news.ycombinator.com/item?id=14918574

2015 https://news.ycombinator.com/item?id=8901026

2011 https://news.ycombinator.com/item?id=2597253

> Warfare involved, among other things, killing, maiming, torture, kidnapping, rape, and the extortion of tribute in exchange for avoiding such fates. When two neighboring tribes were not at war, one was usually paying tribute to the other. Tribute could also serve to bind alliances, achieving economies of scale in warfare. Mostly, it was a form of exploitation more lucrative to the victor than further violence against the defeated.

This hasn't changed. Maybe post-humans will be better. But I don't see a lot of hope for humans reforming.

There are a lot of monetary theories, policies, and histories. But are any of them meaningfully predictive? I can’t grok it precisely because of the lack of concrete formulation, compare to say physical laws. Is there even a way to distill it down to tractable mathematics?

A lack of trust seems to be the key ingredient for currency to spring into action. If you trust that I will give you 2 lambs in the spring, you will be okay trading me the 3 bushels of wheat now. If not, you're going to want collateral or some form of currency.

Giordano Bruno said that whatever has the most value and the least cost of storage becomes money.

I think that money should now become a high technology and take advantage of that. We ask it to do a lot and so we should give money the tools to be effective. Starting by integrating more information.

On a side note, I’m starting to suspect that Bitcoin, and Satoshi Nakamoto, is an internal NSA job.

And Satoshi must be the alias name for some cryptography expert, or experts, inside the NSA itself.

Hah, and even if you rearrange the words, its acronym is NSA. Like, Nakamoto SAtoshi.

I just noticed that.

And maybe the architect behind it, used a Japanese origin name, to throw people off their trail. To pin it to some foreign country, instead of the United States government.

After all, who else can keep a big secret like this? And laugh all the way to the bank. While trolling the entire world, at the same time.

Some ideas:

1. The Satoshi Nakamoto guy on the message boards, wrote in perfect colloquial American English. Even his sense of humor was American. His grammar was perfect, and similar to a Millennial/Gen-X aged American. Like, he grew up chatting on AIM and ICQ back in the 90s and 00s. And probably on BBS message boards back in the 80s and 90s.

2. Satoshi mined the originating Bitcoins, and they are incredibly valuable now, and worth around $8.8 billion dollars in mid 2020. Who wouldn’t cash out on it, and realize all the gains, or even some of the gains? How about some super secret organization, that specializes in cryptography. And especially an organization that doesn’t immediately need the money.

3. Bitcoin mining is consuming a ton of electricity. Increasing carbon pollution, and depleting natural resources. There is only one other country that is generating so much electricity, that a large percentage of it, goes straight into Bitcoin mining. You can guess for yourself which country this is.

I don’t think this was intentional, but maybe a side effect is that it will bankrupt other competitor countries that the USA does not like.

4. Maybe another strategic end goal is to trick others to put their money into Bitcoin, and wait until it becomes very very valuable. Like, 100 or 1000 or 1 million times more valuable than it is today, it’s a very long and patient wait, then the US Federal government will pass a law declaring the Bitcoins to be illegal tender. And will then pass another law to forcefully seize all private Bitcoin assets, like the way cops take candy from a baby, with their Civil Asset Forfeiture policy.

Who knows. All this is just fun conjecture. Maybe there really is a Satoshi Nakamoto out there. But, I’d probably believe Santa Claus is real, before I believe that cover story.

Szabo seems to be missing important background on money https://blog.kareldonk.com/on-money-bitcoin-and-cryptocurren...

"Let me start right away by stating that the primary purpose of money is to enable and facilitate slavery."

This does not seem like important background on money.

I suggest reading the rest.

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