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The bread I can buy to satisfy hunger is certainly not a delusion. Currency is an abstraction for negotiating and prioritizing satisfaction of needs. Yes, it's very blurry, but delusion seems to be quite a stretch if you ask me. Of course, many hold this view these days because we can print money et cetera, but there are still fundamentals at play such as needs, wants, resources, surplus, production, means of production, the harvest, and so forth. These are not delusional things, these are non-negotiable aspects of any civilization and any human collective as an inextricable part of the surrounding environment and availability of and access to resources. What do you reckon

Yes but why doe sthe baker accept that currency for the bread? They do so because of the collective belief in that currency's value.

Why does an interested man, on seeing a wedding ring on a woman's finger, decline to make an advance? Because of the "collective delusion of marriage" ?

No. Because the ring stands in for what-will-happen. It's a sign of consequences and expectations which are real, but grounded in the reality of human action.

When taking money for payment, we don't want bread -- bread satisfies my hunger, but not my need for *PAYMENT* -- which is to have *something to pass on* to another person, for what I want later on.

"Bread" is no more a collective delusion of hunger, than money is a collective delusion of trade. All trade is trade with money. Receiving "bread" as payment, isnt a payment -- it's consumption. To trade at all is to receive money, ie., that think which can be passed-on.

Trade is a game of receiving something pass-on-able for something consumable. That we use bank notes for this is a contingency, but it merely a symbol for the underlying necessity -- inasmuch as a ring symbolises marriage, which is that series of actions which will occur if you have an affair.

Money is not a delusion. Trade is not a delusion. People's need for a medium of exchange is as real as their need for hunger.

Very well put. Money derives its value from a shared understanding that it is useful for trade, but even in the event that this is its only value that doesn't make it an illusion.

I think it's more radical than that, money is trade.

Simply: if a person acquired bread to pass on (for something else they wanted), then bread would be money.

I think probably some animal species use money, on a rare occasion: if a monkey exchanges a grape for sex, and the money with the grape exchanges the grape, the grape is money.

It might be that amongst other animals, that ability to see the future-value-to-others of grapes is very very limited. So other animals dont keep grapes around. If they did, grapes would be money.

That the value of a grape depends, like that of a dollar, on what we expect another to take for it -- this makes it seem mysterious -- because we ourselves are distrustful of the future, and of having-what-you-dont-need.

I think this is an animalistic impulse: its a kind of paranoia about the behaviour of others. This is at the heart of why people use "collective delusion" and the like. There's something, in that sort of person, which views depending on the future behaviour of others with paranoid suspicion.

Yes. Money is the abstraction or value - it's the abstraction itself, not the currency itself, as the currency could take any form (gold, fiat paper, grapes, pearls, or a 4 ton Rai Stone [1][2])

Edit: Rai Stones often don't move (like coins/paper money do), but rather stay in one location. Per Wikipedia: "The ownership of a large stone, which would be too difficult to move, was established by its history as recorded in oral tradition, rather than by its location. Appending the transfer to the oral history of the stone thus affected the change of ownership"

[1] https://www.npr.org/sections/money/2011/02/15/131934618/the-... [2] https://en.wikipedia.org/wiki/Rai_stones

Currency is not given value because people "believe" in it or not.

It has value because the government decided that to operate inside its country, you must use this currency. This is enforced through taxation. It doesn't matter if you believe in the dollar or not, at the end of the day the government will tax you for a dollar amount and you're gonna have to pay in order to keep having access to the US market.

This is why cryptocurrencies have no inherent value, only value as it pertains to actual currencies.

You can have multiple currencies in use at the same time. A good example would be the Soviet Union where vodka could buy you things that rubles couldn't. Or as a more current example there's Venezuela, where the government backed currency is the Bolivar but most transactions happen in USD or Columbian Peso.

Yeah that's true, that happens when trust in the government has been lost, or when trying to avoid taxes. But there's an important distinction there. People use alternative currencies when the government is incapable of punishing them for doing so, and when the local currency is inconvenient to use, such as during hyper inflation. It has nothing to do with whether they believe it has value or not.

You make two strong arguments about why the value of money is based on people's belief in it's value. And then you just ignore them.

As you said, if people don't believe the government will enforce it, it has less value. As you clearly say, it doesn't matter what the government says, it matters what people believe.

And it hyper inflation or matters what people believe future value is.

You should rethink your definition of money because you've essentially demonstrated its value derives from belief.

What surprises me is how society gradually centered on currency and exchange of things instead of spreading knowledge. Maybe long ago, it was an obvious equilibrium, people didn't have time to learn, no means to teach fast and far. But now it makes us dependent. Each wants to ensure his survival by being a requirement for others to the point of obfuscation. And it degrades social links.

>It's kind of amazing to think that the system that underpins an awful lot of human activity is a collective delusion.

It not a delusion it's an agreement. Dollars are a form of ledger. They just keep track of who owns how much of a big liquidity pool. We had to pick something or we'd have to manage liquidity for a cartesian product of commodities(e.g. "Whats the price ratio of Chickens to Ford Taurus's today? Is anyone even in a position to exchange?"). Crypto is just an extension of this idea. Its has value because it facilitates exchange. I can turn dollars into bitcoin, bitcoin into ETH, ETH into yen, and yen into sushi. As long as those currencies are liquid they have utility.

When did you make this agreement? Did you sign a contract?

Or, did you simply find that this was the system in place, and you went along with it?

Re your point about crypto - did you see how you turned your crypto into yen (fiat) to get your sushi?

When did you make this agreement? Did you sign a contract?

You make this agreement every time you accept dollars for good and services. And most people do or would.

The agreement is "tacit" you agree simply by participating. You never signed a contract to drive on a specific side of the road, but I doubt I'd see you careening into oncoming traffic because of its absence.

> did you see how you turned your crypto into yen (fiat) to get your sushi?

Sure did why is that a problem? I could have turned the fiat into Marriott points and exchanged those for a hotel stay. Does that mean the fiat is worthless because I turned it into Marriott Points first? I just needed to get my liquidity into the correct medium.

FWIW I don't like to think of it as "buying sushi" instead I sold yen for sushis. Maybe I'll use my sushis to buy bitcoin from someone.

Yup, sushi surely is the ultimate store of value, just behind soap bubbles and airline seats.

This may surprise you but there is a whole industry setup around exchanging airplane seats for dollars. We call them airlines.

"The agreement is "tacit" you agree simply by participating."

Yes, but you are also forced to participate in order to pay your taxes. Even if you, for example, only conducted trade via barter, the gov would still require you to pay taxes in local currency.

Yes this is what "tacit" means. Just like you tacitly agree you won't murder people or we'll put you in jail. You don't get an option to opt out. Its called society. On the upside you get protection from others murdering you. The alternative as Locke put it is "nasty, brutish, and short". Are we really litigating this again? I thought we worked out the philosophy on this a solid 250 years ago.

> When did you make this agreement? Did you sign a contract?

All money in the economy is created through debt. Yes, someone signed a contract. Home owners did, students did, corporations did and even the government does it.

Finding a system already in place and going along with it is how societies work. You personally did not sign off on your country's constitution, any of the laws, nor the cultures and norms of whatever groups you, your family, and your friends consider themselves to be a part of. There is nothing at all unique about currency here.

> This is one problem gold bugs seem to gloss over: sure your currency might technically be backed by gold (or whatever) but that's only the case because there's an enforcement mechanism on the humans involved (ie the government). And that government only exists because the people collectively will it. So there's really no difference between this and a fiat currency.

How do they gloss over it? This is like one of the primary grievances most of them seem to talk about -- that currencies which used to be backed by gold are no longer, so clearly there was no supernatural force that was inextricably linking a dollar and an amount of gold. They're openly and explicitly unhappy with the government's change of currency. I don't think I've encountered any who thought that gold backing could transcend the government. Although that being said I'm talking about the traditional Ron Paul style "gold bugs" here -- I haven't really followed the lunatic fringe of crypto culture so maybe that's what you're referring to?

You've misunderstood my point.

You're saying gold bugs complain that the currency is no longer backed by gold. As an aside, the US dollar has never been 100% gold-backed in its history. Ever. Not once. Anyway, my point is that even if it was gold-backed (even to 100%) there is still trust required that that's actually the case and you're reliant on the government to actually enforce that.

My point is that a gold-backed currency is no better than a fiat currency because you're still reliant on a government and collective delusion either way.

You misunderstand the gold bugs' position. They do not believe they can somehow make a currency that is impervious to a rogue government's meddling or is free from the need for any government regulation or enforcement. They believe a gold standard is a better monetary system than the federal reserve fiat one in use now.

Trust can be eliminated by switching to commodity money (made of the commodity, such as gold), with the option of appraising the money during a zero-trust transaction (those with trust can take minted commodity money at face value). Fiat and gold-backed currency is not the only option here.

> So there's really no difference between this and a fiat currency.

One can be printed into infinity, one cant. Gold is manifested mistrust in governments ability to manage a currency.

You just argue that "gold backed" is a scam that falls apart the moment people actually try that.

> It's kind of amazing to think that the system that underpins an awful lot of human activity is a collective delusion.

This could apply to religion, politics, nation hood, loyalty, or money. A few other things as well. Arguably, sexual monogamy. And marriage. Also, all mass panics and hysterias. I could go on.

It's interesting to reflect that these human delusions are all masks and costumes for power structures to exist.

How about sub-cultures in programming and technology?

> So there's really no difference between this and a fiat currency.

Exactly. Gold is a currency just like the dollar or euro. If you are a gold bug, you believe that no other currency in the world is trustworthy. If this is true, good luck figuring out what to do with your gold after the collapse of civilization, because I find it isn’t a particularly good dinner option.

> If you are a gold bug, you believe that no other currency in the world is trustworthy

False dichotomy. Gold is valuable when some but not all currencies (especially your own country) goes to shit. This is as plausible of a scenario as EVERY currency in the world becoming untrustworthy.

Shoving gold up your ass and crossing a border is a hell of a lot easier than shoving a wheelbarrow of inflated cash, or even a small stack of 100s (USD), up there. There are very few materials with as much value density as gold that are readily tradeable in most large cities as a commodity. To some extent crypto can serve a similar, but not identical, purpose.

I think of this rather as "consensus truth" - and far more of reality is consensus truth than we often recognize!

I think "social construct" is the term you're looking for and yes every culture on earth relies on social constructs to navigate reality.

It absolutely is a collective delusion!

The only thing I would slightly disagree with is that gold is a real thing, that people do consider as valuable regardless of the governance system. You can physically hold gold, it is portable, it is rare (doesn't grow on trees) you can make something with it (jewellery).

>It gets even funnier when Crypto Bros start proselytizing about blockchains.

What is a "Crypto Bro"?

Lyn Alden: She's pretty much a crypto bro.

Basically every system we operate under is a collective delusion, after you strip away the layers.

Is it really a collective delusion? Isn't it more of a social pact?

First of all you're missing how middlemen eat away at your money's value in the legacy banking system. This means that there's a lot more room for corruption within the fiat system, because it's top-lead and opaque. And that's also why the banks and political leaders cling to it, because just imagine the unfathomable wealth you can accrue by controlling all that! It's your secret ticket to covert taxation of the people, after all!

Meanwhile Bitcoin can only be influenced through transparent, though anonymized ownership (it isn't totally anonymous per se), and so no one party has monopoly over what should happen next. This is great, because it makes ownership and stewardship of it a matter of national security, since you cannot deny other parties, organizations or even nations from also owning a share of it, and so it also forces diligent cooperation across borders.

The same thing is true for gold, to an extent, but the handling and ownership of gold requires a ton more resources and security to be done safely, and it's also far less transparent.

And I haven't even started to discuss the other great properties of crypto, such as corruption, crime and extortion resistance. If you want to do either of the aforementioned crimes, then cash is simply a much better choice. At the same time it's also regulation resistant.

The fact that it's also inflation-proof is really just a bonus after all that. So all in all I think you should do more research and rethink your position on the many great alternatives to fiat.