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Comment by wpietri | Hacker News Reader

All currencies are built on trust. The reason the wildcat banking era failed was lack of trust. The reason various national currencies failed was never about resources, but lack of trust in the government behind the currency. The USD has been a very strong currency because it's backed by a stable government with a strong economy and has a stoutly independent central bank, which has built up enormous trust as a custodian of the currency.

I grant that the rhetoric of Bitcoin is about energy usage, but it doesn't work that way in practice. The most obvious use is the rise of Ethereum and its shift to proof of stake rather than proof of work. But there's plenty of other evidence. David Rosenthal has some good evidence there, like:

https://blog.dshr.org/2024/10/it-was-ten-years-ago-today.htm...

https://blog.dshr.org/2024/05/sufficiently-decentralized.htm...

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Well, yeah. I avoided the subject of trust because it wasn't the subject of the comment I was responding to. It's a different component of money.

Money depends entirely on trust which is a form of belief. But it only matters because it accounts for energy. Because there is nothing to trust in if money can't be exchanged for energy. We trust that our paychecks will buy food because our society is usually fairly robust in that respect. We trust that the US government will go to war to prevent the USD from being deprecated, which lets us continue to use USD.

There's no trust that Bitcoin can always be exchanged for any arbitrary good or service - whereas USD can be turned into anything you want. Bitcoin will always account for some energy usage, but so will starting forest fires. The difference is that nobody is ever going to trade me anything of value for starting a forest fire. That's the trust element. But starting a forest fire leaves just as real an impact on the universe as mining crypto, as mining gold, as building bombs to threaten grifters with.

That also doesn't make much sense to me. Money existed long before energy was a significant commodity. Like, thousands of years before.

Energy is used to grow food, so, no. Keep in mind the context of my first comment.

Again, for most of agricultural history, energy was not used to grow food. The key commodity was land. The concept of energy you're referring to didn't come along until the 1800s, a couple thousand years after people invented the coin, and didn't have any real economic meaning until the industrial revolution.

I get where you're trying to go, but I just don't think it makes sense. If you're serious in trying to find some sort of fundamental thing behind money, you might read Buchan's "Frozen Desire".

I'll look into it, but, it's not true that energy was not used to grow food. Farming is labor, it takes human effort; food has to be eaten to grow more food.

You really seem to be having a hard time grasping what I'm saying. I guess I'll take one more swing at it just in case. Energy was not a commodity until the industrial revolution. If you want to say that you have your own personal conception of currency and a physics-ish notion of energy enters into that, go nuts. But as far as the actual history or common theoretical notions of money goes, it doesn't make much sense, because the concept of energy didn't exist and wasn't material to the creation of money.

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