There are two kinds of money. We earn Work money through sustained work, effort, selling something. For Work money to exist, some specific work must take place between two points in current time. Work money includes currencies like dollars, UK pounds, Euros, Japanese Yen, and of course, Bitcoin (BTC).
The other source of money is Fictive money. Yes, said out loud, it sounds a bit weird but please stay with me. “Fictive” almost sounds like a medical condition, yes? Even so, while you may not yet have heard about Fictive money, it has already affected your life.
I refer to Fictive money as fictional, imaginary, made-up. Fictive money is instant, so requires little work, effort, or time investment. Fictive money is both intoxicating and perilous.
Where Is Fictive Money?
Governments can create Fictive money in seconds on an electronic screen. Fictive money has other names too, like quantitative easing. The author in me prefers Fictive: it's closer to Fiction and seems more honest. The trillions in Covid-19 stimulus is Fictive money, that looks and feels like Work money.
Money is money, right? At first glance, yes. A deeper look, and No, there are huge yet differences.
The Benefits of Fictive Money
Fictive money fixes the big government spending problems of the day. Massive amounts get injected into financial balance sheets in the blink of an eye.
Debt removes options, savings add them.
– Morgan Housel, collaborativefund.com.
Fictive money offers short-term solutions to otherwise hard to fix political problems. So while Fictive money is popular, its true cost is not understood until later. By that time, politicians have retired or moved on so can evade responsibility.
The True Price of Fictive Money
Over time Fictive money costs much more than its face value. Fictive money has two powerful traits that work together at the same time:
- It's toxic like cancer and ...
- It spreads like a virus. Sound familiar?
- Fictive money's side target is to seek out and invest with or destroy Work money. How? First, at a slow pace, Fictive money “infects” and devalues Work money.
- Next, it assimilates and consumes Work money, while mixing into the world economy.
Those people who launch Fictive money know and understand its future effects. Populations love quick, neat answers and solutions. Yet, politics is the art of persuading a gullible, edgy, nervous populace. Fictive money works—for a while.
First Slow, Then All At Once
The first effects of Fictive money toxicity happen at a slow pace. Who notices stirrings, sour grumblings, when the sun is bright and times are good? Years can go by without much hint of the trouble to come.
Then out of the blue, all at once, one or more trigger reactions occur. Like a financial nuclear charge that erupts out of nowhere.
Shock and awe gets our attention. It creates political dithering one one end of the scale, and knee-jerk reactions on the other.
It's like a tsunami that once started can't stop until it has had its day and depleted its pent-up energy.
Fictive money has a cycle that starts with elation and political relief, then continues with pain. That's the true cost of Fictive money. But the story doesn't end there.
The Antidote to Fictive Money
There is an antidote to the economic effects of Fictive money: limited cryptocurrency. Sources like Bitcoin (BTC) and gold sit on the sidelines, waiting for time to catch up.
'Save more money and be more patient' is too simple for most people to take seriously, but it’s the best solution to most financial problems.
– Morgan Housel, collaborativefund.com.
BTC and gold are immune to the long term affects of Fictive money. Still, gold as a store of financial value may erode over time once space-gold mining starts. What happens when rockets rocket non-stop? Space asteroids, other planets, etc., are likely full of gold.
And gold is ... well tired. As a store of value, gold worked well in earlier times. When money was paper, shells, wheat, etc., gold made sense. Especially when much of the world was in conflict of one kind or another, gold could replace a currency.
Today the world is growing up. Times are changing. Nothing stays the same forever. Today we have electricity. While computer code is governing our world more and more, how many of us notice or even care?
Momentous Inventions Need Time For People To Catch Up
Now we're on the cusp of epoch-making changes yet so few realise what's happening. Before exploring, let's jump back.
It's December 17, 1903. The day Orville and Wilbur Wright prove the experts wrong. The Wright brothers showed that powered human flight was possible.
Such an epic event should have shook the world! Though some thought the first powered flight by humankind was a magician's trick. Most couldn't connect the dots from such a stunning achievement.
It took 4 years—4 long years—before anyone took much notice. Then, only when the American military showed interest did things “take off”.
Bitcoin BTC, Ethereum, blockchain, and more, is like that too.
In contrast to gold as a store of value, Bitcoin BTC has 21 million coins available. Several million are already lost for the foreseeable future.
Though, each Bitcoin BTC can be sub-divided into 100 million “bits”. The name of each “bit” is a satoshi. So each Bitcoin has 100,000,000 satoshis. Have some fun: multiply 21,000,000 by 100,000,000. I'll save you the time, it's a huge number: 2,100,000,000,000,000 units (bits). That's the power of Bitcoin waiting to unleash mainstream throughout the world.
Yet, Bitcoin (BTC) is now the rarest desired entity in the human universe. Few understand the implications of what that means.
Here's a little joke. While anyone with the know-how can copy the code that makes Bitcoin work, they must then rename their copy. At that point, their copy is no longer Bitcoin BTC, but a different invention. Read that again. I'll wait. At the point of conception, systemically, it's the same, but different. How the new invention fares depends on circumstance, belief, desire.
The Solution To Fictive Money
Fictive money is a problem. The solution is not to use it, or if already started, stop using it. Yet, not using Fictive money takes enormous often unpopular political courage.
When we're in deep, the Fictive money choice is between at least two pains. Few want either. The easier choice is to delay. And delay some more. Can we blame our leaders when they dip and dodge and duck, then kick the can (the problem) down the road for the next government to deal with?
Can you name any of the world's G20 leaders or political parties who have the nerve to:
- Stop creating Fictive money out of thin air?
- Stop quantitive easing?
No, me neither.
Most voters would hold such courageous politicians responsible for a raft of repercussions. Would they ever get reelected within a generation?
Fictive money is addictive. Once tasted, is easy to carry on. Keep on keeping on for long enough and you're in a hole too deep to climb out. Until that day dawns, the day you've been dreading: the day of reckoning. We can't dodge what's coming, only delay—for a while. Then face the monster, win the battle, and relearn old lessons.
So unfortunately, Fictive money will continue to thrive until the pain phase starts. Then it will be too late: the effects of Fictive money must play out before our re-learning takes place.
Cycles: How We Learn
It's a cycle. History is full of cycles:
- We humans get skilled little by little.
- We're not smart enough soon enough. So ...
- Then we have pain. That's when we start to learn pretty damn quick.
- Then the pain subsides.
- So we relax. We revel. We celebrate our heroes.
- We coast, bask in the sunshine of our lives.
- Then we forget.
- Then the pain returns.
- Then we relearn.
And repeat. Can we break that human story cycle?
Cycles: can't live with 'em; can't live without 'em.
The Big When?
No one knows when the next Fictive currency cannonade will go off. When it does, if you have a pulse, to a greater or lesser extent, you'll feel its impact.
Is there a small chance that our international monetary system gets rebooted? On a Sunday, say, debt forgiveness on a global scale. On Monday, we start again, from with zero debt, and this time, strive not to make the same mistakes. Though what happens without debt forgiveness? Let's imagine.
How Fictive Money Dies?
As soon as one or more governments “print” Fictive money, their currency starts to devalue. Is devaluation intentional? Yes of course. For a variety of reasons, Fictive money makes sense. Yes, when enjoying the pool party, and especially after a few drinks. But when sober, clear-headed ...?
Fictive money is powerful. For longer than expected, Fictive money overwhelms all instances of Work money.
Yet Fictive fiat currencies like dollars, euros, pounds, yen, etc., also have a cycle pattern. A paper currency devaluation path may take hundreds of years to complete. Our future sequence may follow something like below:
- Print more paper money (the longest period: alone can take a hundred years or more). We're at Stage 2—next, and beyond.
- Create digital copies of the paper money (e-commerce, credit cards, debit cards, etc).
- Keep devaluing the electronic currencies with more and more Fictive currency production.
- Create a central bank managed digital cryptocurrency. To track all activity, raise instant taxes, reduce transaction costs, and time delays.
- Remove physical cash notes, coins as they are no longer needed. At this stage, physical currency is a quaint historical curiosity. Yet, some instances of physical Fictive monies may have varying values as antiques.
- Continue devaluing cryptocurrency even further. Cryptocurrencies can be different. Bitcoin BTC is a rare smarter outlier. A central bank non-limited cryptocurrency is the digital equal of Fictive money. Infinite means valueless, in the end, when taken to its fullness over time.
- The great decoupling: when all forms of money are no longer linked to time and effort worked or sales made. This trend starts at central banks, if they even exist by then. Spreads to main street over time.
- Withdraw currency altogether. Currencies no longer have any meaningful value. The state meets all basic human needs through robotic and automated routines. We reach a time when people work only for specific motivations. To be creative or to further their goals or enrich their lives in other ways.
Through all the stages above, Bitcoin BTC keeps working, growing, self-sustaining. Who would have thought?
How Bitcoin BTC Emerges To Become The One True Interplanetary Money
When mass robotic production, artificial intelligence, and automated routines meet humanity's basic needs. Why then, would people still need Work money sources like Bitcoin BTC?
Eventually (perhaps sooner rather than later), all Bitcoin mining will come about through 100% renewable energy. Until then, Bitcoin and the environment will raise both concerns and interest.
Basic needs met means the end of poverty, scarcity, lack. Yet people want more than the least possible. We strive to create meaning for our lives, to excel, to go beyond, to look over the next hill and wonder what's there. That's the essence of being human.
Yet to go further than beyond our basic needs, we meet true costs. We would likely need to finance ourselves at such moments. And why not?
At this stage in our near-future, gold mining in space is now common, so its value as a rare commodity, a store of value, ends. As demand further increases, Bitcoin BTC keeps growing.
Yet limited, genuine scarce money sources like Bitcoin BTC meet our needs. To buy resources on demand. It's ready, always has been.
On Earth, many creative projects launch using Bitcoin BTC and blockchain resources. Off-world, entire space missions get financed through Bitcoin BTC transactions.
While we are not that far off, let's take our imaginary vehicle and land back to our time. For us today, we navigate through the coming choppy waters as best we can.
Hang in there. Get quiet. Strive to be like the Wright brothers: ignore the so-called “experts of the day” who bemoan Bitcoin. Instead, learn to spot the next “powered flight” effect early. It's not too late. We've only just begun.
Important reminder: all that you may read above is for information entertainment purposes. None of what you may read above or elsewhere on this website is investment advice. You could lose any or all money you may invest in Bitcoin. Do your own research. Never invest in anything what you cannot afford to lose.