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Bitcoin Mag Asks: What is Your Relationship to Money?
Bitcoin Magazine regularly puts out good, deep-think pieces about the nature of currency, and this one is no different. The question is far more involved than just “Do you manage your money well?” and more along the lines of “What exactly is money?”
One of our founders explored this question in a must-read essay four years ago, and we think this piece from Bitcoin Magazine complements what he wrote.
I’m sure most readers have never thought deeply about their relationship to money. Those raised with a scarcity mindset will never have enough. This is usually learned from parents and family at a very young age. It is also reinforced by fiat. If you are losing 7.7% of your purchasing power every year, you are likely to foment a mindset of scarcity. Those raised with or those who cultivated an abundance mindset were programmed differently. Either way, your mindset around and about money is ultimately a choice; you can alter or rewrite the program. For some people, this is easy. For others, it’s nearly impossible. And there are people who have plenty of money, but still aren’t happy.
In our modern world, there are many who believe that money is essential to life. There are some who go overboard and idolize money. They worship making it and they worship the people who make lots of it. If you have or earn ample amounts of money, count your blessings. A man or woman who has few needs lives more freely and abundantly than the rest.
Most of us have a special — often invisible or unexamined — relationship to money. For some, it gives them their whole reason for being in this world, while for others it’s a means to an end. As we observe events like Prime Minister Justin Trudeau’s freezing of Canadian truckers’ bank accounts or Biden’s theft of Russian reserves, we start to realize some chilling realities about the nature of money. If you don’t have physical possession of the monetary asset, all you have is an IOU, and that IOU is very tenuous if the ruling authorities decide your words or actions don’t comport with their worldview. Usually, the IOU is from the bank or credit union where you have deposited “your” money. The only thing is: It’s not “your” money once it’s deposited into the bank.
Bitcoiners are fond of saying, “Not your keys, not your coins.” What many people who aren’t Bitcoiners don’t stop to consider is that the money in their bank account isn’t really theirs. Zoltan Pozsar, global head of short-term interest rate strategy at Credit Suisse, makes the case that we’ve entered a new era of Bretton Woods III, which involves inside money and outside money and claims that commodities will underlie international monetary affairs. Inside money is money which has a middleman, such as a bank. All the money that you hold is essentially an IOU. Outside money is money that is outside of the banking system. It cannot be taken from you through denying you access to an account, nor can they inflate it away.
Money you earn for the work you do is proof of work. If you’re fortunate, you earn more than you need for everyday living. In the paper money era, that meant you traded your precious time, labor and life energy for green paper strips and little metal disks. Today you trade your precious time, labor and life energy for pixels on a computer screen. When viewed through that lens, one begins to realize that money is just a symbol. If all we have is an IOU with a bank, all kinds of mischief is possible from governments and banks. This may include bailouts, bail-ins and outright theft. This is deeply troubling. Our reliance on state-issued currencies means our wealth can be confiscated with a keystroke or the stroke of a pen.
The whole article is worth the time to read.