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Money can be created from nothing. https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy https://www.b

Money can be created from nothing. https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy https://www.bankofengland.co.uk/-/media/boe/files/quarterly-...

chrisco255 6y ago
Yes, but there are consequences if it is overdone: https://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe https://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe
xiphias2 6y ago
I was specifically talking about money defined by the Austrian theory of money (buying power / store of value). Just because monetary units (currency) are created, it doesn't increase buying power of the total amount of the total amount of monetary units. For example if people buy houses from additionally created currency (even if it's debt), the buying power of one unit of that currency goes down, which can be seen by the number of required units needed to buy a house going up. The problem with banks is that they have a good reason to conflate unit of account with store of value: they make lots of profit on people not understanding the difference.
- dumbfoundded 6y ago
  Money is made up in all cases. It's an abstraction of relative demand. Even if governments abandoned fiat money, they could still pull money from thin air. Mostly because governments use violence to change the relative price of anything. If a government made owning a gold coin or a bitcoin a crime punishable by death, I think its buying power would go down. Similarly, by forcing citizens to pay taxes in a specified currency at the threat of jail time, a new currency is created. It's made up all the way down.
  - xiphias2 6y ago
    Sure, money is a man made belief, Yuval Noah Harari's books are great at explaining this :) Generally gold confiscation doesn't mean the purchasing power going down, just transfering it to the governments. It's still quite scary though, as I wouldn't be surprised if it happened again :( The scariest thing is if all the countries in the world try to ban gold and Bitcoin at the same time to preserve the fiat system. I'm hopeful that as Schnorr signatures will make coinjoins more practical, it will be easier to use as well, thereby making ownership of Bitcoins less visible to governments. Wasabi wallet is great at doing coinjoins, but when I tried it, it was just too slow.

chrisco255 6y ago

Yes, but there are consequences if it is overdone: https://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe https://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe

xiphias2 6y ago

I was specifically talking about money defined by the Austrian theory of money (buying power / store of value). Just because monetary units (currency) are created, it doesn't increase buying power of the total amount of the total amount of monetary units. For example if people buy houses from additionally created currency (even if it's debt), the buying power of one unit of that currency goes down, which can be seen by the number of required units needed to buy a house going up. The problem with banks is that they have a good reason to conflate unit of account with store of value: they make lots of profit on people not understanding the difference.

dumbfoundded 6y ago
Money is made up in all cases. It's an abstraction of relative demand. Even if governments abandoned fiat money, they could still pull money from thin air. Mostly because governments use violence to change the relative price of anything. If a government made owning a gold coin or a bitcoin a crime punishable by death, I think its buying power would go down. Similarly, by forcing citizens to pay taxes in a specified currency at the threat of jail time, a new currency is created. It's made up all the way down.
- xiphias2 6y ago
  Sure, money is a man made belief, Yuval Noah Harari's books are great at explaining this :) Generally gold confiscation doesn't mean the purchasing power going down, just transfering it to the governments. It's still quite scary though, as I wouldn't be surprised if it happened again :( The scariest thing is if all the countries in the world try to ban gold and Bitcoin at the same time to preserve the fiat system. I'm hopeful that as Schnorr signatures will make coinjoins more practical, it will be easier to use as well, thereby making ownership of Bitcoins less visible to governments. Wasabi wallet is great at doing coinjoins, but when I tried it, it was just too slow.