TL;DR Money is Backed by Faith & Belief

Money's value is not a number. It's value is in how we come to an understanding of it.

The financial world has changed significantly over the last 18 months. Not because of COVID or supply chains but because the average person is waking up. They are beginning to ask…

source: https://whatismoneyproject.com/

What is money?

My personal journey on the topic began as a 7-year-old when I would find IOU sticky notes in my stash of cash from time to time. I kept a money box in my drawer and my family knew where it was. Not all that different than my dad’s jars of change we use to raid. PS… there were no IOUs in that case.

Effectively, these were early and unknown lessons of how the FED operates.

Except, I was the lender of last resort to my parents when they needed dollar bills but didn’t have them on hand. In the pre-ATM days getting money from the bank wasn’t a quick and dirty task. So leaving an IOU for your 7-year-old was an ATM in the making :)

A couple of decades later I entered the financial services world only to get a front-row seat for the Great Financial Crisis (GFC) arguably equally as confusing and as bad as the Great Depression. Glued to a Bloomberg and scouring research for stocks, bonds, and options, I learned a ton.

Most valuable was learning to define and understand risk during one of the most volatile times in financial history. This was far better than any lesson I could have received from an MBA program at that time.

How it Started

The greatest part of failure and losing money is the learning that stems from it. The school of hard knocks is a great teacher. When combined with curiosity it teaches great lessons about what money is.

During the years between 2007 and 2012, globally, a lot of money was lost and one could easily argue that the rise of populism stems from the lessons learned by the average individual in this window in time.

The daily grind of being sideswiped by headlines and unexpected events lead me to research in a deeper manner the Great Depression, Volatility, how the FED works, the role of China’s build-out of a US mimicked financial system, Credit Default Swaps (CDS) and derivatives exposure, and how that all played into bank balance sheets and large fund holdings.

The outcome was a very changed view on what money was. It no longer was a thing, but an understanding. In a system that was more or less a balance of payables vs receivable… effectively just lines of credits… was money anything other than faith and belief?

So, the burning question became, “What is money?” What started as a question turned into a realization that we were seeing a drastic change of the unit of money because of the rapid rate of adoption of technology.

This change was similar to that of the industrial revolution in terms of the way commerce and society worked, and it would have seismic shifts in the way our financial ecosystem would work. These changes, in my view, would have ripples with impacts that last decades.

In the last decade, we’ve seen battles fought in a similar fashion to what was seen almost 80 - 100 years prior, but more specifically as Ray Dalio astutely lays out, most similar to what transpired between the years of 1933 to 1945.

These battles were taking place globally and on many fronts. Economically, Geopolitically, and in Cyberspace… specifically with attacks happening among Nation-States and now amongst global supply chains.

Years in the Making and Where it Led

From 2006 to now, my interest in these topics has grown and died, morphed and gone silent, but overall they’ve progressed usually within the bounds of my own head and a few rants that those around me have to listen to.

Like many, I passed on Bitcoin the first go. Taking the traditional financial view will easily lead you late to the Crypto party. But as my personal narratives grew and my realizations took shape, I began to understand that the answer to my question of, “What is money?”; was that it wasn’t a thing but a belief.

With this, came an understanding that many narratives and woke agendas are nothing more than that. They are just beliefs that can be right and can be wrong but are mostly concocted and driven by worldly desires.

A year or so into the crypto rabbit hole many opinions began to reframe for me, specifically what it means to be a millennial… hint… it’s not a generation. It’s an ideal. And, that led to what would be drastic changes likely to come due to the shifting desires of a growing swath of people globally.

This in turn led to a deep dive into the history of civilizations, money, and the value of the dollar.

Foundations Help Us Understand What Money Is

Without a solid foundation, we can do very little. Money without a solid foundation can do very little. Today’s money has very little in the way of a foundation. We are seeing that money increasingly, in an exponential manner, does very little.

If it takes more work, to acquire more capital (money), to be able to provide for less of our basic daily needs, then there is a fundamental problem with the way our money is designed.

The reality is over the last handful of years, we find ourselves in this awkward state. But, we didn’t just magically get here.

Ross Stephens, CEO of Stoneridge Holdings Group and Executive Chairman of NYDIG, succinctly summed up many of my views in an interview this past May. He absolutely nails it.

As they say… Bitcoin fixes this.

We got here because of the laws of man and a drastic oversight of the laws of The Kingdom. We got here because the laws of money are not appropriately being applied.

While in the long run Bitcoin may ultimately turn out to be just another form of money. One that isn’t all that different from what we’ve seen during the rise and fall of prior civilizations.

However, it currently offers a foundation that is missing in our current form of money. It offers faith and belief that is missing and it is enforced by code that is much more aligned with the laws of The Kingdom than the laws of man.

The Bitcoin Standard is one that is much closer to the rules we should seek live by, than what we’ve seen transpire in recent years. It’s a standard that is better for most and not just a few.

Money is Tied to Human Time

Per Ross’ profound and simple explanation…

Money is technology for taking our wealth today and making it available for consumption tomorrow… The reality is money is just a good. It’s just a good, like any other good. Except. What makes money as a good unique is that we value money… soley for it’s perspective exhange utility… Can we take the money and trade it in the future for stuff we actually want. No one wants green little pieces of paper… No one wants Bitcoin…. We want what the money can do for us in the future…

The reality is the most important trades we make is the one’s we make with our future selves… We all have a Darwinian propulsion… towards holding the soundest money possible…

We sacrifice our time for money and the reason we do that is because we want to trade that that time for the time sacrifices of others.

So, when the Fed creates $3 Trillion dollars of money in a matter of weeks by pushing a button, it consolidates the power to price and value human time. That is not okay. Humans are not supposed to have that kind of power over other humans. Time is all we have…

On the views of the Central Banks

We’re all products of our backgrounds. Of our of education. Of our schools of thought that we followed. If those schools of thought lead us to success then it reinforces in our mind that those schools of thought are correct, even if they are not.

In a time of great transition, a beginner’s mind is prized… With all respect to the Central Bankers, I spoke to… the lack of open-mindedness was breathtaking.

A beginner’s mind, it seeks out the why with the intention of discovery. It’s not trying to defend a prior reality. It’s not trying to defend a mental model that’s been created. We’re in a time of great transition.

Coming Full Circle

In a condensed manner, but also in long-form, this is how I personally arrived at the understanding of the true value of money.

It also has helped me understand that what the masses are truly asking. Today, like in the 1930’s or in the late 300’s in Ancient Rome, the masses are beginning to ask “What is Money?”

I believe that many, because of the broken nature of their prior mental models, are beginning to understand that money has no value, other than what you can exchange each unit for, and if you can’t exchange your time for enough money to put food on the table, then is it worth your time to go work? Is it worth your time to provide for someone else to increase their lifestyle or position in hierarchy only to lay you off when their margins get stretched?

This question is one that’s likely being asked by the 4.3 million who have just disappeared from the workforce in the US. Man and Woman were designed to work. Designed to be productive and to create great things. They were not designed to be taken advantage of by worldly profit motives, money, and potions.

Through the chaos and price appreciation of Bitcoin, individuals are finding that it’s more valuable and worth their time to seek answers and understanding. It’s more valuable for their money to appreciate rather than depreciate. They are learning, one by one. Some fast, some slow. But we are learning that for a thing to be worth trading for, to have value, it must be something that makes your life better in the future, not in the now.