Welcome to the \u201cMuseum of the Future\u201d. Here, broken money is a thing of the\u00a0past.<\/p>\n
If sound money<\/em> crystallises your blood, sweat, and tears into a claim with the implied promise that it can be exchanged for future value of your choosing, whenever and however you decide\u200a\u2014\u200awhat is broken\u00a0money<\/em>?<\/p>\n At a surface level, we all recognise money as a medium of exchange\u200a\u2014\u200aa universal good acquired not for consumption itself, but to be exchanged for other goods of our choosing, at a time we\u00a0prefer.<\/p>\n It\u2019s so ubiquitous in our lives that we rarely stop to question its true nature. But if we dig a little deeper, money can be boiled down to something rather interesting: crystallised time and\u00a0effort.<\/strong><\/p>\n Think about\u00a0it.<\/strong><\/p>\n You go to work, expending energy and applying skills to create something valuable for your employer. In return, you\u2019re compensated with money\u200a\u2014\u200ayour salary. That salary is not just a number; it\u2019s a representation<\/em> of the time and effort you\u2019ve dedicated, granting you a pre-determined claim on goods and services in the broader\u00a0economy.<\/p>\n In a fair system, money operates as a straightforward tool. The worker earn it by contributing value, pay taxes as part of the social contract, and retain the freedom to save or spend their earnings as they see\u00a0fit.<\/p>\n If someone wants to buy a bucket of flowers, for example, they\u2019ll head to a florist and use their money to agree on a fair exchange rate. The florist, in turn, has spent their time and effort growing those flowers and sells them for money, much like the buyer earned their salary through work. This exchange is a simple and equitable trade, where value flows between participants based on mutual\u00a0benefit.<\/p>\n For the purchaser to agree to buy the flowers, they must, by definition, value the flowers more than the money they\u2019re giving up. Conversely, for the florist to sell their flowers, they must value the money more than the\u00a0flowers.<\/p>\n The mechanics of an exchange like this work because both parties assign subjective value to the items, based on their individual needs and preferences. The result is a win-win situation where both sides walk away better off than they were\u00a0before.<\/p>\n This is how money is supposed to function:<\/strong> facilitating voluntary, positive-sum peer-to-peer interactions where effort and value are fairly\u00a0traded.<\/p>\n But this ideal scenario is not the reality we live in\u200a\u2014\u200aunfortunately, it\u2019s not even\u00a0close.<\/p>\n If money were sound\u200a\u2014\u200ameaning the monetary base or the number of monetary units was fixed\u200a\u2014\u200amoney would function like described above and the only way to crystallise your time and effort into more money for your own use would be to, as in the case of the florist or the worker, offer something of value that others would voluntarily exchange for\u00a0money.<\/p>\n However, this is NOT<\/strong> the type of money we have today. Instead, we operate with broken money<\/em>\u200a\u2014\u200aso-called fiat money\u200a\u2014\u200awhich can be printed at will by governments and banks, following rules set by those in\u00a0power.<\/p>\n This system introduces a systemic distortion called monetary inflation<\/strong>.<\/p>\n To understand the impact of this distortion, imagine you\u2019re a worker who has just received your monthly salary\u200a\u2014\u200athe result of the time and sweat you\u2019ve invested in your job. For simplicity, let\u2019s say your salary represents one-millionth of all the money currently in existence. By definition, this money then represents a claim on one-millionth of all goods and services available in the economy.\u00a0*<\/p>\n Instead of buying the flowers, the employee in this case decides to save their earnings. However, while the money sits in their account, the government and banks double the monetary base, increasing the total amount of money in circulation from 1 million to 2\u00a0million.<\/p>\n In the future, a money printing machine is on\u00a0display.<\/p>\n By doing so, they haven\u2019t created any additional real value\u200a\u2014\u200ano more flowers have been grown or goods produced. What they have effectively done is siphon away 50% of the employee\u2019s crystallised time and effort. The worker\u2019s claim, which was originally one-millionth of all goods and services, has now been diluted to only one two-millionth, cutting its purchasing power in\u00a0half.<\/p>\n So, where did 50% of the value of this employee\u2019s savings go, you may\u00a0ask?<\/strong><\/p>\n It was redistributed\u200a\u2014\u200aat the discretion of the government and, by extension, the banks. This value might have been used to justify the financing of someone else\u2019s mortgage, boost the next dividend payout for a large corporation, or fund a government program that wouldn\u2019t have needed funding in the first place if not for the constant erosion of wages (more on this\u00a0later).<\/p>\n The policies of today\u2019s dominant economies view this redistribution as a positive because it \u201cstimulates the economy,\u201d supposedly for the greater benefit of everyone.<\/p>\n But what does \u201cstimulating the economy\u201d through money printing actually aim to\u00a0achieve?<\/p>\n It specifically aims to create conditions where people are pressured to spend (or reinvest) rather than save. If you know your savings will lose half their value within a certain period, your logical response is to spend the money before it evaporates. While this might increase short-term consumption (as if that were inherently beneficial) and inflate \u201cgrowth\u201d figures on paper, it often leads to people buying things they don\u2019t truly need. In turn, companies produce goods and services that cater to artificial demand rather than genuine needs and long-term value.<\/p>\n * Money is ultimately a common-pool resource, representing a <\/em>future<\/em><\/strong> claim on goods and services. Its value is partially determined by its acceptability to others, and the claim inherently carries uncertainty, as it is shaped by unpredictable future conditions, evolving needs, and supply-side dynamics (independent of monetary inflation).<\/em><\/p>\n For those determined to save the purchasing power of their broken money, there are some pragmatic but limited options. One of the few viable alternatives in liberal democracies\u200a\u2014\u200athough far from available everywhere\u200a\u2014\u200ais to purchase assets with a fixed supply that are themselves likely to be inflated in price with the printing of more\u00a0money.<\/p>\n The most common choice is real estate<\/strong>, particularly in areas with steady demand and geographically fixed supply, as it often serves as a reliable store of value for those seeking to preserve their wealth. However, this creates a significant issue: real estate becomes prohibitively expensive for many people. When property is used primarily as a savings vehicle, prices are inflated, pushing the entry-level cost of ownership beyond the reach of most individuals.<\/p>\n \u201cWhen broken money failed to preserve its value, housing prices soared as properties were increasingly used as stores of value\u201d, as highlighted by the \u201cMonetary Premium\u201d label in the\u00a0museum.<\/p>\n Furthermore, real estate as a store of value requires robust property rights, which explains its limited use outside stable democracies. While often preferable to cash for preserving wealth, real estate is still subject to inflationary forces, with e.g. property taxes acting as a persistent drain on value, similar to the pressures of monetary inflation.<\/p>\n Another alternative for preserving savings is investing in index funds, such as the S&P 500, which represents a fixed selection of the largest 500 companies in the U.S. While investing in these funds require no significant entry-level cost for most people in liberal democracies with access to banking systems, they come with their own set of systemic consequences\u200a\u2014\u200achief among them being the fact that they effectively force everyone to become an investor.<\/p>\n The primary issue with this is that it perpetuates a cycle of artificially monetising the largest companies<\/strong>.<\/p>\n What does this\u00a0mean?<\/p>\n Let me explain.<\/strong> It\u2019s one thing to voluntarily choose to invest your money\u200a\u2014\u200ayour crystallised time and effort\u200a\u2014\u200ainto a company because you believe in its business model and are willing to take on the risks associated with being wrong for the potential upside. But it\u2019s an entirely different matter when you are compelled, out of desperation to avoid the erosion of your savings, to take on investment risk in companies you may not support, simply as the lesser of two\u00a0evils.<\/p>\n Monetary inflation has moved finance from the periphery to the center of the economy\u200a\u2014\u200abut it doesn\u2019t have to be that way in the\u00a0future.<\/p>\n This dynamic is problematic because it perpetuates a loop that disproportionately benefits large, dominant players\u200a\u2014\u200aat the expense of undermining a diverse and dynamic free market. These dominant players, simply by virtue of being included in major indexes, receive a constant influx of capital from savers looking to preserve their money. This influx boosts their stock prices, enhancing their creditworthiness and granting them access to the cheapest bank\u00a0loans.<\/p>\n What\u2019s the\u00a0result?<\/strong><\/p>\n The issuance of these loans further dilutes the purchasing power of workers\u2019 savings, leaving them with two unappealing options: spend their money\u200a\u2014\u200awhere it inevitably flows back to these corporations anyway\u200a\u2014\u200aor reinvest it in index funds, which further inflates stock prices and reinforces the monetisation of these entities.<\/p>\n With their growing financial clout, these corporations can exert greater influence over political decisions, often shaping policies in their favor. This dominance, combined with the desperation many workers feel to secure a job, grants them an unfair advantage to push for lower wages and weaker worker rights, further solidifying their\u00a0control.<\/p>\n As a result, this system drives increasing centralisation, concentrating power in the hands of a few and creating a top-down economic structure.<\/p>\n Once we understand the measures one must take to preserve one\u2019s broken money from erosion due to monetary inflation, it becomes clear why the supposed benefits of \u201cstimulating the economy\u201d\u200a\u2014\u200asuch as boosting company financing, creating more jobs, or funding government programs\u200a\u2014\u200aultimately fail to achieve their stated objectives.<\/p>\n While recipients of new money, such as those benefiting from government programs, may experience short-term relief, the long-term beneficiaries of monetary expansion are those who are already wealthy. This happens, as demonstrated, because new money inevitably flows to them, either through increased consumption or the monetisation of their\u00a0stocks.<\/p>\n Over time, the wealthy grow wealthier, while the majority become increasingly dependent on employers and governments\u200a\u2014\u200aa dynamic that ultimately harms everyone.<\/p>\n A healthy economy thrives when participants interact on an equal playing field\u200a\u2014\u200awhere employees negotiate salaries or apply for jobs not out of desperation to pay bills, but because the opportunities align with their interests and passions.<\/p>\n Instead, this growing dependency fuels a cycle of short-term fixes funded by additional money printing, which continues to funnel wealth upward. As both salaries and savings are steadily eroded, the system demands ever-larger government programs to manage the resulting socioeconomic strain\u200a\u2014\u200aprograms that, ironically, many times wouldn\u2019t have been necessary in the first place if not for inflation itself.<\/p>\n Various historical boom-and-bust cycles are on display in the \u201cMuseum of the\u00a0Future\u201d.<\/p>\n The end result is an interconnected ecosystem where people are increasingly pressured to take on meaningless jobs, producing goods and services that few genuinely need or want. The incentive to spend before money loses value drives consumer culture, prompting individuals to continually purchase unnecessary products. This, in turn, pushes companies to produce even more goods of questionable value, reinforcing cycles of inefficiency, waste, and overconsumption.<\/p>\n The means (money printing) serve the ends (consolidating wealth and power), entrenching everyone further into the system. With each iteration, it demands ever-greater resources, production, and consumption\u200a\u2014\u200aperfectly reflecting an economic model that prioritises endless expansion over sustainability.<\/p>\n The instinctive reaction for many, upon understanding the effects of this systemic flaw, is to propose a centralised fix. By centralised, we mean solutions suggested and forcefully implemented by a single authority\u200a\u2014\u200atypically the government.<\/p>\n It\u2019s easy to identify a problem and propose a centralised intervention. Tax this. Ban that. Subsidise something else. It\u2019s much harder to come up with a decentralised solution because it requires getting to the root of what\u2019s truly causing the\u00a0issue.<\/p>\n At the core of the issue is our broken money<\/em>\u200a\u2014\u200aplain and simple. Broken money distorts incentives, rewarding the wrong behaviours that then shape flawed corporate and societal cultures. Unless we fix the foundation of the economy\u2014 by transitioning to sound money\u200a\u2014\u200athe destructive cycles will only grow stronger.<\/p>\n With sound money, the playing field in the economy would finally be levelled. People would no longer be forced to funnel their savings into large corporations or speculative assets just to preserve the value of their hard-earned money. Instead, individuals would have true freedom to decide whether to spend now or save for the future, in whatever proportion they deem\u00a0fit.<\/p>\n Investing in a company would become a voluntary act<\/strong>, driven by belief in the company\u2019s mission and a willingness to take on the associated risks. This would restore meaning to the act of investing, as individuals would deploy their time and effort, represented by their money, into visions they align\u00a0with.<\/p>\n But it goes further than this.<\/strong> Sound money would also remove the forced monetisation of the equity market, which currently perpetuates cycles biased toward consolidation rather than diversity. This process not only stifles innovation but also poses an existential threat to the free market itself by undermining its core\u00a0pillars.<\/p>\n In other words, by restoring sound money, we wouldn\u2019t just fix individual incentives; we\u2019d also democratise the equity markets for the greater benefit of everyone.<\/p>\n In a system free from inflationary pressures, people naturally allocate their resources toward goods and services that provide more marginal value. This shift reorients the economy from one driven by artificially stimulated consumption to one rooted in what truly matters: solving real problems and improving lives.<\/strong><\/p>\n With sound money (BTC), purchasing power increases over time. Infograph by Anil\u00a0Saidso<\/a>.<\/p>\n Our current inflationary system actively resists these benefits. By replacing broken money with sound money\u200a\u2014\u200amoney that cannot be arbitrarily expanded\u200a\u2014\u200awe can lay the foundation for an economy that finally embraces the natural deflationary force of progress. In such a system, those who save their earnings or invest wisely in long-term value creation stand to benefit the most, as the appreciating purchasing power of sound money naturally rewards that behavior.<\/p>\n This, ultimately, creates an economy where increases in productivity are distributed equitably to all participants in the form of continually falling\u00a0prices.<\/p>\n The intro of this article asked: <\/strong>If sound money represents the crystallisation of time and effort into a claim, with the implied promise of being exchangeable for value at the discretion of whomever earned it, at the time of their choosing, what is broken\u00a0money<\/em>?<\/p>\n Broken money, then, is the betrayal of that promise. It represents the crystallisation of time and effort into a claim for value, not for the benefit of those who earned it, but for those with the most power and control\u200a\u2014\u200ato be used at their<\/em> discretion to consolidate even more of\u00a0both.<\/p>\n In this sense, broken money can be thought of as the \u201cshadow of money\u201d\u2014 it carries the contours and illusion of value but lacks the substance. It\u2019s like a counterfeit ticket to a concert sold to a thousand others; only the one who arrives first will be admitted, while the rest are left outside, holding nothing but an empty\u00a0promise.<\/p>\n What kind of money do you\u00a0choose?<\/p>\n If you\u2019re not actively making the choice, someone else has been making it for\u00a0you.<\/p>\n \u201cChancellor on brink of second bailout for banks\u201d\u200a\u2014\u200aSatoshi\u00a0Nakamoto<\/p>\n What is Broken Money?<\/a> was originally published in Coinmonks<\/a> on Medium, where people are continuing the conversation by highlighting and responding to this story.<\/p>","protected":false},"excerpt":{"rendered":" The hidden truth about the type of money that steals your blood, sweat, and tears and gives it away for\u00a0free Welcome to the \u201cMuseum of the Future\u201d. Here, broken money is a thing of the\u00a0past. If sound money crystallises your blood, sweat, and tears into a claim with the implied promise that it can be […]<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-23926","post","type-post","status-publish","format-standard","hentry","category-interesting"],"_links":{"self":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/23926"}],"collection":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=23926"}],"version-history":[{"count":0,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/23926\/revisions"}],"wp:attachment":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=23926"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=23926"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=23926"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}The Glitch: Monetary Inflation<\/h3>\n
Is There an Efficient Way to\u00a0Save?<\/h3>\n
Real estate<\/h4>\n
Stock market<\/h4>\n
Debt Cycles<\/h3>\n
Addressing the Root Cause, Not the\u00a0Symptom<\/h3>\n
The Natural State of an Equitable Market is Deflation<\/h3>\n
What is Broken\u00a0Money?<\/h3>\n