Topic: What Money System Worked? (Read 388 times)

The closest that worked were precious metal based coins. Not bank notes with the promise of the precious metals, but when the coins were actually made from the very precious metals.

In other words, things like gold and silver. Because no matter what is engraved in them, you could always melt them.

But the physical realm is not immune to scam. Suppose you have 100 gram coins, someone could start "chipping" them so they each lose 1 gr, after chipping 100 coins you get 1 "free" coin right? actually you just stole that from others. Sometimes they add back the lost gram but using a cheaper metal, and sometimes the practice was done by the State. Indeed in the Roman empire it was done that way

This cannot be done in the digital world, not with something as secure as bitcoin, where every little satoshi is accounted for. With physical coins you would have to carefully check each coin, this is unscalable and unpractical. If if you get a "certificate", you its different than trusting a bank "to keep it stored...". You trust whoever certified it, and besides the physical good could always be tampered with after certification.

Therefore Bitcoin is more secure than gold.

But in the event that you have an artificially honest society that would absolutely never tamper with your gold coins, then yes.

Gold production is not controlled by the government and is worldwide recognized (by weight). Your country might collapse and the gold keeps its purchasing power, unlike fiat. But its physical, it can be found, seized, tampered... keeping it protected costs money, and its heavy too!

As for successful monetary systems, the key difference is removing the government from the equation. You could look at countries that use another country money without their permission (such as many countries using the USD). In those they moved their local control to foreign control, but the risk is too high, should the USD collapse they would collapse too. But until that happens, they in their territory can experience handling a money their own local politicians can't manipulate. If their budget doesn't fit, they cannot print more to cover it, they have to reduce expenses etc (transparency).

Pegging doesn't work because its a promise they almost always break, because they can. That is the point, CAN or CANNOT do. CAN your gov. make you poor overnight or not?

I know this is not exactly in relation to Bitcoin. I may be in the wrong forum.
Considering with all the failures of the money systems in the past. That only benefit the government and wealthy.
I know there were systems that did benefit the people. At least were more systems that offered a fairer playing field. I know those systems did get shot down by the "powers that be"

What systems, would you all know of, that did work or could have worked better in the past? More less the non digital era of anything more less?

Unfortunately the gold standard requires you to trust the State to keep its promise, that each dollar was backed in gold. How exactly can you ever know? This is a mix of pegging and fractional reserve. Its not like people could actually get the gold the banknotes promised, they had to trust their government to be doing the right thing.

With physical gold/silver at least the real thing is in your hands. This was the closest you could ever get to trustless money accepted anywhere (could always melt it).

A paper with a signature is a promise someone has to fulfill. And the "cheap metal" coins were simply tokens for the same.

The closest that worked were precious metal based coins. Not bank notes with the promise of the precious metals, but when the coins were actually made from the very precious metals.

In other words, things like gold and silver. Because no matter what is engraved in them, you could always melt them.

But the physical realm is not immune to scam. Suppose you have 100 gram coins, someone could start "chipping" them so they each lose 1 gr, after chipping 100 coins you get 1 "free" coin right? actually you just stole that from others. Sometimes they add back the lost gram but using a cheaper metal, and sometimes the practice was done by the State. Indeed in the Roman empire it was done that way

This cannot be done in the digital world, not with something as secure as bitcoin, where every little satoshi is accounted for. With physical coins you would have to carefully check each coin, this is unscalable and unpractical. If if you get a "certificate", you its different than trusting a bank "to keep it stored...". You trust whoever certified it, and besides the physical good could always be tampered with after certification.

Therefore Bitcoin is more secure than gold.

But in the event that you have an artificially honest society that would absolutely never tamper with your gold coins, then yes.

Gold production is not controlled by the government and is worldwide recognized (by weight). Your country might collapse and the gold keeps its purchasing power, unlike fiat. But its physical, it can be found, seized, tampered... keeping it protected costs money, and its heavy too!

As for successful monetary systems, the key difference is removing the government from the equation. You could look at countries that use another country money without their permission (such as many countries using the USD). In those they moved their local control to foreign control, but the risk is too high, should the USD collapse they would collapse too. But until that happens, they in their territory can experience handling a money their own local politicians can't manipulate. If their budget doesn't fit, they cannot print more to cover it, they have to reduce expenses etc (transparency).

Pegging doesn't work because its a promise they almost always break, because they can. That is the point, CAN or CANNOT do. CAN your gov. make you poor overnight or not?

In the vastest history of the Philippines, there are trading with other countries that near our country and that country will be with China, Cambodia, Borneo, India, Siam, and Japan, etc. and that trading system was using beads instead of golds, silver, and coins and I think back then there were no Government to control that policy in trading and buying of products and the manila was the center of commerce in the east after the Spaniards had occupied the country and the Galleon Trade was born due to the Government Monopoly and close all relation of trading except Mexico!

I really think that trading back then was successful if not controlled by someone and the trust in every country was there, so I think that the trading system successful back then.

Anyway, I'm going to talk about trade by barter because this could be the area you think or other people think too that favoured the masses. But trade by barter involves also be rich and wealthy in material, farm produce and landed properties to be able to exchange as much as you want or to have adequate purchasing power.
Further, during trade by barter, your ability to acquire more gives you an edge, therefore we also had people who were far above others in material wealth and otherwise including slavery or feudal system. So, I don't think trade by barter would be considered favourable.

My view is even that this digital age is working more and beneficial to almost everybody if you have a little knowledge or education to do just very little task from the computer, android or smart phones, ATM etc. I'm sure the level of education both formal lately is increasing, so many more people are having the opportunity to make money including digital, cryptocurrency, forex etc.

The gold standard was the closest we've been to a healthy functioning monetary system.

Anyway, I'm going to talk about trade by barter because this could be the area you think or other people think too that favoured the masses. But trade by barter involves also be rich and wealthy in material, farm produce and landed properties to be able to exchange as much as you want or to have adequate purchasing power.
Further, during trade by barter, your ability to acquire more gives you an edge, therefore we also had people who were far above others in material wealth and otherwise including slavery or feudal system. So, I don't think trade by barter would be considered favourable.

My view is even that this digital age is working more and beneficial to almost everybody if you have a little knowledge or education to do just very little task from the computer, android or smart phones, ATM etc. I'm sure the level of education both formal lately is increasing, so many more people are having the opportunity to make money including digital, cryptocurrency, forex etc.

i don't expect QC to break bitcoin tomorrow, but i also think depending on current extrapolations of quantum computing progress is illogical. we fundamentally cannot know if/when huge technological leaps will occur in this field. even if we ignore that fact, reasonable extrapolations say ECDSA will be broken during the current decade. https://medium.com/@nopara73/stealing-satoshis-bitcoins-cc4d57919a2b

even if these threats are purely theoretical, they are threats that could never apply to the security of gold. that's the point i was making above.

technical sidenote. dont worry about quantum
it will never break ecdsa by tomorrow. it will just reduce brute forcing to be from millions of years to thousands of years.

I know this is not exactly in relation to Bitcoin. I may be in the wrong forum.
Considering with all the failures of the money systems in the past. That only benefit the government and wealthy.
I know there were systems that did benefit the people. At least were more systems that offered a fairer playing field. I know those systems did get shot down by the "powers that be"

What systems, would you all know of, that did work or could have worked better in the past? More less the non digital era of anything more less?

in the sense of counterfeiting, yes. there are other considerations, however. for example, if quantum computers were to break ECDSA tomorrow, it would irreparably harm bitcoin. gold is not vulnerable to such cryptographic vulnerabilities nor power grid/internet failures. in those senses, gold is more secure.

in the end, bitcoin may have superior monetary properties and potential utility, but i believe both will stand side by side as store-of-value assets in the future.