The Invention of Money

[samurai1200]

I've been catching up on past episodes of This American Life (awesome show/podcast).

One that I came across was Episode 423: The Invention of Money --

http://www.thisamericanlife.org/radio-archives/episode/423/the-invention-of-money

mp3 link: http://audio.thisamericanlife.org/jomamashouse/ismymamashouse/423.mp3

Though they don't cover cryptocurrencies in particular, this episode has convinced me that something like Bitcoin has the potential to be more real than the fiat currencies we normally consider as "real money."

Here's a short description of what they discussed. I highly recommend you listen to the whole thing though, its incredibly interesting and insightful:

Prologue: On the island of Yap, their form of currency were large, carved limestone blocks. They were used for large payments, like for when a tribe needed to recover a fallen warrior from an enemy tribe. The blocks were so large they were impractical to move. Furthermore, the stone they were carved from was from a far-away place, not on the island (establishing rarity). On a trip back from carving, the boat carrying the newly minted coin encountered rough sees and dumped the stone. The people on the island believed in the shipper's work and accepted the coin still, even though it lied on the bottom of the ocean. It made me think... that's kinda like the first virtual currency -- nobody could see it yet they still believed in its existence and therefore value.

Act One talks about Brazil's problem with inflation (which IIRC was 80% a week at one point?) and how some scholars came in and stabilized the currency by relating it to a new, literally virtual currency. Once stabilized, the virtual currency became the new currency. Now Brazil enjoys zero inflation.

Act Two talks about the United States' central bank, the Federal Reserve. They discuss the creation of new money, which is actually virtual, and market manipulation. I learned about a new term too: Fed Crazytown, which is where they went after the financial collapse in 2008.

Hope you enjoy!

[1714776124]

1714776124

[notbrain]

I second this, I recall listening about the Brazilian Real and how they made people believe in it again. Kind of funny how the word "believe" has "be lie" in it. We all come together and agree to "make be a lie".

We're making it all up.

I also recommend Neal Stephenson's Cryptonomicon and The Baroque Cycle trilogy (Quicksilver, The Confusion, and The System of The World). A recurring theme is the invention of money and the roots of the financial system we have today.

http://en.wikipedia.org/wiki/Cryptonomicon

http://en.wikipedia.org/wiki/The_Baroque_Cycle

Neal Stephenson was inspired to write The Baroque Cycle when, while working on Cryptonomicon, he encountered a statement by George Dyson in Darwin Among the Machines that suggests Leibniz was "arguably the founder of symbolic logic and he worked with computing machines."He also had heard considerable discussion of the Leibniz – Newton feud and Newton's work at the treasury during the last 30 years of his life. He found "this information striking when [he] was already working on a book about money and a book about computers." Further research into the period excited Stephenson and he embarked on writing the historical piece that became The Baroque Cycle.

[bb000]

I also recommend Neal Stephenson's Cryptonomicon and The Baroque Cycle trilogy (Quicksilver, The Confusion, and The System of The World). A recurring them is the invention of money and the roots of financial system we have today.

 Also worth mentioning  the  prominent role of  the cypherpunks  mailing list in Cryptonomicon,  which was important in the development of bitcoin. It should be required reading for anyone interested  in the environment where  bitcoin evolved.