What have the Romans ever done for us?

I very much enjoy reading Izabella Kaminska’s postings at FT’s Alphaville. She provides wonderful insights on what money is and there is a lot to learn from what she writes. Her description of how the banking system creates (different) money from the one issued by central banks is a very good and easy to understand explanation of a complex phenomena that most people (that are supposed to know about this matters) completely ignore. But I often have the feeling she fails to spot the big elephant standing in the middle of the room trumpeting loud for her attention.

Her last post on the Bitcoin series is a good example, she wrote:


Bitcoin may be many things: a cheaper and more efficient payments mechanism, a decentralised form of QE, an extreme way to break through the ZLB, a worthy private substitute for cash, an opportunity to stick it to the man or even a speculative investment opportunity of a lifetime.

What it isn’t, however, is a fair distribution of income.

Why should it? Or better still, is there something that is?

I am not a big fan of Bitcoins. I don’t understand its utility other than for being a means of payment so I don’t understand why it is sought after mainly as a reserve of value. Don’t get me wrong, I understand how the value of something increases once it starts to be used as money (be it gold or cigarettes), but that it is the first and only known use sort of puzzles me. It strikes me as starting to build a house by its roof. A symptom produced by a monetary system that is deeply flawed rather than the actual cure.

The only money creation central banks allowed (outside their own) under their monopoly was that of the banking system. People need money that allows them to satisfy their needs and central bank monopoly prevented the knowledge of how to produce (and distribute) better kinds of money from surfacing. Bear in mind that the internet is probably one of the few places where it is hard for governments to tamper with the creation of money. Internet isn’t necessarily the best solution but it could be the best one available.

When government-issued fiat money no longer satisfies individual’s needs, it is only natural that they turn to something else. The altercoin movement is a truly entrepreneurial process of discovery and satisfaction of people’s needs when it comes to money. The motivation, like always, is profit and off course people stand to lose a lot (and that is why it is only natural that someone invested in Bitcoin grows weary of the looming threat of competitors – what if they made the wrong bet?), but at least they stand to lose their own wealth and there is no danger of losses being socialized.

In any case, if Bitcoins do half of what Kaminska says they do it is a case for asking:

What have the Romans ever done for us?


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