Great video, from an hour in talks about history of money and the future. Made me think of fragility and antifragility in the history of money / exchange and importance of diversification in portfolio
Things that stood out to me:
- Sumerian tablets describing relationship between debtor and creditor
- Coins and tokens (fungibility ‘ability of a good or asset to be interchanged with other individual goods or assets of the same type ‘)
- Shift after black death (late 14th century): bills of exchange (IOUs) > first peer-to-peer network payment system. Enables long-distance trade > growth of world trade
- Payments don’t need to be money, trust is key > inflation as crisis of trust in means of payment
- Importance of convenience – Chinese skipping cards to mobile payments
- Price stability since 21st century (with some exceptions) giving illusory view of overall stability over time > messiness of financial history > series of crises leading to innovations over time
- Bitcoin and means of internet-based payments > peer-to-peer verification > sufficient adoption likelihood of it being killed off is low > unknown damage ill-judged regulatory intervention can do
- Movement to fungible game-token, meta-verse tokens etc.
- Central bank digital coins as authoritarian model – Chinese approach to monitoring all transactions
- Bitcoin as optional digital gold (finite supply) > if digital currency proves successful over time
- Bitcoin as nicely uncorrelated asset (doesn’t track markets etc.) important optionality during disruptive era to hold some
- Ethereum and more elaborate digital systems of payment and services > Smart Contracts > cutting out the middleman > reducing complexity of intermediaries and bureaucracy associated
- Fintech and jungle of regulation that will cause disruption over time, incumbents seeing threats > importance of brining people into system (lower incomes) and reducing transaction costs (social transformation)
- Crypto as store of portable wealth in dangerous, unstable places that are politically volatile
- Scenario of WWIII and cyber war – in that case you’d want physical gold in portfolio too – importance of hedging / diversification