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Author’s Notes

The concepts of money are difficult to capture in a brief line or two, and in my experience require many conversations from many different angles, over many years. I tried to design this book as a conversation piece that can be revisited and appreciated in new ways over many years. Hopefully each of these pages serves as a fun way to spark conversation with your kids.

Here are some of my thoughts around the concepts touched on in this book. Numbers are the corresponding page.

  1. Let’s say we have two groups of people. Group A can print money. Group B has to work to get money. What do you think it would feel like to be in group A? How would it feel to be in group B? Did you know that’s actually how it works, that some people can print money, and the rest have to work for it?
  2. When the government started printing money to give to people who couldn’t go to work because of COVID lockdowns, a lot of people started wondering why they had to pay taxes if the government could just print money. It’s a good question. What do you think?
  3. Most people don’t realize that when a bank makes a loan, they don’t actually have that money. They create it out of thin air. It sounds too bizarre, I know, but that’s how it works. And who do the banks give loans to? The best way to get a loan is to pledge assets, like stocks or real estate, as collateral. So the more assets you own, the easier it is to get a loan, which you can then use to buy more assets. Meanwhile the asset prices go up and the loans get easier to pay as the money looses value because of inflation. The rich benefit from fiat money. The poor are penalized.
  4. Yes, it’s true that chickens can get sick, which can cause egg shortages. But this is something that farmers try to plan for. What farmers can’t plan for is when the money supply changes and all of the prices become unstable. First, from September 2019 to September 2021 the FED printed $4.7 trillion, which more than doubled the money supply. Then the FED saw that prices were increasing too quickly, so they started to destroy dollars. This causes a lot of businesses to struggle to pay their debts, which forces them to either go bankrupt, or raise their prices. When they go bankrupt, and people loose their jobs, that means that fewer essentials are being produced. Fewer essentials means that prices have to go up even more. Changing the money supply causes chaos. It forces everybody to think short term, instead of being able to save and plan long-term for the future.
  5. Standard weights and measures are essential for measuring anything. Pretty crazy that the world has never had a standard for measuring value. Gold has been the most reliable standard for measuring value, but even the amount of gold doubles every 35 years.
  6. When you’re dealing facts of nature and inescapable consequences, you need an engineering solution. There are certain facts that make something a good money, or not. Money isn’t just a social construct, and if we just all agree something is money it is money. No. Good money has certain properties, which means that the best money must be engineered.
  7. As of January 2023, half of the world suffers under double digit inflation!

https://twitter.com/CarlBMenger/status/1616709861697556480?s=20&t=FdjYYvRoJ0ptpxzKgWZcUg

  1. The Bitcoin Whitepaper does a beautiful job explaining why a trustless rule set for money is needed. Central banks and political rulers have violated trust repeatedly. A study of over 775 fiat currencies shows the average lifespan of a fiat currency is only about 27 years.
  2. Never in the history of humanity has it been easy for anybody to easily verify the purity of money. The best way to guarantee that gold is pure is to melt it down. A Bitcoin full node, that can easily run on any old laptop or computer, is like a magic set of goggles that let’s you easily see the purity of each and every bitcoin ever to exist.
  3. There are 100,000,000 sats in 1 bitcoin. On the lightning network, fees are paid in msat, or 1,000 msats to 1 sat. Even at a price of $10,000,000 per bitcoin, that’s only 10 cents per sat, or $0.0001 per msat.
  4. Since Bitcoin is programmable money, other innovators can build on top of it to make it faster, stronger, and smarter. The lightning network is a good example of this. When Satoshi started Bitcoin, the lightning network did not exist. As the Bitcoin blockchain filled with transactions all competing to be included, new solutions were needed to make it easy to teleport Bitcoin easily around the world. It will be exciting to see what they engineer next!
  5. The incorruptible substance. I love the rabbit hole Robert Breedlove started digging in this area of alchemy and the Philosopher's Stone. Start falling in here.
  6. The most popular savings account. Homes. Since printed money doesn’t hold its value, people had to find something that did. Since homes are harder to print than paper, or digits on a computer screen, they became a natural way for people to save their wealth into the future. But think of all the waste this causes. Since homes are monetized and valued far above their utility value, the market is tricked by price signals that the world needs more homes. Or bigger homes. Think of all the materials and jobs that are consumed by this enterprise of building homes to serve as savings accounts. Record amounts of homes sit empty in the biggest cities in the world because those properties hold their value best.
    1. The most important job. Making energy. Think about it. You need some form of energy before anything else can be done. Since the main cost of Bitcoin mining is energy usage, Bitcoin is a brilliant way of rewarding the most efficient energy producers in the world. Bitcoin issues all the new money first to the best energy producers. The Bitcoin miners then must spend most of their revenues throughout the world to keep their very expensive operations going. If you think about it, Bitcoin is a giant subsidy for sustainable energy and computer chip technology. Expect to see massive advancements in the decades to come. The volcano is an homage to El Salvador’s pioneering work.