Independent money, free of government control, has long been a dream of liberty-minded individuals.
Nobel Prize-winning economist and free thinker (a rare thing) F.A. Hayek described the main problem with a single group having a monopoly on money: a profound lack of innovation. Here’s an excerpt from his 1984 interview with the Cato Institute:
The great trouble is that money wasn’t allowed to develop. After 200 or 300 years of the use of coins, governments stopped any further developments. We were not allowed to experiment on it, so money hasn’t been improved, it has rather become worse in the course of time.
Money certainly has devolved over time. It has descended from being backed by hard assets, like gold and silver, to its 100% fiat status today. There’s nothing backing it, and there’s no limit on the amount that can be printed.
There’s not even precious metals in coins anymore – not even copper in pennies! So we can see that innovation dies and money loses value when centralized powers have control over it. It’s happened throughout history.
But Hayek was truly ahead of his time. He went so far as to think about how we could develop an alternative monetary system. Here’s a Hayek quote from a different 1984 interview:
I don’t believe we shall ever have a good money again before we take the thing out of the hands of government – that is, we can’t take them violently out of the hands of government, all we can do is by some sly roundabout way introduce something that they can’t stop.
So Hayek thought that we could create independent money in a “roundabout way… something that they can’t stop”…
Sounds like crypto to me…
It uses a decentralized network of computers to solve the “something they can’t stop” part of his idea. Nobody owns bitcoin. It is an independent network of millions of people voluntarily using it and improving on it.
