Chapter
The Future of Crypto: Not Necessarily Money
Economist and author, Niall Ferguson, suggests that rather than trying to fit Bitcoin into traditional definitions of money, we should instead view it as a system of payments that doesn't necessarily need to be classified as money, but as a series of tokens representing financial transactions. He points to bills of exchange and their role in creating the first peer-to-peer payment system as a historical example.
Clips
The use of coins in daily transactions is a relatively recent development in human history.
1:08:27 - 1:12:38 (04:10)
Summary
The use of coins in daily transactions is a relatively recent development in human history. Ancient coins were metal tokens marked with the imprint of a state or monarch, and are a last remnant of a much older system of bartering for goods and services.
ChapterThe Future of Crypto: Not Necessarily Money
Episode#239 – Niall Ferguson: History of Money, Power, War, and Truth
PodcastLex Fridman Podcast
Bills of exchange, not coins, allowed for the first peer-to-peer payment system that was network verified, as pieces of paper represented the exchange of goods over time, from Florence to London.
1:12:38 - 1:18:20 (05:42)
Summary
Bills of exchange, not coins, allowed for the first peer-to-peer payment system that was network verified, as pieces of paper represented the exchange of goods over time, from Florence to London. The value of money comes from its network based verification and peer-to-peer transactions without third party verification.
ChapterThe Future of Crypto: Not Necessarily Money
Episode#239 – Niall Ferguson: History of Money, Power, War, and Truth
PodcastLex Fridman Podcast
When the system of trust and the monetary system collapse, the reliability of relying on other human beings is tested.
1:18:20 - 1:20:17 (01:57)
Summary
When the system of trust and the monetary system collapse, the reliability of relying on other human beings is tested. While settling debts with humans is common, it's not always the most convenient form of money.
ChapterThe Future of Crypto: Not Necessarily Money
Episode#239 – Niall Ferguson: History of Money, Power, War, and Truth
PodcastLex Fridman Podcast
The 20th century saw multiple currency failures as economies tried to rebound from the devastation caused by the First World War.
1:20:17 - 1:23:51 (03:34)
Summary
The 20th century saw multiple currency failures as economies tried to rebound from the devastation caused by the First World War. The system that produced relative price stability over the 19th century fell apart, leading to the establishment of central banks that aimed to keep inflation in check.