Nick Szabo  🔑

1/8 This thinking just shows that even top academics don’t know what money is. They can literally think only in debt. I’ve encountered this same thinking from many top economists. https://twitter.com/zackvoell/status/1100172115477700608 …

2/ Traditionally, debt would be used for trusted transaction where you could ensure it would be paid back based on prior history, collateral, or income. On the other hand, final settlement assets would be used for trustless transactions such as gold coins, seashells, beads, etc

3/ Each of these have very specific social uses. Debt and credit assets are used with people you trust. Final settlement assets for those that you can’t trust, or don’t need to.

4/ For example, when trading with a potential stranger, you would want to use the trustless money. Debt cannot be used as the stranger may may lie to you about repayment, or be impossible to locate.

6/ But as we all know, the party has to stop eventually. Debt: the first 5000 years is littered with examples of societies monetizing debt and falling to pieces. (Note, even Graeber seems to ignore the important trustless forms of money in his book).

7/ This is why economists can’t understand bitcoin. They haven’t seen trustless money in decades! Debt is the only form of money they know. By the time they understand, it will be too late.