Fiat The Fear!

• How is that?

Nothing affects the livelihood of citizens than governance (being the chief determinant factor to the cost of living in a nation), and to properly navigate the economic complexities of different political ideas and policies requires a fair, if not sophisticated knowledge of economics which isn't a common place in secular education. The course of world economy have ever been subject to various political and geopolitical demands of times and seasons which often compels individuals to opt-in every contemporary financial skills necessary to survive the economic situation of their time; of which current fiat monetary system (where money kept losing its purchasing power over time) necessitates the knowledge of economics even the more.

• The Defunct Money

An 'ideal money' has three main functions: to serve as medium of exchange, unit of account and store of value, and gold with silver served both purposes while they circulated as currencies and were equally standards of money in the days of metallic monetary systems. But the high financial demands of war and other political ambitions of government gave rise to paper money or what is known monetary expansion policy (an infinite supply of money) which saw the end of the said metallic monetary systems and consequently altered the function of 'money' (fiat) as a perfect store of value owing to its commonality and devaluation through inflationary supply (unlike gold with limited supply due to its rarity).

• But "Bitcoin fixes this" they say!

Meanwhile, in this era of high scarcity of gold and other precious metals due to hoarding and dwindling discoveries of new mining sites, with a finite supply of 21,000,000 BTC (total amount of bitcoin that can ever exist) bitcoin is a millennial digital or alternative gold (store of value or hedge against inflation) which it has proven for the past 14 years of its existence. And that because unlike fiat money with limitless supply, there are programmed constraints to bitcoin generating process (mining): (i) finite supply as a built-in scarcity to guarantee growth in value over time and (ii) expenditure of power and time in its mining process to mitigate inflationary supply. Just a scratch of surface in all there are to bitcoin! Nevertheless, to fully grasp the concept of money and leverage bitcoin's monetary propositions every 21st century individual must first acknowledge the problem it came to solve by discovering how the world ended up on paper money (fiat currency).

• Economics Beckons!

Nature is generous when it comes to life lessons, as history tends to repeat itself in each generation. And just as the economic instabilities of the past changed the financial perspectives of our ancestors, the infamous economic meltdown of 2008, followed by the birth of Bitcoin in 2009 with recent events of 2023 (multiple bank closures in the U.S., naira scarcity in Nigeria to enforce central bank digital currency CBDC and too many government sanctions, taxations and lawsuits aimed at cryptocurrency) singnifies a gradual shift in world economic system, and must have once again raised present generation's curiosity about what's really going on 'behind the scene' of global financial system and institutions. An answer only history can give.

But whether modern economic shakeups have managed to draw one's attention to financial matters or not (as it doesn't take to be an expert to know the things of economics), it have always been a rewarding adventure and an eye opener to find out causes of preceding economic incidents of the past, and equally a good way to make a step into journeying to the 'wonderland of global economics and its evolutive monetary systems'.

See you on the next passage of this episode: [THINK ABOUT THESE].

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Christian Eziokwubundu O.
Christian Eziokwubundu O.

My name is Christian Eziokwubundu Obilor, director of [chrisdotcom] a business majoring in mobile phones hardwares and softwares repairs, selling of phone accessories and ICT trainings.

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