Chapter

From Babylon to bitcoin

From Bitcoin and the new economic order by Mike casey

Concepts

1. Why must every form of money earn people's trust? A monetary system works only when the people using it believe that oth

   "Why must every form of money earn people's trust? A monetary system"

2. How does cryptocurrency propose a different model of monetary trust? Cryptocurrency attempts to move part of the trust n

   "How does cryptocurrency propose a different model of monetary trust? Cryptocurrency attempts"

3. Why is trust central to understanding the history of money? Money is useful because people expect that the value represe

   "Why is trust central to understanding the history of money? Money is"

4. What can hyperinflation teach us about how money fails? Hyperinflation shows what happens when confidence in a currency

   "What can hyperinflation teach us about how money fails? Hyperinflation shows what"

5. What did the Weimar experience demonstrate about monetary instability? Germany's severe inflation after World War I beca

   "What did the Weimar experience demonstrate about monetary instability? Germany's severe inflation"

6. Can a country recover after severe monetary disorder? Historical cases show that monetary dysfunction is not necessarily

   "Can a country recover after severe monetary disorder? Historical cases show that"

7. Why is excessive money creation not the whole explanation for a currency crisis? Creating too much money can accelerate

   "Why is excessive money creation not the whole explanation for a currency"

8. How can loss of trust create a self-reinforcing currency crisis? When people lose confidence in a currency, they try to

   "How can loss of trust create a self-reinforcing currency crisis? When people"

9. Why is Argentina useful for understanding monetary trust? Argentina illustrates how repeated monetary and institutional

   "Why is Argentina useful for understanding monetary trust? Argentina illustrates how repeated"

10. How can distrust of government affect tax compliance and economic behavior? When citizens believe public institutions ar

    "How can distrust of government affect tax compliance and economic behavior? When"

11. What happens when people stop trusting banks to protect their savings? Depositors may withdraw funds, hold foreign curre

    "What happens when people stop trusting banks to protect their savings? Depositors"

12. Why can official inflation information affect confidence in a currency? If people believe economic statistics do not ref

    "Why can official inflation information affect confidence in a currency? If people"

13. Why do people move into foreign currency during monetary instability? A foreign currency can become an informal store of

    "Why do people move into foreign currency during monetary instability? A foreign"

14. Why did physical U.S. dollars become important in Argentine property transactions? Repeated financial crises made many p

    "Why did physical U.S. dollars become important in Argentine property transactions? Repeated"

15. What role can informal financial networks play when formal banking is distrusted? Alternative exchange and transfer netw

    "What role can informal financial networks play when formal banking is distrusted?"

16. Why can personal relationships substitute for institutional trust? When courts, banks, regulators, or governments are vi

    "Why can personal relationships substitute for institutional trust? When courts, banks, regulators,"

17. Why are small circles of personal trust difficult to scale? A modern economy requires millions of transactions between p

    "Why are small circles of personal trust difficult to scale? A modern"

18. What does the exchange-house example reveal about the nature of trust? A transaction can feel risky even when the partic

    "What does the exchange-house example reveal about the nature of trust? A"

19. Why can a less formal system sometimes appear more trustworthy than a formal bank? Trust is shaped by experience rather

    "Why can a less formal system sometimes appear more trustworthy than a"

20. What is the difference between a trustless system and a different model of trust? Calling cryptocurrency 'trustless' can

    "What is the difference between a trustless system and a different model"

21. Why does Bitcoin still face a trust problem even if its rules are mathematical? Users must believe that the technology i

    "Why does Bitcoin still face a trust problem even if its rules"

22. How is cryptocurrency connected to weaknesses in government monetary systems? Cryptocurrency is partly motivated by the

    "How is cryptocurrency connected to weaknesses in government monetary systems? Cryptocurrency is"

23. Why should money be understood as more than a physical object? The physical token is often only evidence of a broader sy

    "Why should money be understood as more than a physical object? The"

24. What does it mean to describe money as a social technology? Money can be viewed as a system that helps society record va

    "What does it mean to describe money as a social technology? Money"

25. How did abstract money help societies move beyond small tribal exchange? A widely recognized unit of account allows valu

    "How did abstract money help societies move beyond small tribal exchange? A"

26. What does the stone money of Yap teach us about ownership? The large stone currency associated with Yap demonstrates tha

    "What does the stone money of Yap teach us about ownership? The"

27. Can something function as money even when it has little practical use as an object? Yes. Monetary value can arise from c

    "Can something function as money even when it has little practical use"

28. Why do people instinctively search for intrinsic value in money? Physical intuition encourages people to assume that val

    "Why do people instinctively search for intrinsic value in money? Physical intuition"

29. What is a dollar bill actually worth as a physical object? The paper itself has very little economic usefulness compared

    "What is a dollar bill actually worth as a physical object? The"

30. How is a banknote similar to a written contract? Both a banknote and a contract derive much of their significance from t

    "How is a banknote similar to a written contract? Both a banknote"

31. What does a dollar represent within the banking system? A dollar can be understood as an accounting claim recognized wit

    "What does a dollar represent within the banking system? A dollar can"

32. Why does social consensus matter to the value of fiat currency? A fiat currency remains useful because people broadly ag

    "Why does social consensus matter to the value of fiat currency? A"

33. Does a currency need intrinsic value to function as money? Not necessarily. A monetary unit can function because it is w

    "Does a currency need intrinsic value to function as money? Not necessarily."