<!DOCTYPE html>
<html>
<head>
<meta http-equiv="Content-Type" content="text/html; charset=UTF-8">
</head>
<body>
<p><br>
</p>
<div class="moz-cite-prefix">On 24/05/2026 20:53, Ron Garret wrote:<span
style="white-space: pre-wrap">
</span></div>
<blockquote type="cite"
cite="mid:3AABEA24-E28F-44E2-94E6-90C6455F679C@flownet.com">
<blockquote type="cite">
<pre wrap="" class="moz-quote-pre">On May 23, 2026, at 3:53 PM, <a class="moz-txt-link-abbreviated" href="mailto:calebpayne@gmx.us">calebpayne@gmx.us</a> wrote:
The exchange between Bill and Ron Garret cuts straight to one of the most persistent schisms in monetary economics and decentralized systems design: the distinction between **money as a stable unit of account** and **money as a neutral censorship-resistant ledger**.
</pre>
</blockquote>
<pre wrap="" class="moz-quote-pre">
There is actually a higher level of abstraction which is: money as a GENERALIZED CONTRACT, specifically, a generalization of an I.O.U. where one of the parties is not an individual entity but society at large.</pre>
</blockquote>
<p><br>
</p>
<p>The whole "what is money" thing is IMO garbled by economists with
their list of 3/4 features. They haven't really got the whole HasA
versus IsA thing from OOP.</p>
<p>To cut to the chase, I think money IsAn accounting machine
(system) that accounts for the relative inputs and outputs of each
person.</p>
<p>Once one has a strong grasp of what it is (IsA) then one can
discuss the features it needs (HasA) to succeed as a better money.</p>
<p>Then, money that is not independentally demanded (eg specie, gold
& silver) will generally need a CONTRACT to ensure that the
parties holding the units have a deal, so to speak.</p>
<p>Where we probably went wrong with money having a contract is that
initially, our common notes forms of money did have a contract -
on the note was printed "I promise to pay the bearer $5 in gold."
Or whatever number.</p>
<p>That was a fine contract, but the issuer of the contract (in this
case the Fed) reneged on the contract by removing the printed
commitment to pay in gold. Ever since then, the leading people who
educate us about the money - central banks => economists - have
stopped talking as if money is or has a contract.</p>
<p><br>
</p>
<blockquote type="cite"
cite="mid:3AABEA24-E28F-44E2-94E6-90C6455F679C@flownet.com">
<pre wrap="" class="moz-quote-pre">The problem is that people don't think of money as a contract or an option because they've never been taught that this is what it is.</pre>
</blockquote>
<p><br>
</p>
<p>Exactly.</p>
<p><br>
</p>
<blockquote type="cite"
cite="mid:3AABEA24-E28F-44E2-94E6-90C6455F679C@flownet.com">
<pre wrap="" class="moz-quote-pre">They have been taught that the "time value of money" is an axiom, that compounding interest and increased purchasing power with time is a fundamental human right or somehow a consequence of the laws of physics rather than the product of productivity improvements. As a result they see money not as a contract but an *entitlement*, and inflation as morally unacceptable *theft* rather than morally acceptable counterparty risk. IMHO this is a catastrophic failure of our education system.</pre>
</blockquote>
<p><br>
</p>
<p>The other thing that Central Banks do is surround the topic with
boring mysticism. This is a ploy to keep people away from their
grip on the power of money. You see this develop in strange ways
when they publish papers saying that digital money have monetary
policy implications. This is their way of saying "this is our
jurisidiction, leave it to us." While they over egg the pudding -
a good money doesn't have much in the way of monetary policy
implications - there generally aren't enough people telling them
to get back in their box; it's a good trick and they employ it
frequently.</p>
<p><br>
</p>
<blockquote type="cite"
cite="mid:3AABEA24-E28F-44E2-94E6-90C6455F679C@flownet.com">
<pre wrap="" class="moz-quote-pre">When viewed correctly as a contract, a certain level of background inflation becomes not only morally acceptable but morally necessary. The financial obligations represented by monetary contracts must have some kind of expiration date built in. Money has to be a "stable unit of account" in order to serve its purpose, but only on time scales on the order of one human lifetime, not across multiple generations, and certainly not forever.</pre>
</blockquote>
<p><br>
</p>
<p>Sort of - but inflation isn't the only tool. Companies that issue
money-like units (eg airline miles) often build in various
barriers into the contract that cause the 'money' to not last. As
you point out, one obvious one is an expiry - 2 years is popular.
Another is making it difficult to spend, a third is the general
loss rate, and also lesser ability to convert to other forms of
valuable tokens.</p>
<p>The general rule here should be that companies should be free to
experiment with their money contract and the market will tell us
what works best.</p>
<p>For example, if Microsoft were to issue a money, there would be
no need to reserve it. The company has a solid revenue stream, and
can make good on any contract from that.</p>
<p>(cue howls of protest, as some countries are passing laws to ban
such a contract. The howls of protest are because the above is
correct, and the howlers aka banks know they'll be competed out of
business if such a thing were to be allowed. This is precisely
what happened in the 1990s - some may recall that Bill Gates
popped up one day and said Microsoft was going to issue a money.
Howlers howled and Bill Gates was told no. Same thing with Zuck a
few years back...)</p>
<p><br>
</p>
<blockquote type="cite"
cite="mid:3AABEA24-E28F-44E2-94E6-90C6455F679C@flownet.com">
<pre wrap="" class="moz-quote-pre">The question of money as a "neutral censorship-resistant ledger" is a completely different matter.</pre>
</blockquote>
<p><br>
</p>
<p>As an aside, if we present money as an accounting machine, then
money as a "neutral censorship-resistant ledger" can be easily
seen as an *implementation*.</p>
<p><br>
</p>
<blockquote type="cite"
cite="mid:3AABEA24-E28F-44E2-94E6-90C6455F679C@flownet.com">
<pre wrap="" class="moz-quote-pre">This requirement is also a *consequence* of the fact that money is a contract with society at large as one of the counterparties, and so there has to be some way of keeping track of what society's obligations are under this contract that everyone will agree on. But that is *completely independent* of the actual agreements about future obligations that are entered into. One of the big problems with both cryptocurrencies *and* fiat currencies is that they conflate these two functions when they really ought to be separated. Of course, it is completely understandable why fiat currencies conflate them: controlling the record-keeping gives you power.</pre>
</blockquote>
<p><br>
</p>
<p>I would say, controlling (reneging on) the *contract* gives you
power, and controlling the accounting of the unit also gives you a
separate power.</p>
<p>But yes - hard agree - Bitcoin world doesn't so much conflate the
contract with the accounting, they don't even know that contracts
exist. And when they are forced to acknowledge them, they go
silent and run away.</p>
<p>It seems there is a massive learnt aversion to contacts, so much
so that even the regulators, who are often lawyers, don't
understand that there is a contract.</p>
<p><br>
</p>
<blockquote type="cite"
cite="mid:3AABEA24-E28F-44E2-94E6-90C6455F679C@flownet.com">
<pre wrap="" class="moz-quote-pre">But crypto currencies don't eliminate this, they merely shift the locus of power away from the issuers of currency towards those who understand technology. There isn't a government entity who can block someone from issuing a bitcoin transaction, but that doesn't mean there aren't barriers to entry.
Bottom line: the crypto world is reinventing a lot of wheels because people don't understand what money actually is and how it works. On which note...</pre>
</blockquote>
<p><br>
</p>
<p>Yes, another hard agree. Specifically on contracts: ICOs and NFTs
were hard fails bc the crypto world declined to put contracts in
there. Without a proper contract, that rendered them unanchored
and the rug pull proceeded without limit.</p>
<p>Regulators could solve about 80% of their crypto world angst by
just leaning into the contract aspect: SMTC should start every
conversation.</p>
<p>(Show Me The Contract.)</p>
<p><br>
</p>
<blockquote type="cite"
cite="mid:3AABEA24-E28F-44E2-94E6-90C6455F679C@flownet.com">
<pre wrap="" class="moz-quote-pre">Or we could create some kind of scheme whereby people put money into accounts whose numerical value grows over time. But wait, how could we possibly make that work? Hm, maybe people could take the money they aren't currently using and temporarily assign it to someone else who has an idea for how to to put that money to some kind of productive use. Then they could take some of the profit from the resulting value and use that to give the original owner of the money *more* than the amount they were temporarily assigned. That would have exactly the effect we are looking for! Isn't that, um, *interesting*?
</pre>
</blockquote>
<p><br>
</p>
<p>:)</p>
<p>iang</p>
<p>PS: Maybe it should be SMTFC ?</p>
</body>
</html>