• The article discusses how Bitcoin is changing the mental model of people and inspiring them to live more responsibly.
• It points out that this change in behavior is due to the incentives of fiat money, which are not conducive to savings.
• The author then goes on to explore the ways in which these incentives have affected individuals, companies, countries and the world.
Overview
This opinion editorial by Bitcoin developer Jimmy Song examines how Bitcoin has changed people’s mental models and encouraged them to live more responsibly. He argues that this transformation is largely due to the incentives created by fiat money, which makes saving difficult for individuals at all levels.
Individual Incentives
The author begins by discussing how fiat money affects individuals at a personal level. He states that there are few good stores of value in the economy because of Keynesian policies and this makes saving difficult for many people. He goes on to explain that low interest rates combined with inflation also discourage people from saving as their money loses its purchasing power over time.
Company/Group Level
At the company/group level, Song explains that debt-based financing incentivizes companies to take on large amounts of risk in order to increase their profits or growth rates quickly without having to save up first. This can lead to financial bubbles where inflated prices collapse suddenly when investors realize they have overestimated the value of an asset or company too much.
National/Country Level
At a national level, Song points out that governments have used currency debasement as a way of paying off debts without raising taxes or cutting spending directly. This leads to devaluation of currency over time and erodes citizens’ wealth while simultaneously increasing government debt levels as they print more money than necessary just cover expenses instead of finding other sources of revenue.
World Level
Finally, Song argues that at a global level, fiat money has led countries into a race-to-the-bottom with each trying to devalue their own currencies faster than others so as not become uncompetitive in international trade markets. This has caused an alarming increase in global debt levels as well as instability in currency exchange rates since it’s difficult for businesses and investors predict what will happen next with different country’s monetary policies competing against each other so aggressively.