Part 1: The Emergence of Money with Lyn Alden

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Lyn Alden is a macroeconomist and investment strategist. In this interview, we discuss Lyn’s amazing new book: Broken Money. This show, the first in a series of three shows, delves into the history of money: the concept of money as a ledger, its different forms throughout history, as well as the properties that make a commodity suitable for use as money.
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TIMESTAMPS:
00:00:00 History of Money
00:20:15 Utility & monetary emergence
00:28:31 Scarcity, coinage, layered money
00:43:11 Credit vs Commodity money
00:58:31 Tax; credit money, inflation
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****
“Commodity money is like nature’s ledger…bank money is basically a ledger governed by nation states…and then open-source money like Bitcoin is money governed by the users.”
- Lyn Alden
Lyn Alden is a macroeconomist and investment strategist. In this interview, we discuss Lyn’s amazing new book: Broken Money. This show, the first in a series of three shows, delves into the history of money: the concept of money as a ledger, its different forms throughout history, as well as the properties that make a commodity suitable for use as money.
- - - -
One of the key concepts Lyn explores is the idea of money as a ledger, of which there are three main forms: commodity money, governed by the specific properties of the physical commodity being used as money; bank money, which is a ledger governed by nation states and managed by central banks; and, open-source money like Bitcoin, where the ledger is governed by the users, who create and maintain the rules of the system. But how did money develop?
Money emerged as an innovation to solve the problems of barter, where the limitations of the double coincidence of wants and lack of trust between traders made transactions difficult. Money emerged as a liquid accounting system making transactions more efficient. Different cultures used various commodities as forms of money throughout history, including shell beads, cocoa, salt, and furs.
Each type of commodity used as money had unique properties that made them suitable, such as divisibility and the ability for them to be recombined. As technology advanced, people were able to produce more of these commodities, which led to their devaluation. However, two commodities that were difficult to devalue were silver and gold. These precious metals were rarer and had a natural difficulty adjustment, making them more suitable as money.
As important as the technology of money was the evolution of the theory of money. Two competing theories of money emerged: commodity theory and credit theory. Commodity theorists believed that barter was the precursor to money. However, credit as a form of money has been found in modern hunter-gatherer societies and used as an effective way of circumventing the need for commodities as money.
The current paradigm is seeing bank money and credit theory coming under significant strain. Every system controlled by human administrators degrades over time, with most currencies experiencing high inflation or even hyperinflation within a human lifetime. However, despite attempts to find alternatives like the dollar or Bitcoin, nothing quite fills the void left by the local currency. How money broke will be the focus of the next show.

[@LearntoMakeHonestMoneyOnline]

I'm a simple man. When Lyn Alden is on the show, I CLICK PLAY! 👍

[@insaaanestuff]

🐒

[@ppdrum]

Lyn has been on the show more than anyone. A good thing

[@theimpalerx666]

She hasn't been on more often than Peter though

[@jesuisrobert808]

Lyn can have her own show. All these KZbin hosts need her.

[@hollaera2006]

Every time Lyn speaks, my knowledge expands

[@Pauljfrederick]

Just when I think Lyn can’t be more of a boss, she drops a StarCraft reference. Amazing.

[@justinjtv4089]

right lol I'm listening to this at work and when I heard "Starcraft" I immediately focused in on this over work xD

[@TheInfinite91]

The first time I knew she knew StarCraft was when she mentioned the term ‘timing attack.’ It was the perfect term for the context too.

[@AlexScorpionVn]

Same!

[@etismyname]

Same here too!

[@chronomancer6665]

And then using SoJ's in D2.

[@jingmu1289]

I’m always amazed by how much I can learn from Lyn from each of her episode!

[@attrix09]

See Lyn's face, finger smashes mousepad.

[@ap-performance3850]

Yes!

[@lmanford1376]

Same

[@MervePay]

İ definatly like this nice

[@ripping]

Lyn - you MUST narrate your own book. I've been listening to you for the last 3 or four years, and to have anyone else read your book would be SACRELIDGE. Please, please read the book. pretty please with cherries on top.

[@CorwinYoutube]

Yes please!

[@pamelacogginsrobles3606]

Peter and Danny, you are a great translators. You have a way of dissecting the questions and the responses in a clear format so I/we can better comprehend and absorb the important ideas and messages from the great minds like Lyn. Such important work you are doing, well done!

[@mediatoryou]

Thank you, Lyn & everyone involved for breaking it down so clearly! I hope the book will be available in audio format. The eyestrain of reading puts me out.

[@gfpkelly]

Just love Lyn Alden!

[@caligulapontifex5759]

“Money is a ledger” Few understand this.

[@heimes7625]

My favourite chapter is the one discussing proof of work and proof of stake. The author goes into it in such detail and describes it in such a sophisticated way - it is simply wonderful to read and follow the ideas and intentions of the people around it. If you know Softwar from Jason P. Lowery you know what I mean.

[@marksargent400]

Loved the reference to StarCraft 👍

[@freyawildesciencefictionau8156]

Congratulations Lynn!!

[@davecorley5514]

Congratulations, Lyn! Looking forward to reading it.

[@willybolt6397]

Watch every WBD especially with Lyn. Going to buy the book right now.

[@ribama1]

Great interview. Lyn is my favourite macro analyst. One point: Money is a small % of most peoples net worth. Many people DO understand the effect of inflation and they don't care because the same inflation that dilutes money, increases the value of other assets. Most bitcoiners don't want to solve the money issue they want to get rich. There is nothing wrong with that, but it makes bitcoin like any other investment or speculation. When bitcoin becomes good as a money its price will be stable and the speculation will be gone it will be more like a bond and be less attractive to the people that promote it today.

[@pj8929]

Hej! Got the Book a couple a weeks ago, now on a beach somewhere on Mallorca, starting to enjoy this 90% [?] history lesson, maybe one can find a new angle. This “brick” already got some attention…on the plane from Scandinavia, two nearby passengers started to ask questions, and at this lovely Spanish island one person so far. I think many people have started to wonder wtf is going on - I do! Many thanks to both Lyn & Peter. Keep em comin. Love from Scandinavia!

[@rudolphteperberry3888]

Awesome as usual. Lyn you'd be a great narrator btw. I'll be reading the book with your voice in my head anyway 😅

[@zr0dark]

Hardcover ordered! Thanks for all of your insight Lyn and thanks for having her on so much Peter.

[@swylie2010]

I love the comparison to video games. Crypto and gaming hold the unique position of getting players to test out economic theories.

[@_jamesbro_]

Just received Broken Money in the post earlier today. Not put it down since (except to write this comment). Looking forward to watching this episode.

[@George-Aguilar]

In ❤ with Lyns mind!

[@user-99.99]

Awesome. Please bring a audio book version to market, Lyn.

[@squader1]

Love you Lyn!!! ❤

[@mc-kz8zn]

Loved this! Looking forward to the next part!

[@didactica9326]

God bless Lyn Alden 🙏🏼

[@P__114]

Can’t wait to buy the audiobook

[@HODL_BTC]

Give reading a go....🙃

[@mikatu]

because reading takes too much effort!

[@carlschellhammer3349]

Omg Lyn talks about StarCraft! I didn’t know I could like her more !! 😎

[@hosky7]

Got the book, look forward to it!

[@jghhursdy75]

very well explained!

[@Maximus.diamond.hands.]

Lyn is amazing can you please do a audio book!!!!

[@martincanchola3020]

Miss you Lyn!

[@nick-oi1xf]

Very interesting content, I can't wait to get the book

[@woody2822]

Just ordered the book,Thanks Lyn

[@derek.seaborn]

Very excited to read the book. Huge fan of your work, Lyn! I’d love to talk with you someday.

[@kenjo3045]

Got you book from Amazon today. ❤

[@YGOHeliosTM]

Is this the first time Lyn’s ever mentioned StarCraft or Diablo? Lyn a closet StarCraft pro confirmed?

[@riccardostella46]

I didn't realize Q from Impractical Jokers had a podcast :p Great interview!

[@MervePay]

Thank you for your advice i will check it

[@MilanMoore]

Brilliant! How do I get an autographed hardback copy of the book? Would Lyn consider putting a purchase link for this in her members area?

[@wmsc0ttcunn1ngham96]

On a visit to the National Library of Korea in Seoul, in 2019, we were treated to an insider's tour of the rare map room. As the handprinted Joseon Dynasty maps unfolded before our eyes, I noted across vast inland reaches a series of horse-stables sketched every so many miles, with nothing in between. Aside from a form of security from the north, the archivist pointed out -- wealth! At the time, horses were a sign of the Emperor's financial stores; liquid, easily moved and endlessly useful, in a practical fashion.

[@dek2000utube]

Thank you. Lyn and Michael Saylor are true geniuses with Heart!

[@moilanea]

Can't wait to get my hands on that book. Just a few more days.

[@Apollox0x]

Pete looking very sharp with his hair cut and beard trimmed!

[@paps79]

Looking forward to this 😊

[@dogbox2290]

Audio book. ☀️🌴Poignant reflection of history and money

[@michaelmulcahy2277]

Fabulous guys thank you. Off to buy my copy of broken money!

[@d2launcherFIX]

Awesome video! Lyn Alden is an inspiration.

[@gregorymartin2697]

Lyn is a rockstar. I am reading her book now. Thanks

[@robertrobert6665]

What can I say but THANK YOU!🧡

[@junkscience6397]

Honest question from a listener, not a reader: Will There Be An Audio Book Recording Available, Lyn? Anyone know?

[@keithmoore1329]

She said it’s in development on her Nostr feed. 😎

[@PropagandaDailyPod]

Yes lyn said one is in the works

[@Solittletimetoomany]

Lyn Alden, a voice for the economic intellectuals! She usually talks above my ability to comprehend! Would make a great professor! A la David Victor Hansen!

[@pallimidjord4351]

Will it be available on Amazon Audible at any point?

[@ramzerg]

Damn, Lyn is a Starcrafter? Nice!

[@Schubeedoobee]

where is the link to purchase the book? is it available in hardcover?

[@justinc9524]

Sold me as soon as she mentioned StarCraft!!! Lol Classic

[@joecizin9357]

This sounds like the Book that I've been Hoping for.

[@teo1092]

Lyn's Book ordered.

[@shad00w239]

I wonder if Lyn has an opinion on the lethal aspect of taxation under the credit theory of money. I feel as though the staying power of credit is backstopped by the ability to enforce that the ledger will be respected as it is. I feel like trying to discuss currency without speaking to human violence will always lead to an incomplete picture of whats at stake, because when trust breaks down, violence ensues - and trust can only exist insofar as it is effective at curtailing violence. In my opinion at least. Thanks for this interview, will check out tbe next part when its released.

[@deedub87]

Looking forward to listening to Guy Swann read this book :)

[@copycatt2579]

It worked. I’m buying the book

[@Schubeedoobee]

Ordered!

[@Shaflugi]

Myself and others I've talked about have definitely seen the Diablo 2 Stone of Jordan similarities when it comes to good money replacing bad! Wild to hear Lyn talking about it.

[@SkylineBilip]

As soon as they said ”wrote a book” i paused, opened amazon, searched for lyn alden and bought 2 copied instantly. 😂 is that wierd?

[@bitcoinpoemspro1406]

Love Lyn.

[@Annnnndbitcoinfixesthis]

Lyn’s the shiz!!

[@bitcoinpoemspro1406]

And another question to ask is, when more units of the money are created, where do they go first? And how are they introduced into the system?

[@fuzznakano]

We like Lyn

[@JackApfel]

I have to say it, I'm jealous of how cool your hair looks Peter

[@First_Principals]

On 16 October 1834 the palace of Westminster burnt down because of all the tally sticks stored there. Tally sticks were money in England for years.

[@JonnyBeoulve]

She's so smart I love her.

[@cykr0s]

The difficulty scale of gold production combined with the need for divisibility seems to be a big part of what makes gold less enticing as a monetary base now more than ever. 1/2000 oz coins are pretty damn tiny, especially for something as dense as gold. Never mind the fact that if gold were suddenly money again, amid a massive credit collapse (which would be likely a precursor to the remonetization of gold), it's market price would rise significantly, making even those coins a bit unwieldy for small transactions.

[@-nk]

Haha oh yeah, haven't thought about Diablo 2 in a while... that good old SoJs. Loving it!

[@od33bn]

🐐🐐

[@Bapeth]

People are using Golden Keys as money in the new Dark and Darker game due to the limitations of space in a player stashes. Golden keys only take up 2 slots where as gold coins take up almost 100x more space.

[@thaidude]

Lyn's minecraft analogy is very original.

[@dominikortler7431]

So the paper money is basically aesthetic laser money?

[@DavidGillie]

so when FedNow is free and instant, why would anyone use the fully traceable BTC to pay anything? Would BTC then serve only as a long term store of Value?

[@sahilkarangutkar3806]

Soo many GEMS

[@Namegoeshere-op9hg]

Inherent value/utility was required of legacy commodity monies because this was the only known method of solving the initial distribution problem. Bitcoin’s “immaculate conception” of a PoW no premine coin is a novel solution to the distribution problem.

[@daviddixon7019]

Like Nik Bhatia's, "Layered Money"?

[@ivn87gg666g]

So when Korean version!?

[@jackrsmusic]

Good podcast...But to pushback: how natural is the rise off commodity money? Do people really want to use gold is money? Or do they only want to use it once they have been ravaged by War and the local community destroyed, such as via colonisation? Read Debt by Graeber for an alternative account about hard money and it's links to war. Interesting interview neverthless, thank you!

[@user-uf2cv3el9o]

Nothing. Nothing can get you out from under a tyrant but brute force applied with intelligence.

[@CC-md5jp]

Algorithm 💪🏻

[@thomasgrams9715]

I greatly appreciate the closeup of Pete pretending he knows what Starcraft is. Great episode. Trying to make my way through the book. Lyn, as per usual, is great at simplifying things for morons like me.

[@cw1480]

def going to checkout Lyn's book but I highly recommend anyone interested in money read Debt: The First 5,000 years by David Graber. Exposes the whole founding myth of" barter societies" in Economics. Somewhat disappointing honestly to hear someone as intelligent as Lyn fall into the same tired (and untrue) trappings

[@NorbertWebDev]

Pls Audi book

[@peters972]

That is a really great way to describe money-a ledger. In Elon musks words, it is a database.. thanks Lyn

[@balintg]

+1 for starcraft

[@michalbotor]

how is bitcoin's complete transparency of who owns how much not a issue? it's just not safe to tell everyone how much do you have exactly. acquiring, storing, and using bitcoin safely necessarily requires to follow and don't mess up sophisticated rule book. the harder the more you have.

[@mbseeking6570]

Gold evolved to the best medium of exchange. And with value thus priced it also became the medium of net settlement for credit. Free banking distermediated credit..still settled with gold. Notes issued by free banks could be settled in gold (they held reserves) but rarely were unless failure..as the credit was usually issued for some productive purpose - so why/how could you redeem your paper claim? Along came central banks..they commandeered the issuance of credit notes (paper money) with legal tender, and also obsoleted gold as the medium of credit but using central bank reserves between free (semi free) banks. By an large this system work for a while because banks were still lending for productive purposes. But over time banks priortised lending do real estate vs other productive things.. and goverment increasingly started to tap the central bank to be its credit provider as tax burdens became too high. Free banks should be settling between each other with bitcoin. and backign their credit promisories with is. .. this should make central banks obsolete.. it would eleminate the goverments banker, making it, the government beholden to the people , once again.

[@mbseeking6570]

But of course how will that happen when it means taking power away from the guy with the gun.

[@ProseStylist]

I disagreed with Lyn on the Credit Theory of Money, I feel she conflated it, or only focused on Chartalism to critique it. Not all Credit Theory of Money proponents are Chartalists (subset), and even then, there is disagreement amongst proponents, whether money evolved to facilitate debt or whether debt and money are essentially the same thing. Lyn says she was fair to the theory but didn't delve into anthropology (crucial for understanding origins of money), she mentioned utility but seemed to be missing social dimensions like ceremony, status, cohesion and trust within a tribe being a large component of whether your IOU's or gift exchanges would even be accepted. Not to mention, how barter is actually rarely observed within tribes, and is actually more of a ceremony to reduce violence between interloping tribes. A typical barter ceremony involves hiding the women and children, song and dance, swapping items between both groups until there is mutual acceptance. Where was this in the discussion?

[@we3k1ngs12]

I see Lyn I “Click”

[@robbatayaki5505]

elle est remarquable

[@nhexplorers]

Lyn you should definitely narrate the book. Your voice is iconic. As for Peter’s voice, I can still hear him whining about people who didn’t take the vaccine. What a wanker.

[@didactica9326]

Love this comment 😂🎯

[@brettteeter3461]

Wanker. As an American, this is so funny.

[@michaellydon1239]

LoL

[@_huahua0413_]

Reverse repo 101

[@davef5916]

LYN IS INTO STARCRAFT?!

[@bmo8898]

Lyn, will you have pizza with me!?!