Bitcoin and the Tyranny of Time Scarcity (Part 7)
Economics is the art of cooperation and competition aimed at conquering scarcity.
Liquidity of Time and Information
Conceptually then, money is both frozen time (as a means of storing time savings) and liquid time (as a means of exchanging time savings). We earn money by sacrificing our intrapersonal time and can trade it for commensurate sacrifices from others. As such, anyone that gains control over a money supply, and can manipulate it at will, can steal time savings directly from the users of its money via the shadow tax of inflation. To shed light on the true nature of fiat currency in one line, let’s call it like it is: a pyramid scheme built atop gold that is subject to unlimited supply inflation. Since it bears repeating: inflation is intrapersonal time theft — a legally enforced injustice.
Manipulation of money supplies has other consequences. Money is an economy’s main informational utility; a touchstone to measure the value of the time savings (or spending) expected to be made possible by an economic good in the future. When a money supply is manipulated, the objectivity of its measurement ability is compromised. This breakdown of money’s informational utility is called price signal distortion. Such manipulation makes economic calculation less reliable and causes entrepreneurs to overborrow, misallocate capital, and, ultimately, degenerates time savings as capital is consumed instead of being compounded through reinvestment. Price signals provide a system for “market participant telecommunications” and can be explained as follows:
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Price signals are the navigational instruments for entrepreneurs sailing the tempestuous seas of markets, and money is the medium through which these signals propagate. Said another way: money is a measurement system for value (a temporal quality) in the same way a ruler is for length (a spatial quality). The less elastic the supply of money is, the better it fulfills this mensural purpose. If you are measuring a table with a ruler that you cannot trust, then you can’t be sure whether you’re measuring the table or the ruler; you cannot distinguish the signal (the actual length) from the noise (changes in unit of measurement). Gold outcompeted historically because of its relative supply inelasticity, which made it both the best store of value and conveyor of price signals. Uniquely, Bitcoin is a money with perfect supply inelasticity; it is the most uncompromising measurement system for value the world has ever known. In this sense, Bitcoin is like an inviolable ruler: a perfectly objective unit of measurement for the endless variations of market values.
Therefore, the more closely a money supply is credibly congruent with the absolutely scarcity of time, the better it communicates the time savings generated by our collective productivity gains. In this way, both gold and Bitcoin share the same principal attractiveness: they are more closely reflective of the impersonal, irreproducible, irreversible, unstoppable, and absolutely scarce nature of the experiential element money is intended to symbolize in the marketplace — time.
In Part 8, we will unpack the temporal anchorage aspects of money…
Thank you for reading Bitcoin and the Tyranny of Time Scarcity (Part 7).
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