Seeds: A tool for a steady-state financial system
Central bank money concentrates wealth by:
Fiat losing purchasing power.
That means that if you're not getting a promotion equal to or greater than the rate of inflation, then as a wage-earner, you're actually getting a demotion in pay year after year (which is one way the poor get poorer).
The wealthiest avoid this trap (and the wealthier you are, the more you're able to avoid it, e.g. "accredited investor") through investing their wealth and making returns greater than inflation (e.g. why the system was more interested in bailing out Wallstreet than Mainstreet).
Fixed supply "sound money" cryptocurrency concentrates wealth by:
Crypto gaining purchasing power.
When the pendulum swings to the other extreme it's just as destructive. However, instead of concentrating wealth through inflation Bitcoin and others concentrate wealth through accumulation and appreciation (when the purchasing power of Bitcoin increases).
The already wealthy are able to (and do) accumulate large sums of Bitcoin and grow their wealth even further. Those with more wealth are able to run more miners (to create more currency) to grow their wealth even further (a positive feedback loop that concentrates wealth)
Satoshi Nakamoto (creator of Bitcoin) owns ~5% of all Bitcoin that will ever exist and companies (like Bullish, Microstrategy, etc) own ~1% of the entire supply of this "world reserve" currency that will ever exist. Imagine a single company or individual owning 5% of all reserve currencies? Bitcoin did the unthinkable and lead the way. It proved that we can create decentralised financial systems. But, it's not going to be the financial system we need to create regenerative economic systems with.
To prevent positive feedback loops that concentrate wealth (consistent inflation or deflation) we need a steady-state currency that's neither dramatically losing or gaining in purchasing power.
Last updated
