The biggest amount of money creation is done by commercial banks in the form of credit, and it’s the vast majority of the money that gets spent. The inability of commercial banks to lend ends up in deflation, as no new money is created in the forms of debt and old debts are paid.

There are two possible scenarios for a commercial bank to be unable to lend:

  1. People’s believe that the economical situation will be worse in the future, so they will not get new loans and will pay their debts.
  2. People’s inability to get new debt as they have no more income left to pay for extra interests. …

It’s all about liquidity. Liquidity or salability is a property very well looked for in assets, especially in safe assets. In times of uncertainty, you want to hold the most liquid assets, as any downturn will force you to liquidate some of your assets.

Imagine that your assets are 100% invested in real estate and you need to service some obligation immediately so you are forced to sell one of your precious apartments. …


Complex human societies are based on layers of belief systems. Most of these systems were created naturally and provided value as they helped to create social cohesion.

Money in itself is just a belief system. It’s not perfect and it doesn’t have to be optimal. It just has to exist because makes societies better than otherwise. Money does not exists in reality, it’s just used as a huge imaginary balance sheet that allows every human in the world to record information about who deserves to use more resources than others in a finite world.

Money will never be perfect, as it’s used as a model to represent reality. But what great advantages it offers societies in its current state. …


Mucho hype se ha escuchado sobre las criptomonedas en los últimos años. El hype se ha dirigido también (gracias a muchos importantes personajes en la industria) hacia la tecnología que usan internamente: las blockchains.

La tecnología blockchain es verdaderamente positiva, y tiene muchas aplicaciones a futuro, incluyendo entre otras, mejorar las cadenas de suministro, verificar el ownership de determinadas propiedades y crear contratos inmutables que pueden ser verificados por las partes. Estas son sólo las aplicaciones que se ven en el horizonte y muchas más serán creadas en los próximos años.

Sin embargo, en mi opinión, aunque las aplicaciones de las blockchains tienen un sentido más tangible a corto plazo, no debemos olvidar qué fue verdaderamente lo que hizo que aquella primera criptomoneda, bitcoin, surgiera a proporciones insólitas llegando a capitalizar más de 300 mil millones de dólares: su posibilidad de capturar valor.


Image for post
Taken from bitcoin.com

History has been a long tale where the strongest individuals have been the rulers and the weak ones the ruled. Historically, the rulers have been able to decide what is right and what is wrong. They exercise their power through fear and coercion with the goal of making the members of their society do whatever they wish them to do.

As time passed and populations grew, it became very unpractical for the rulers to exercise power directly. Something needed to be done in order to outsource the coercion: incentives or rewards needed to be given to selected individuals to make them dispatch violence in the rulers’ desired way. …

About

Alessandro Chacón Caringella

Just interested in Bitcoin

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