They say that there are two deep secrets in a person’s life: love and money. Love inspires. Money provides. If a lot of works have been written about love and inspiration by many poets and prose writers, then, oddly enough, there is quite a bit of quality information about the nature of money.
It is well known that once money was made from precious metals, then the state monopolized its production and circulation, and replaced it with its own receipts, known as “national” money. National money functions insofar as the state forces people to use it in calculations and in the payment of taxes. In other words, money exists thanks to the mechanism of violence. And even when we use them freely, we do so because we believe the mechanism of violence behind them is effective.
Why does the US dollar remain one of the most popular currencies in the world, despite the fact that the US budget deficit is already about 7%, and the ratio of public debt to GDP has been flying into space in recent years? Interest rates are rising, and along with them, the share of the budget going to pay loan payments is growing, and this whole structure is beginning to look more and more like a financial pyramid. However, there is not much flight from the dollar. Yes, the share of the dollar in international reserves has been declining in recent years in favor of gold and the yuan, but there is no panic. Why? Because people believe in the American apparatus of violence: the US government has enough power to collect enough taxes and a large enough navy to impose its rules on the weak in Latin America, Africa and the Middle East.
In this coercive approach, competition between currencies and monetary systems is reduced to military competition between the great powers issuing money. This military competition gives rise to world wars from the moment when the first Central Banks appeared and money became “national”. The first Central Bank to issue money partially backed by precious metals was the Bank of England, founded in 1694. Already in 1701, a war began, which many historians consider to be the First World War, because all the major European countries of that time participated in it. This was the War of the Spanish Succession, which began the era of European imperialism.
Why does a war, which in itself does not bring any prosperity to the people, become a justified means of clarifying relations between the great powers? Because issuing money is the coolest business in the world. A $100 bill costs just a few cents. The cost of digital $100 is nothing at all. These are just zeros and ones on the banks' computers. But with these symbols, which acquire value in people’s minds, you can buy, for example, a completely real one and a half barrels of oil.
Mayer Amschel Rothschild is credited with the phrase “Give me the power to issue and control the circulation of money in a state, and I will not care about those who write its laws.” The same thesis is true for the whole world. But all this only works when there are mechanisms of violence that force people to use money. When the next hegemon weakens, and there is not enough strength to maintain global financial power, the next historical period of wars begins, which should reveal a new strongest one, or strengthen the previous one. This is precisely the historical period we live in now.
Is it possible to switch to another system? Towards a system not based on violence.
Bitcoin became the first technology on the basis of which it was possible to try to get away from national money uncontrolledly issued by Central Banks, while maintaining the global reach of the monetary system. Can we say today that this attempt was unsuccessful? It seems possible. Because no Bitcoin economy has emerged. Only a new asset emerged that was accepted by the old financial system. The old financial system entangled Bitcoin with its compliance rules, surveillance of transactions, and control of financial flows for tax purposes. Ultimately, the value of Bitcoin began to be determined by the tolerance of states towards it. People still believe more in violence and control than in the kind of impersonal, anonymous freedom that the first digital currency first provided, and which it is increasingly less able to provide as blockchain monitoring and transaction tracking tools develop.
Why did this happen? For the existence of a monetary system, there is little trust in money itself. The trust of the parties who use them is important. What good is it that you are ready to pay in “fair coin” if you have no guarantees that the counterparty’s obligations will be fulfilled? Such guarantees can be provided either by the apparatus of violence or by the institution of reputation. The stronger the institution of reputation, the less various apparatuses of violence are required. This is the key to building a trusting, non-violent free digital economy, which can become an alternative to the existing global system.
Just think: if such an economy arises, it will quickly and naturally end all major power conflicts on the planet!
Surprisingly, no one seems to have yet made a sustained effort to address this global challenge. The crypto industry has focused on developing technologies and ecosystems, but not on creating effective tools for the development of digital social institutions. The TNS project is the first to create tools for such institutions.
We are aware that it is not enough to create a digital token that will be unfalsifiable and can play the role of an honest coin for settlements and capitalization of digital entities. It is necessary to create an institution of reputation, on the basis of which credit will subsequently arise. Credit will bind digital tokens into circulation, and the reputation of digital entities, manifested through the value of their names, will become the global market on which the token will circulate. And no violence! In the next article we will explain the mechanics of this process.
We strive to create a system in which the more people trust each other, the richer they make each other. Instead of the current system in which the more effectively one group exploits another, the richer it becomes at the expense of the other's impoverishment.
Would you say that this is a utopia? And we are confident that this is a return to normality at a new level of technological development. We are now at the beginning of this comeback. And whoever joins us now will naturally become a source of trust for those who follow him. A source of wealth for them and, as a result, for themselves.
TrustSpace
