The Money Paradigm

When money first came in to use it was decentralised, different localities or groups had different money and for centuries there were no banks as we know them. One of the first of these was set up by the Borgias in Florence and since then money has become more and more centralised with each country or nation creating its own ‘central bank’. This has continued in Europe where most of the countries in the European Union have chosen to use a common currency with a ‘Central European Bank’.

Money is now firmly centralised and under the control of national governments – but there are changes afoot. Recently there has been an introduction of ‘community currencies’ where a town, like Totnes in Devon in the UK, has set up their own ‘local’ currency, albeit based on the State currency, which can be used in participating shops and businesses to buy and sell goods and services thus keeping the ‘money#’ in the community rather than seeing it drain away ‘out of town’.

Other forms of decentralised money or ‘pseudo currency’ exist as ‘store points’ such as Nectar points and Avios (formerly ‘Air Miles’) which are given as rewards for purchasing goods or services from participants in the scheme and can be redeemed against further purchases. These are forms of money, but they don’t go near the governments, banks or tax systems.

Then we have ‘crypto’ – encrypted currency. Anyone can create a crypto coin or token and there are many use cases for these, some better than others, The majority of crypto coins are merely gambling chips but some, probably less than 10%, have ‘real’ use cases. We’re not going to cover the details of crypto or how it works here but in the Resources section there’s a 50 minute ‘Beginners Guide to Digital Assets’ which I recommend you take a look through at the end of this module. Digital Assets is a general term for crypto but really refers to ‘real’ assets which have been digitised.

Money is being decentralised through crypto which is owned entirely by the people who buy the coins using government money, taking the ‘ownership’ of this form of finance away from state control. Governments clearly don’t ‘like’ this as it dilutes their power and control over the population they are supposed to represent.

Eventually they will succumb to the principle of ‘if you can’t beat them join them’ but in the meantime creating a holding of decentralised digital assets is an important plank in building your wealth and personal freedom.