Bitcoin and the lost art of commercial banking

Florentine bank: gold coin deposit vs IOUs

“represented the peak of development for Western civilization in monetary matters. It facilitated commerce and made possible long-term accounting records that were meaningful rather than fictitious. Not only commerce between nations but also the great increase of useful capital was encouraged by the growth of savings institutions, life insurance, and pension funds”.

BlockFi founder Zac Prince says “we deliver these banking products, because we’re operating in a crypto first world, at a global and digital scale that wasn’t possible in a traditional banking context. … If we can build this new infrastructure starting from a blockchain and crypto first mind set, still bringing capital from that old world… we can deliver these products against bitcoin, that’s what we get really excited about.”

“While the US does not gain wealth by investing in means of production but in financial ways, China gains wealth the old-fashioned way, by producing it. And whether you call this, industrial capitalism or a state capitalism or a state socialism or Marxism, it basically follows the same logic of real economics, the real economy, not the financial overhead. So, you have China operating as a real economy, increasing its production, becoming the workshop of the world as England used to be…”

“The idea of capitalism in the 19th century… was to get rid of the landlord class. It was to get rid of the rentier class. It was to get rid of the banking class essentially…”

“[Today Americans] say that public investment is socialism. Well, it’s not socialism. It’s industrial capitalism. It’s industrialization, that’s basic economics. The idea of what, and how an economy works is so twisted academically that it’s the antithesis of what Adam Smith, John Stewart Mill and Marx all talked about. For them a free-market economy was an economy free of rentiers. But now [Americans wrongly assume that] a free-market economy is free for the rentiers, for the landlords and for the banks to make a killing. America has concentrated the planning and the resource allocation into Wall Street. And that’s the sort of central planning that is much more corrosive than any government planning, could be.”

As Unchained Capital´s Parker Lewis puts it, financialization is the “direct result of misaligned monetary incentives, and bitcoin reintroduces the proper incentives to promote savings. More directly, the devaluation of monetary savings has been the principal driver of financialization, full stop. If monetary debasement induced financialization, it should be logical that a return to a sound monetary standard would have the opposite effect.”

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