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@ BITCOINSAFARITZ
2025-04-29 07:23:48
Yesterday’s Proof of Work Monday session was an enlightening journey into the foundations of modern money. Led by our educator Tochi, Chapter 4 Part 1 of the Bitcoin Diploma course delved deep into the question: “What is money, and who controls it?” The session provided students with a comprehensive understanding of the evolution of money and the systems that govern it today.
Tochi began by exploring the concept of fiat money—currency that holds value not because it is backed by a physical commodity like gold or silver, but because governments decree it as legal tender. This shift from commodity-backed money to fiat currency marked a significant transformation in monetary systems, allowing central authorities to exert greater control over the money supply.
The discussion then moved to the monetary system by decree, highlighting how governments and central banks manage national currencies. This system enables authorities to implement monetary policies that can influence inflation, employment, and economic growth. However, it also raises questions about the concentration of power and the potential for misuse.
A critical part of the session focused on fractional reserve banking—a system where banks are required to keep only a fraction of their depositors' funds in reserve, lending out the remainder. This practice effectively allows banks to create money through lending, expanding the money supply beyond the actual physical currency in circulation. While this system supports economic activity by providing loans for investment and consumption, it also introduces risks such as bank runs and financial instability if not properly regulated.
Tochi's engaging teaching style and in-depth explanations helped demystify these complex topics, fostering a lively discussion among students. By examining the history and mechanics of our current monetary systems, participants gained valuable insights into the forces shaping our economies and the importance of financial literacy in navigating them.
Stay tuned for our next session, where we will continue to explore the intricacies of money and its impact on society.
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