3- our monetary system

We previously established that money is an incredibly important part of our lives; it is, in fact, the very fabric of our civilization.
However, I regret to announce that our money does indeed belong to a corrupted, unjust system.
Let’s expose and uncover why that is, and what the consequences for the average person are.
This is an obligatory step: we can’t really introduce Bitcoin without first coming to terms with an uncomfortable truth.
Get ready to hear some unsettling facts about money and banks!

The woes of the Fiat system

“FIAT”: a term you’ll come across countless times. Please, get accustomed to it.
It’s a Latin word, and it translates to “by decree”— it describes anything that’s imposed, and anything that, willingly or not, we must use or obey.

In this case, fiat refers to the monetary system we have to comply with; where some higher authority has, by decree, decided that we can only exchange goods and services by using a particular currency, or form of money.
You don’t really have a choice there. You have to use your country’s currency; simple as that.

Or so you thought. Yes, using fiat is unavoidable, but there are ways to, at least partially, get out of the system. A system that’s specifically designed—and I am not exaggerating— to keep you poor.
That’s why you are here: to learn about a currency that defies all “decrees”, one that operates independently from any government or central authority.

The issue is that most of us never get to the point where we really question money.
We just accept it: we follow the rules, and we keep walking our path, blindfolded and tragically unaware of our dire financial environment.
Be honest with yourself, and let me ask you something: have you ever seriously, deeply thought about money?
Why are you holding a piece of paper with a “10” printed on it? Who decided it has any value at all? And why does its “value” seem to decrease every year? Why is that $10 bill not buying me the same amount of goods compared to last year? Why can’t I seem to afford anything these days, while my savings are crumbling?

Don’t worry. I have never done that either. Before Bitcoin, I was essentially a financial illiterate. I had no knowledge about what money actually was, how it worked, and, most importantly, how bad the system is.
But my eyes are now open, and soon yours will too. And once you see it, there’s no going back: you can’t unsee it.
That’s when you are ready to fully embrace Bitcoin: the best form of money humanity ever created.

A dirty business

“Fiat currencies”, it goes without saying, refer to all of the state-issued currencies such as the Dollar, the Euro, GBP, Yen, Pesos, and so on.
Their names may be different and unique, but they are essentially the same product, and they share the exact same fundamental issues: they can be produced at will, they depreciate year after year, to the point of total collapse and, notably, they don’t have any real value.
That bill you are holding? That’s worth “10”. Why? Who said that?
Oh, yeah. Your country’s central bank said so, by decree.

Now, please, I want you to think about your two most valuable assets.
No, I’m not talking finance. What are they?
Time and energy.
The former: an irreplaceable and limited currency that, once spent, is never coming back. The latter: your life force, quite literally.
These are invaluable resources, and we must treasure them as much as possible.
Ok—now tell me: how do you, for the most part, spend your two most prized assets?
Yes, by working! And why do you go to work, organizing your whole life around it?
That’s right: to earn money.
See? I wasn’t joking when I said money is the actual foundation of the world we live in.
For good or for ill, you are forever tied to it.

And so, this is what the equation looks like: you trade your time and your energy providing a service for someone who, in turn, rewards you with a form of money whose value decreases dramatically. The result?
Your life becomes harder, your labour is devalued year after year, and you essentially get poorer by the day.

If that was your work contract, would you sign it?
Before you proceed, it is imperative that you let this concept sink in.

As new currency enters circulation, products naturally get more pricey

Inflation: the root of all evils

So how is it that fiat currencies keep losing value over time? Am I being overly dramatic? No, my friend. This ain’t a conspiracy theory—this is, in fact, public knowledge.
Banks, governments, and financial institutions aren’t even trying to keep it secret or to hide it, and they operate in plain sight. They rely on the population being too lazy to realize they are being robbed.

You are, of course, very familiar with the word “inflation”: a notorious, almost ethereal term.
You have a rough idea of what it is, but…have you actually ever dug deep into it?
Inflation is that process where a currency’s total supply keeps increasing, thus “inflating” the number of circulating units.
This may look innocuous, almost innocent. After all, we do need new money to be added to the economy, right? Right?!
What happens then, when central banks decide to switch on the “big printer”?
It’s pretty simple, really: prices go up. If more and more Dollars are chasing the same amount of goods, their price will naturally increase.
We don’t need a degree in economics to understand it.
This is inflation. On the surface, there’s not much to it. New money is constantly and recklessly being created, and products keep getting more expensive.
In this process, we are not physically losing money, of course—what happens, however, is that our currencies’ “purchasing power”, or value, decreases.
That $10 bill is likely going to buy less stuff, next year. And the one after. Repeat the process, and you can see how big of a problem this is.

Traditional finance, the fiat system, thinks that a healthy rate of inflation is actually good for the economy. Central banks are in charge of the money printer, and they control inflation levels.
Yes, a small group of men, wearing fancy suits, have the authority, from their offices up in their ivory towers, to decide and manipulate the value of the money you are, by decree, being forced to use.

Wars, geopolitical tensions, weak job data, a stagnant economy, uncertainty, a global crisis: each one of them is the perfect excuse to mint some shiny, new dollar bills, and further dilute the circulating supply.

And thus, as our currencies keep depreciating, our lives become increasingly unaffordable. On top of that, the wage you are earning mostly stays the same, being greatly outpaced by inflation.
And boom! The domino effect is triggered: your finances get ugly, your hope dwindles, and your mental health takes a turn for the worse.
This is how fiat money makes you miserable.
You may not directly link your problems to money, but that’s only because you are unaware of your situation. Trust me, most of your issues are indeed related to it.

Grab those notes before they inflate and melt away!

You struggle, they get richer

Inflation is a scourge—it’s literally eating up your money, day after day. What’s even more infuriating is that not everyone gets to experience it the same way. For a small group of selected few, inflation isn’t really a thing.
When Bitcoiners say the system is “rigged against you”, this is what they are talking about.

It’s called the “Cantillon effect”, and it describes the phenomenon where those who are closer to the infamous money printer aren’t affected by rising prices and currency inflation.
You see, inflation doesn’t happen overnight; when new money is released into the economy, the loss of its purchasing power is gradual, not instant. The effect is delayed, and it takes time before it fully takes place.
See the picture above for reference.
Banks, governments, agencies, big corporations, the ultra-rich, financial institutions.
These entities have the privilege of being close to central banks, who have the authority to produce money. As this happens, the freshly minted currency is first distributed to the aforementioned people.
They get to grab a whole lot of money as soon as it’s made and, crucially, before inflation happens.
By the time the new money supply gets to your hands, and those of the average person, it’s already too late, and the fiat system has won. As the script dictates.
Who loses?
Bad news: you have lost. We have lost.

Currency debasement

Enough talking—now let’s see some real numbers, so that you can get a visual understanding of how bad things are. The following data was released/confirmed by the IMF, together with EU banking agencies. You can fact-check yourself, if unsure.
A study conducted in 2012, in which 775 fiat currencies were examined, showed that, on average, their lifespan only amounts to 28 years.
-20% failed and collapsed under “hyperinflation”.
-20% of them were destroyed by war.
-13% were replaced after “their” country gained independence.
-Many were redesigned, merged, replaced, or outright disappeared.

Of course, some fiat currencies are stronger than others, and they last much longer. Those used in richer countries are obviously more resilient, but the truth remains: they are, sooner or later, all doomed to fail, as history tells us. It’s just a matter of when, not if.

Let’s look at the US dollar, for example.
The “world’s reserve currency”.
Wow, that’s quite the status, isn’t it? You would think the dollar is an incredibly strong form of money, but is it?
The dollar was created, together with the Federal Reserve, in 1913.
It has, since then, lost about 99% of its value.
Just to give you an idea, a product that cost $1 now would cost $30.
Ouch.
Is 1913 too far back? Fair enough. How about 2020? Let’s see.
How much purchasing power have various currencies around the world lost to inflation since then? This is what debasement means: the unstoppable and inevitable destructive action of inflation resulting, ultimately, in the demise of a particular currency.

-US Dollar: -25%
-Euro: -25%
-British Pound: -30%
-Canadian and Australian Dollars: -22%
-Japanese Yen, Chinese Yuan: -12%

Pretty depressing, right? Keep in mind, these are supposed to be the most solid currencies on the planet!
Moreover, these are only the “official” numbers: many believe that “trueflation”, the “real” inflation rate, is significantly higher.
Next up, some of the worst performers—the ones that have lost a ton of value in just a five-year window.

-Venezuelan Bolivar: -99%
-Argentine Peso: -97%
-Lebanese Pound: -91%
-Turkish Lira: -80%
-Naira (Nigeria): -67%
-Cedi (Ghana): -60%

The list goes on.
Now, are you beginning to understand how severe the implications are? And how bad money actually messes everything up? Think about it.
As an American or a European, you would have “lost” a quarter of your money in just five years! Isn’t it crazy? But as a Venezuelan or an Argentinian citizen, you would have literally watched all of your savings vanish and collapse under inflation. That’s devastating.
No matter where you live, no one is safe. First-world. Third-world. Fiat money is dying.

Bank are not safeguarding your money. They are literally using it to make profits.

Banks: not your friends.

We just destroyed fiat’s reputation, and we aren’t even done.
Now—we can’t leave banks out of the picture. After all, they are the embodiment of the fiat system.

Realizing your money is fundamentally worthless, corrupted, manipulated, and on its way to its eventual demise, that’s bad enough.
But then, as the full horrors of the banking system unravel, that’s like adding salt to the wound.
Let’s talk about ownership, and about how banks are essentially in control of your hard-earned money.

Do you think the money in your bank account belongs to you? After all, it bears your name. And you worked for it, right?
Think again.
That’s all an illusion, and none of that money is actually yours, in legal terms.
When your employer pays you, and they send, say, $1000 to your account— where do you think that money goes?
If you are under the impression the bank is holding, safeguarding, or keeping your funds for you, so that you can use them as you please, you are grossly mistaken.
No, that money isn’t stored in a secure vault, waiting for you to access it on your own free-will.
As soon as those $1000 have been sent to your account, the bank immediately becomes the legal owner of that money. You, in turn, become a “creditor”: someone the bank is indebted to.
In this case: you don’t own $1000. The bank owes you $1000.

What happens to my money, then? What’s the bank doing with it?
They are making massive profits—that’s your answer.
And it’s quite simple: they take your money, they lend it to someone else, and they charge interest rates on every single loan.
Rinse and repeat, ad infinitum, and you can see how these institutions are making stellar profits each year.
Yep, you (and I) are part of it: we are actively helping them make billions, by quietly consenting to our money being used for their own gains.

If I wish to access my $1000, how does that work, in reality?
The bank isn’t “letting you use your money”, but rather, it’s “giving you back the $1000 it previously stole from you”.
In practical terms, there’s not much of a difference. You still get your $1000. But see how they subtly operate, how they sneakily manage to control you without you even knowing? That’s high level stuff.

Not only is this ethically and morally wrong, or at least very questionable—it’s also dangerous: banks are extremely powerful institutions, as they are essentially the arm of the government. They have complete authority over the money you earned.
Banks have the ability to entirely freeze your account, rendering you unable to access your funds. They can limit and control the amount of cash you withdraw. They can track every single move you make, as all of your transactions are traced and recorded.
Not to mention they can collapse and, quite literally, go bankrupt. If that happens, good luck: you probably won’t ever see your money again.

You don’t necessarily have to be a convicted criminal to have your account blocked. There are several instances where they can decide to do just that and, needless to say, making your life an absolute nightmare.
Are you a politically exposed individual? An activist? An outspoken journalist who isn’t the government’s best friend?
Are you someone who, despite being innocent, is under some sort of investigation? Have you been unjustly accused of wrongdoing?
Do you owe tax debts? Unpaid bank fees? Do you use your money for “suspicious” activities? Have you over-drafted?

Yes, your bank may deny you access to your money if you fall under any of those “categories”. That list goes on, of course.
And there are several authoritarian countries where you can be “de-banked” for much less.
Take China as an example: when, for any reason, your social score is too low, you may be prevented from making payments.
Any sort of payments. You could become unable to pay for a train ticket, for your bills, or for your groceries.
This goes to show how fiat money can even be used as a tool for control and subjugation, in extreme cases.
When you surrender your freedom to your government, by consenting to have banks own your money—you are putting yourself at risk. Your country may be a democratic one, sure. But don’t be too naïve, and think you are immune to such things.
Go ask the Canadian truckers, for example.

Behind the scenes of an international bank transfer

Even moving your money can be quite the hassle—the fiat system truly is bloated, overloaded, and unnecessarily complex.
When you initiate a transaction, the process is not as straightforward as you may think.
The transfer must be approved, before it goes through. It is subject to someone’s scrutiny. Several third parties, people, and entities are involved in each transaction. They have the power to approve it, deny it, or delay it. You are required to pay fees. You must patiently wait, as well; banks do not operate during weekends, holidays, or after a certain time each day. What a mess.

I once tried to move all of my savings at once to a new bank account.
My transaction was immediately denied. I was left wondering and worrying for an entire day, before I received a call from the bank.
The person on the phone forced me into an hour-long conversation, where he tried to dissuade me from changing banks. He asked all of my personal details, the reasons for my decisions, and he even invited me to a face-to-face meeting.
Of course, he didn’t really care about me. The bank tried their best to keep me as a client, so that they could continue lending away my money for their own profit. Now that I wished to move all of my funds, they were forced to fulfil their debt, and pay me back.

Transferring fiat overseas is an even bigger problem. Ask any “expat” who’s ever tried to send money to their families: lengthy waits, hefty fees, and having to rely on multiple apps, services, and, ultimately, people.
Oh, and currency exchange rates too.

We can sum it all up with the word “centralized”. This will come in handy, because, as you’ll see, it’s the exact opposite of what Bitcoin is.
The word is not inherently negative per se. However, it certainly carries some less-than-positive connotations.
It describes a vertical power structure, similar to a pyramid where one, or very few individuals are at the top, ruling and making decisions.
The 99%, the masses, us, is at the bottom, and it’s subject to their laws.
It perfectly applies to fiat money. And how good can that be?

Plant the seeds for a brighter future now—it’s never too late.

The light at the end of the tunnel

The journey through fiat’s shenanigans is almost over, don’t worry.
This is where I come to the rescue, and where I present you with an alternative. I hope I made it abundantly clear: our monetary system is an absolute shit-show, and you must find a way out.
Coincidentally, you are now reading a Bitcoin guide, what are the odds?!
Jokes aside: yes, Bitcoin is the way out, as we will go on to explore soon.

Look at any person who’s financially savvy, or anyone who became wealthy. Notice how they all got there by not saving in Dollars?
Rich people don’t own fiat. Well, they do, but not much at all. Have you observed how, when talking about them, the questions isn’t “how much money do they have?”, but rather, “what’s their net worth?”
This expression describes the total value of someone’s financial assets.
These people, instead of accumulating worthless dollars or Euros, decided to acquire assets—products that, over time, greatly increase in value. That’s how you escape inflation.
Gold, silver, real estate, land, stocks. And now, of course, Bitcoin.

This seemingly complicated tactic is the key to financial freedom, and the sooner you understand it, the better. Having your wealth stored in Fiat is the best way to end up poor. You must make an informed decision, and change the way you save A.S.A.P.

I know what you are thinking. “But I’m a working-class person. I will never become rich. Therefore, I don’t see the point.”
Fair enough, let’s scale it down a notch.
Change your perspective from “rich” to “financially stable”.
Ask yourself: “can I create a life where I’m a little more secure and less worried about my finances? A life where I’m not constantly stressed about my future? Can I achieve that by ditching “paper money” and embracing a new system?”

The answer, my friend, is a resounding YES.
You can absolutely get there. Even if you don’t think you have the means to do that now. All you need to do is to make a serious commitment, shift your view to the long-term, and get on your Bitcoin journey: study it, explore it, and grow a strong conviction. That’s how you can change your life.

You have just been shown how the game is set up against you. But what if I told you there is a cheat code, a tool you can use to free yourself and escape the system?
What if I told you there is a currency, a form of money out there, that since its inception in 2010, has grown in value more than a million percent ? And what if it just so happened to be the best performing financial asset in recorded history?
Would you not want to adopt it? Would you not want to use it to get out of the financial hell-hole in which you are drowning, thus reclaiming your right to a better future?
Yes, that’s Bitcoin for you!

We are nearly there. We are almost ready to start exploring Bitcoin, finally. But first, we must attempt to answer a fundamental question.
A question which had intellectuals wrestle with their minds for decades, if not centuries.
I defined Bitcoin as money, more than once. But how can that be? Bitcoin is digital! Money is physical.
Is it, though?
That’s exactly what we’ll discuss in the next chapter.
I’ll leave you with that question. Think about it, before you keep on reading.
”What is money?”