Here is a recap of @MacaesBruno excellent Devcon talk: Why Only Virtual Money Is Real Money. Or, as I interpreted it: The Fight For Outside Money (and the case for L2's as sound monetary policy). 1/14

How do we think about money? Money is perceived as a physical entity (when we imagine $ we think physical bank notes). But most money is not physical, it exists as entries in a DB. Money can be created at will with keystrokes from a computer. 2/14

Money, thus, isn't "real". It's virtual. People became acquainted with this in 2008 when QE was implemented to save the financial system. OR Russias Central Bank reserves were cut off from the world as a weaponized use of digital money. 3/14

If money exists as entries in a DB, it is controlled by someone and has the potential to be manipulated The money within the system (Fed reserve system) exists as 'Inside Money'. It's issued in the form of debt. 4/14

Credit/debt exists on the trust to pay it back. Even bank deposits are a promise for the bank to pay you when demanded (you don't own the deposits). Is there an alternative? Can you access or own 'Outside Money'? 5/14

For centuries, Gold has filled that role. Gold has the property of "no one owes you anything" - you own the asset. BUT It has holding / transport costs AND isn't programmable to adjust to economic circumstances. 6/14

Ben Bernanke (2004) said: "By allowing persistent declines in the money supply ... the Federal Reserve ... greatly destabilized the U.S. economy (in the 20's & 30's)" Not expanding the money supply in 20's/30's exasperated the Great Depression. 7/14

Regardless of your thoughts on Bernanke, a money supply should be dynamic to the economies needs. But, it creates a tension. We want a money that cannot be manipulated by those in power (real $) but also dynamic to the needs of an economy (virtual $). 8/14

Bitcoin and Ethereum exist as real money, in that if you own a private key with a balance, you own the coins. Ethereum ALSO exists as virtual money as it provides a layer of elasticity to be able to expand according to circumstances. 9/14

Layer 2's act as a mechanism for monetary expansion. In times of expansion, all forms of money remains the same, wETH == ETH. In times of contraction/discipline, people can retreat back to the original asset (ETH). 10/14

The difference between the current & Ethereum's system? The mechanism of control. The expansion/contraction of L2 money is created by individual agents acting in their own interest while presently a central authority determines supply. 11/14

The question is, what form of monetary governance gives us better results? Either way, Bruno makes the convincing case for the NEED for Outside Money that is programmable to a systems needs. 12/14

A final interesting point that was brought up: ETH is produced or burned based on it's service to the system. ETH is in service of the network, while the network is in service of BTC. 13/14

This last point was an 'ah-ha' moment as it fundamentally expresses the values of the network & the type of people they attract. I hope this thread was helpful. 14/14

Here is a recap of @MacaesBruno excellent Devcon talk: Why Only Virtual Money Is Real Money. Or, as I interpreted it: The Fight For Outside Money (and the case for L2's as sound monetary policy). 1/14

How do we think about money? Money is perceived as a physical entity (when we imagine $ we think physical bank notes). But most money is not physical, it exists as entries in a DB. Money can be created at will with keystrokes from a computer. 2/14

Money, thus, isn't "real". It's virtual. People became acquainted with this in 2008 when QE was implemented to save the financial system. OR Russias Central Bank reserves were cut off from the world as a weaponized use of digital money. 3/14

If money exists as entries in a DB, it is controlled by someone and has the potential to be manipulated The money within the system (Fed reserve system) exists as 'Inside Money'. It's issued in the form of debt. 4/14

Credit/debt exists on the trust to pay it back. Even bank deposits are a promise for the bank to pay you when demanded (you don't own the deposits). Is there an alternative? Can you access or own 'Outside Money'? 5/14

For centuries, Gold has filled that role. Gold has the property of "no one owes you anything" - you own the asset. BUT It has holding / transport costs AND isn't programmable to adjust to economic circumstances. 6/14

Ben Bernanke (2004) said: "By allowing persistent declines in the money supply ... the Federal Reserve ... greatly destabilized the U.S. economy (in the 20's & 30's)" Not expanding the money supply in 20's/30's exasperated the Great Depression. 7/14

Regardless of your thoughts on Bernanke, a money supply should be dynamic to the economies needs. But, it creates a tension. We want a money that cannot be manipulated by those in power (real $) but also dynamic to the needs of an economy (virtual $). 8/14

Bitcoin and Ethereum exist as real money, in that if you own a private key with a balance, you own the coins. Ethereum ALSO exists as virtual money as it provides a layer of elasticity to be able to expand according to circumstances. 9/14

Layer 2's act as a mechanism for monetary expansion. In times of expansion, all forms of money remains the same, wETH == ETH. In times of contraction/discipline, people can retreat back to the original asset (ETH). 10/14

The difference between the current & Ethereum's system? The mechanism of control. The expansion/contraction of L2 money is created by individual agents acting in their own interest while presently a central authority determines supply. 11/14

The question is, what form of monetary governance gives us better results? Either way, Bruno makes the convincing case for the NEED for Outside Money that is programmable to a systems needs. 12/14

A final interesting point that was brought up: ETH is produced or burned based on it's service to the system. ETH is in service of the network, while the network is in service of BTC. 13/14

This last point was an 'ah-ha' moment as it fundamentally expresses the values of the network & the type of people they attract. I hope this thread was helpful. 14/14