The Bitcoin Standard Podcast 284. The Fiat Standard: Lecture 3 - Fiat Technology
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Jul 29, 2025 Discover the fascinating mechanics of the fiat monetary system, where debt fuels money creation and wealth is subtly devalued. Dive into the monopolistic influence of central banks, questioning their role in a free market. The discussion challenges the necessity of state-controlled currency and explores how competition could thrive without central intervention. Additionally, the contrast between centralized fiat and decentralized currencies like Bitcoin highlights the innovative aspects of money creation.
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Fiat Definition and Origins
- Fiat money is a compulsory, centralized debt-based network monopolizing financial services globally.
- It emerged to manage government defaults on gold obligations, not to optimize user transactions.
Lending Creates Money in Fiat
- Banks create money by issuing loans rather than lending out existing deposits.
- Loan-created money lets buyers possess goods without present goods being sacrificed, externalizing risk to society.
Fiat Network Topography and Control
- The fiat monetary network consists of central banks and private banks operating a centralized ledger.
- The U.S. Federal Reserve acts as the master node controlling validations and participant inclusion.
