Fractional Reserve, Base Money & Bitcoin with Matthew Mežinskis - WBD542

Matthew Mežinskis is the creator of the Crypto Voices podcast and
Porkopolis Economics website. In this interview, we discuss the
definition of money, the importance of credit and fractional
reserve banking, and how “not your keys, not your coins” equally
applies to bank deposits.


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WBD528, “Everything You Know About the Economy is Wrong with Jeff
Snider”, was one of our most discussed shows of recent months.
Jeff presented a number of challenging and yet fascinating ideas,
that have now spurred a second interview responding to some of
the issues raised.


A principle issue was Jeff’s assertion that the system lacks
understanding and control. When asked whether he could define
money Jeff replied “No, I actually don't. That's I think that's
the general problem. Even the Federal Reserve or central banks,
economists, they can't define money either.”


Matthew Mežinskis respectfully disagrees: he thinks that there
are tried and tested specific definitions that make money
comprehensible to all. Matthew promotes the idea that money is
chiefly a medium of exchange, and that there are two distinct
types of money: base money that confers ownership, and fiduciary
money which is a claim for ownership.


Further, Matthew is of the opinion that, whilst criticism of the
Fed is valid, it isn’t the ignorant and inefficient organisation
some portray it to be. From this cascades a series of additional
opinions that are at odds with the mainstream narrative within
Bitcoin circles: credit is a natural means of human interaction,
that has enabled civilisations to flourish; whilst fractional
reserve banking is a necessary part of capital allocation within
the economy, and cash use continues to be vibrant.


And yet, in line with the truism that Bitcoiners are a broad
church, Matthew is a strong advocate for Bitcoin. He sees that it
promises real improvement to the current economic system. He just
sees it through a different lens. In this worldview is Bitcoin an
evolution rather than a revolution?