Crypto lessons from Pratchett's Discworld

Tempt enough people to believe in crypto and watch trust in “real” money implode

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I'm a latecomer to Terry Pratchett, didn't pick pick up a single book of his until after he died. So I've only recently polished off the excellent Making Money, which set my brain whirring on the nature of money. For those who haven't ventured into Pratchett's Discworld, Making Money is about how a conman-turned-bureaucrat revolutionises the economy. After introducing stamps while head of the Post Office and seeing how they quickly become a form of currency, he sets out to replace the coin-based economy with paper notes.

The paper itself is practically worthless, unlike the gold or other metals used to mint coins, many of which cost more to make than the face value of the coins themselves. But what makes those bits of paper valuable is trust - confidence in the bank's authority, even though the bank itself is run by a confidence trickster named Moist von Lipwig.

"I read somewhere that the coin represents a promise to hand over a dollar’s worth of gold," Moist says to his chief cashier in the book, who replies: “In theory, yes,” adding, "I would prefer to say that it is a tacit understanding that we will honour our promise to exchange it for a dollar's worth of gold provided we are not, in point of fact, asked to."