Lyn Alden: How Money & Banking Work (& why they're broken today)

Step-by-Step Tutorial: Understanding Money, Banking, and the Global Financial System

Step 1: Understanding the Evolution of Money

• Money can be printed or lent into existence by corporate interests, bankers, or corrupt officials, leading to the dilution of its value over time.
• Different methods of trading goods have evolved from barter systems to credit systems and the use of commodity money like shell jewelry or gold and silver coins.

Step 2: Exploring the Role of Banks

• Banks play a crucial role in the financial system by managing reserves, issuing banknotes, and facilitating transactions.
• The fractional reserve banking system allows banks to lend out more money than they hold in reserves, leading to the creation of additional deposits and potential economic instability.

Step 3: Learning about the Global Financial System

• Central banks were established to mitigate the impact of banking crises and support governments during conflicts.
• The evolution of the global financial system has seen transitions from the gold standard to the Bretton Woods system and the current era of unbacked monetary systems.

Step 4: Introduction to Cryptocurrencies, Particularly Bitcoin

• Cryptocurrencies like Bitcoin offer decentralized digital alternatives to traditional fiat currencies.
• Bitcoin operates on a blockchain network, enabling secure and transparent peer-to-peer transactions without the need for centralized intermediaries.

Step 5: Considering the Future of Money and Banking

• The emergence of Central Bank Digital Currencies (CBDCs) and private stablecoins presents alternative paths for the future of money.
• Decentralized open-source technologies like Bitcoin offer a more transparent, deflationary, and user-governed monetary system.

Step 6: Exploring Opportunities for Financial Empowerment

• Open-source money allows individuals to hold, send, and transact freely, breaking down financial barriers and connecting people across borders.
• Understanding and embracing open-source money can lead to a more decentralized, transparent, and empowering financial system for individuals worldwide.

By following these steps, you can gain a comprehensive understanding of how money, banking, and the global financial system work, as well as explore the potential for decentralized and transparent financial solutions in the digital age.