Lyn Alden: Bitcoin vs Traditional Banking

Centralized monetary systems evolved to improve transaction efficiency, yet this shift introduced systemic risks, including fractional reserve banking and chronic inflation. By centralizing reserves, institutions gained the ability to bail out large entities while devaluing the currency, which disproportionately harms wage earners and concentrates wealth. This inflationary environment creates a "unit bias" that forces individuals to chase yield, sacrificing privacy and financial autonomy. Contrary to conventional economic narratives, deflation is not inherently detrimental to growth; historical periods of sound money, such as the late 19th-century United States, demonstrate that productivity gains can naturally lower prices without stifling consumption. The current reliance on debt-based monetary policy necessitates inflation to prevent systemic collapse, whereas an equity-based system could accommodate deflation, allowing technology and productivity to drive value rather than currency debasement. Bitcoin offers a potential mechanism to restore sound money principles and mitigate these structural inequities.