From: Vincenzo lozzo

<table><tr><th>Sent:</th><th>Friday, July 18, 2014 9:34 PM</th></tr><tr><td>To:</td><td>jeffrey E.</td></tr><tr><td>Subject:</td><td>Re: "Money is not money"</td></tr></table>

cool, I'll buy it

On 18/lug/2014, at 17:32, jeffrey E. <jeevacation@gmail.com> wrote:

> yes, read the autobigraphy of money

>

>

- On Fri, Jul 18, 2014 at 3:25 PM, Vincenzo lozzo <lozzo.vincenzo@gmail.com> wrote:

> I thought a bit about this. Let me see if I understand what that =entence means:

>

> Money has no intrinsic value (even when it was linked to gold, the =ntrinsic value was debatable) , fundamentally the value is given by two =hings:

> 1) Wide acceptance as an exchange medium

> 2) Trust in the country that prints the currency

>

> On top of that there's a lot of anchoring and other cognitive biases =hat cause the currency to oscillate in value.

> So in a way, money is a very simplified legal contract between =ultiple parties that is ultimately both enforced and

backed by a =ation-state (the 'trust' in the nation-state acts as the collateral).

>

> Is this what you meant?

>

> If that's the case there are a few interesting consequences:

> 1) Paradoxically Bitcoin has more intrinsic value than nation-state

> =acked currencies. That is because mining bitcoins require natural

> =esources that are limited&useful and hence valuable

> 2) In this game (and I think by extension in the stock market game as

> =ell) deception plays a significant role. You can make a currency

> swing =f you can mess with the cognitive biases involved in the

> valuation of =he currency

> 3) At any given point in time you could replace any currency with =omething else as long as you can convince people that that something =Ise is both backed and enforced by a 'greater force' (in the bitcoin =ase, that would be cryptography). The easier it is to explain the =greater force' the easier the adoption of that 'something else'

>

> Now one obvious way to make money out of this would be to play the =eception/cognitive bias game. I think a lot of that is made illegal by =he various law against market manipulation, insider trading and what =ot.

> The question is: what is not covered?

>

> Obviously the other way would be to create another currency, own part

> =f it and then resell it once it appreciates in value

>

> Am I making sense?

>

> Vincenzo

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