Fiat Matrix Disconnect

A universal scheme for understanding incentive systems in cryptocurrency and fiat networks - part 2. (First partarticles here).

Prologue

France, XVIII century

This section contains a large number of citations from several sources (1,2,3,4[all – English]), arranged by the author in order to give coherence to the narrative. (author's note)

«Low's system attracted not only the richinvestors. Representatives of all levels of French society rushed to take part in it. Coachmen and cooks made millions of dollars in a matter of days. Trade was concentrated on the small Parisian street where John Lowe lived, rue Quincampoix. Every day crowds of people gathered there, shouting the buying and selling prices of shares of the Mississippi Company (later it became known as the Company of the Indies, French Compagnie des Indes) and making deals right on the spot.

Figure 0: Global Trade on the Mississippi River (source)

John Law was the author of the new fiscal andmonetary system. He convinced the French government to allow him to open a bank with the power to issue paper money, or banknotes, and collect taxes. [His venture was supported by the governor of Fort St. George in South India, Thomas «Diamond» Pitt, who made his fortune by smuggling the Regent's diamond out of India and subsequently selling it to Philip II, Duke of Orleans.] It seemed that John Law's paper fortune, created by transporting 6,000 settlers and 3,000 slaves to the French colony of Louisiana, simply canceled out the normal rules of economic life.

However, Low's money theory was incomplete. He lost sight of the effect that the issue of millions of shares would have on the money supply and, consequently, on the inflation rate. Low continued to issue more and more banknotes to fuel consumer demand for the company's stock. After the company was located, the number of banknotes and coins in circulation increased by 186%. Prices rose 23% per month.

Figure 1: A restless investor group at the ryu Kenkampua in Paris (source)

John Lowe lost control of his ownsystem. He proposed gradually, over the course of several months, to reduce the value of shares in companies by 50%. Speculators immediately began to sell them. The most intelligent and enterprising have already managed to leave France and bought up precious metals and stones for the proceeds. Others, in search of liquidity, bought mainly land. To support the rapidly falling price, Lowe opened a company office, buying up its shares at a fixed price of 9,000 livres. The bank also purchased quite a large number of them, and the number of banknotes in circulation increased by another 600 million. However, banknotes also lost confidence in the eyes of people: many now exchanged them for gold and silver coins.

To protect the bank's metal reserves there wasA ban on the accumulation of cash has been introduced. The price of gold and silver soared and their export was banned. Lowe's company was given permission to conduct searches of private residences and confiscate any precious metals found. The transportation of pearls, diamonds and precious stones was also banned and punishable by huge fines and confiscation. Silver was banned and there was a strict weight limit. And this is where we end this story. There were also nasty riots on the streets of Paris, in which dozens of people were crushed in crowds of depositors desperately trying to withdraw their coins from the not yet closed banks. It took France more than one generation to recover from the consequences of this collapse.

Figure 2: John Lowe's system, the forerunner of the fiat system

Nowadays

The era that began in the 1960-1970s., after the abolition of the gold standard, it is customary to consider it as a scientific innovation, which allowed the modern world economy to scale after the Second World War and to avoid a recurrence of the Great Depression.

Figure 3: The planes of the monetary system (: F. Betz, T. R. Anderson, and A. Puthanpura. “Currency flow in an economy: India’s demonetarization event,” part 08, pp. 476–484)

As I already wrote inprevious articleprevailing system designThe national network relies on the use of a custodial bank loan scheme to represent a single combined monetary and currency plane. This custodial bank loan system is then presented to network users as money in the form of bank deposits and physical banknotes. Trading network contracts, including financial instruments, rely on the supply and demand equation for these bank loans to (a) measure the perception of value units and (b) establish relative price signals for goods and services.

Figure 4: The gradual conversion of currency notes into money

Then the management levels of a single monetary andthe currency plane is manipulated with the perception of value units and relative price signals for goods and services in order to influence the cognitive process and control user behavior in order to achieve the target result.

Figure 5: Mechanisms for influencing the perception of value units and relative price signals in the fiat monetary plane

A curious feature of the fiat planemonetary system consists in adjusting the volume of foreign currency in it is considered as a mechanism to achieve the targets set by the level of management. In particular, the possibility of manipulation by interested parties of the currency supply volume is considered in this model as a function, and not as an error that violates the interests of network users. The benefits provided by this model are as follows:

Figure 6: Canonical management narrative of the modern Fiat protocol

Next we will explore:

1. whether the fiat model has achieved control of its goals according to certain criteria;
2. built-in operational logic of the model;
3. the impact of this embedded operating logic on network users; and
4. Does the cryptocurrency open consensus model adequately answer the questions raised by the fiat model?

Then, armed with the answers received to these questions and the conceptual scheme of Nakamoto, we will try to better understand the topology of fiat and cryptocurrency networks at the level of design of incentives for their participants.

And I propose to start with a kind of conceptual designer.

Chapter 5: Let's Play with the Designer

Figure 7: Incentive Design Constructor

Imagine Amazon introduces a new rule,according to which all users, instead of US dollars, must use some kind of Amazon credits to access the platform and make purchases. Imagine also that these credits could only be obtained directly from Amazonand usingAmazon credits.Users are left with two options: switch to another platform that does not require the use of Amazon credits, or find a way to obtain the Amazon credits needed to use the service.

Figure 8: The initial relationship between Amazon and users

Now let's assume that, in addition toopportunities to impose the use of own loans to all its customers, Amazon also has the ability to prohibit anyone from providing similar services. As soon as they enforce this ban, users will have no choice but to use Amazon.

Figure 9: Amazon pushing network updates to help users

 

Figure 10: Amazon pushes another network update to help users

Since users no longer have the opportunityuse other services, they are forced to look for a way to somehow get loans from Amazon. Amazon, on the other hand, solves the chicken and egg problem with its own hands by introducing a lending service. This allows users to take loans on Amazon loans and use them to access the service. But since these loans were received in the form of a loan, they must be repaid in due time.

Figure 11: Amazon introduces a lending service so that users can access its services

But what if users don’t have enoughloans to pay off debt, because they spent part of them on using the service? This is problem. In this case, users can borrow money from friends, do some work in exchange for them for other network users, or even, in extreme cases, transfer assets to Amazon, the cost of which will correspond to the cost of loans that they owe. But will they ever be able to free themselves from debt after this wheel began to spin.

Users essentially endlesslya cycle when they have to pay for a service using the same service, but since they cannot do this and they have no other choice, they are forced to take loans and create a debt burden for themselves. That is, in order to pay off their current debt, they are forced to issue a new loan. Users fall into the Moloch trap, which consists of a third-party enforcement rule, forced network updates, and a debt-based incentive system, which I described in a previous article.

Figure 12: Amazon Cloud Service with our specific settings

The current fiat money system is nothingThe key hidden prerequisites for the fiat money incentive structure are: money (1) exists in the form of debt in the form of currency notes and (2) is imposed on users as a common standard through the state’s monopoly on violence. This is a very important observation, which is often ignored by most researchers. And even those who could subscribe to this statement may well not have a clear understanding of the consequences of such a structure for network users over time.

«The main problem with conventional currencies isthat their work requires trust. Users are forced to trust central banks not to act to the detriment of the relative value of the currency they manage, and the history of fiat currencies is littered with examples of violations of this basic trust. Users are forced to trust banks to store and electronically transfer their money, but they use users' money to issue loans, leaving only a small part of it in their accounts and provoking waves of credit bubbles. We are forced to trust them in matters of confidentiality of our data - that attackers will not be able to use our personal data to withdraw money from bank accounts,–Satoshi Nakamoto.

Indeed, as I already said in the chapter onforced network upgrade of the first article, the «money» held by banks was never our money in the first place. This money exists in the form of debt, like a bank loan, whichforciblyimposed on users by the management level of the fiat system.

Figure 13: Fiat money as a network service

The fiat system redefined money, turning it into a network service that delivers currency units to the system.This service is run by a monopoly thatforces users to take out loans in currency units and then pay fees for using them in the same currency units. The network and its participants are simply left with no choice but to use this service. As the number of network users and their activity grows, they borrow more and more currency units, and the total debt of the system continues to grow.

Figure 14: Cycle of the modern fiat system

Figure 15: Flow Dynamics in Fiat Structure

Chapter 6: Revising the Canonical Narrative

6.1 Triangle of Moloch

Figure 16: The Triangle of Moloch

The canonical narrative of the existing fiat system consists of three parts.

First part

Before the creation of the Federal Reservethe dominant forms of currency were private banknotes - bills - issued under state license by commercial banks, public credit unions, and even trading companies. The technological limitations of paper banknotes and the lack of their digital equivalent meant that the issue of these banknotes and the exact reflection in the register of their use was problematic. This served as an excuse for conducting third-party authorization of forced network updates and imposing on a fiat network users a single unipolar currency provider. Thus, the modern paradigm of central banking in fiat systems was created along with the Federal Reserve to provide further forced updates to the network.

Figure 17: The Search for Truth

Second part

Expanding the central control paradigmmoney was seen as a recipe against the recurrence of the Great Depression, when price volatility, loss of purchasing power, reduced economic activity, more frequent cases of confiscation of assets and the lack of an adequate supply of foreign currency - all this led to catastrophic losses for users of the state network. Fear and the need to prevent a recurrence of this situation created the context for centralized control of the money supply by a third-party vested in power.

Figure 18: Searches for meaning (sources: 1, 2)

The third part

The paradigm of central banking in the fiat systemNow allows you to create money through a centrally controlled bank loan offer. Money for network users took the form of debt and issued in the form of a centrally controlled loan offer. But it was still necessary to adjust the total supply of foreign currency to match the market supply and demand for goods and services. It was argued that the possibility of adding to the network on an ongoing basis a larger volume of bank loans for users would contribute to greater economic activity of the network. The gold standard began to be seen as an obstacle to achieving this goal, and it was completely abandoned in favor of a debt-based incentive system.

Figure 19: Search for control (sources: 1, 2)

Various bank lending mechanismswere used to unilaterally correct the money supply and stimulate network activity to achieve certain political goals. This process of centralized management of the supply and demand equation in relation to bank loans and regulating the flow of currency units in the system was presented as a function that would benefit users by stabilizing their purchasing power and market prices. Let's dwell on this topic in more detail, returning to the basic principles and recalling the difference between real value, perceived value and a signal of relative price.

Figure 20: Fiat system as transformations of the Moloch triangle in the Low system

6.2 Price and cost

Real value is a measure ofsignificance assigned to various goods and services. A relative price signal is a unit of measure used to express this value. Different users perceive this value differently. A winter jacket can be extremely valuable for those who live in sub-zero temperatures, and have no value for those who live in the desert. As a result, we can say that the concept of value is very subjective and depends on the user's thinking and his point of view. It cannot necessarily be normalized for a large subset of users in the absence of a common standard for expression in common units of measurement of the subjective perception of value by each user.

At the same time, the relative price signal itselfis a function of the number of units of account in the plane of the monetary system. It can be manipulated by adding or decreasing the number of currency units available to users of the fiat monetary system plane. Any change in the price signal affects the perceived value of a given product or service, causing users to think that its value has changed. Whereas in reality this perceived value has little in common with the relative real value of the goods or services for this user.

Figure 21: Perception of cost units and relative price signals in a fiat system

Fiat System Level ArgumentThe idea is that combining and controlling the planes of the monetary and currency systems can help the management level control the prices of assets and their perceived value. And also that such control is necessary to ensure price stability and preserve the purchasing power of network users.

Figure 22: The gradual conversion of currency notes into money

In this case, it is silent that these monetarypolicies are used to control and manipulate user perceptions in order to achieve their own goals. And although from an administrative point of view these measures can be considered effective, the results of such a policy are completely opposite to the declared goals of ensuring price stability and preserving purchasing power.

Figure 23: Price volatility over the past century. Price inflation for all goods since 1913 (US Bureau of Labor Statistics consumer price index). (a source)

Figure 24: Reduced consumer purchasing power (source)

If users are forced to use onlyone plane of the monetary system, and the central government has the authority to force the updating of network rules within this plane, which means that the central government can influence perceived value through changing various parameters of supply and demand. But, as user preferences tend to strive for balance as soon as they realize the true value and that the previous period was only a temporary bubble, the end effect is that users, on average, lose their wealth and purchasing power. This is reminiscent of what happened when John Lowe artificially maintained stock prices above their market level. This led to the mass issue of banknotes, which he exchanged for shares. Then people's preferences returned to equilibrium, and the Mississippi company filed for bankruptcy.

Figure 25: Impact of various incentive design models on the target result

2008 Housing Lending Crisis - It's Stillone example, on which it is possible to study the influence of control from the side of the control level on the plane of the fiat monetary system. The management level has increased the supply of available for borrowing currency units, lowering interest rates on loans for the purchase of houses. This led to an initial surge in housing prices, as a result of which more and more people began to invest in homes based on their perceived value, thereby contributing to the formation of a credit bubble. But when user preferences for various reasons began to return to an equilibrium state, a collapse occurred, as a result of which the debt burden turned out to be excessive for users. Users were losing their assets, their purchasing power was declining.

Figure 26: Housing Bubble. «The system is quite stable».

It is very important to understand that infusion into a planemonetary system of a larger number of currency units has virtually no effect on real value. This only increases prices in the moment, but the true value remains unchanged. Once users become aware of the formation of a «bubble» and try to benefit from the current situation, we come to a situation of mutual betrayal («defect-defect», see the first article) and the economy collapses.

Figure 27: Effect of changes in the total supply of currency on real value

6.3 Inflation and deflation

When all network users are forced touse only one plane of the monetary system, as is the case with fiat currencies, the level of management has the ability to influence real and perceived economic growth by controlling (a) the mechanism for creating money through bank credit and (b) expressing this mechanism in units of account for this monetary plane system.

This awareness, along with the understanding thatsuch a government can make decisions that can cause serious damage to the economy, leading to disputes about the comparative merits of inflationary and deflationary currencies.

Figure 28: Limits of discussion in the fiat monetary plane

From a monetarist point of view, this problemIt is solved through the concept of a balanced budget, when the level of management is encouraged to reduce costs in order to narrow the gap between GDP and foreign exchange supply, as was done in the era of the gold standard. On the contrary, from the point of view of a supporter of Keynesian theory, this problem is solved by increasing the supply of currency units and encouraging the government to spend more. The argument is that a certain excess of currency units is better than when there is a shortage of them in the system. In addition, it is argued that the infusion of more currency units into the system stimulates the activity and economic growth of the network, even if this leads to higher prices for goods and services and the loss of purchasing power by some network users.

Figure 29: Conservative Monetarist and Expansionist Keynesian Models (source)

It is worth noting that the dispute between the Keynesian and monetarist approach makes sense only if all users are forced to use the same plane of the monetary system.In the cryptocurrency system, users do notlimited to one plane of the monetary system, as happens in the fiat currency paradigm. As a result, there is no need to manipulate the volume of supply of currency units. In a cryptocurrency system, the value of a commodity can be discovered through users' choices expressed in the interaction of supply and demand. Even if a powerful third party were to manipulate the supply of a particular token, there is nothing forcing users to use only that network, which greatly reduces the risk. The design of the cryptocurrency system is capable of preventing third parties from controlling the entire monetary system and performing forced network updates that would push or force users to opt for a "defect-defect" situation.

Moreover, Bitcoin also takes advantage of digital technology and divisibility to the smallest unit of account, one satoshi, equal to 1 / 100,000,000th of one bitcoin.

Figure 30: Comparison of the total number of BTC and USD, expressed in the smallest unit of account for these currencies - in Satoshi and cents (sources: 1, 2 [PDF])

With such a small, smallest unit of account,like Satoshi, Bitcoin guarantees that it will always have enough units of account to express the true value of the market and fuel economic activity. This eliminates the need to adjust the total supply of currency for one monetary plane through forced network updates and third-party control in order to generate relative price signals and manipulate perceived value. If we assume that in the future we will reach a point at which economic growth will exceed the total number of units of account, then users will not be limited only to the BTC network. They have the opportunity to use many other networks, depending on preferences.

«I have always advocated the abolition of the Federal Reserve System and its replacement with a computing program that would maintain the rate of growth of the quantity of money at a constant level», -Milton Friedman.

Chapter 7: Fiat Network Topology

Figure 31: Nakamoto Conceptual Diagram

7.1 Mental Fiat Installation

The mental installation of a fiat network user expresses the dominant memlex, preferring an affordable resolution mechanism, compliance with which is ensured by a third party.

In an interview conducted in a room with walls,festooned with bond certificates that could chronicle the financing of America's railroads and infrastructure, Sprecher drew a parallel between the New York Stock Exchange, famously founded in 1792 under a sycamore tree, and a technology that could change the way consumers and companies are buying almost everything: “Bitcoin cannot survive as a rebellious and uncontrollable idea,” he said. – To develop, cryptocurrencies must work on an established infrastructure. They need the trust and rules that have been built into our financial system over many years. They need the kind of trust that the big display board of the New York Stock Exchange represents.

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This cognitive language encourages users.to choose and vote for various forms of institutionally centralized levels of management, which allows these selected third parties to design and deploy national network protocols on the command line or to perform forced network updates to start and maintain the system. Government and civic organizations, for example, formulate and implement laws that inform and enforce public and private contracts through the logic of violence. These contracts are executable programs with which users of fiat systems interact daily on a non-alternative basis. Contracts may include tax laws, interest rates, or policies that dictate how and where to create or use a bank loan or currency.

Figure 33: An example of a plane of a fiat monetary system of a national network. (: F. Betz, T. R. Anderson, and A. Puthanpura “Currency flow in an economy: India’s demonetarization event”)

7.2 Design incentives in a fiat network topology

Since the governance models of fiat networks,By requiring the geometry of the third party enforcement rules to be centralized, fiat network governance layers can perform forced updates for all users, compiled according to the logic of force (such as changing the design from the gold standard to fiat currency). The very definition of the word «fiat» reveals its structural geometry as «fiat» by definition, is not provided with anything other than the legal requirement for its use put forward by the network management level in relation to its users.

Figure 34: Comparison of incentive design in cryptocurrency and fiat networks

Fiat currency, or fiat bank loannetwork, is created in the form of debt obligations, which must be returned with interest. The initial issuance of fiat currency as network debt is a key design element that is often overlooked. It implies that debt service must be accompanied by interest payments.

Keep in mind that when releasing an initial batchfiat debt units, the debt units required to pay interest on it, do not yet exist. Consequently, the debt units needed to pay interest must also be borrowed.

Creating new fiat debt units bydefinition (as from a legal point of view) requires the payment of additional interest, since their issue also implies borrowing. Thus, as the system develops cyclically, interest accumulates, and users must either take more loans or be taxed to calculate interest, which, in turn, further increases the debt and interest payable.

«Whenever commercial banks extend credit, they create bank turnover money by simply adding new deposits of dollars to accounts in exchange for an IOU from the borrower», -Federal Reserve Bank of New York, “I Bet You Thought”, p. 19.

The fiat system stimulus design equation is defined as:

Figure 35: Fiat system stimulus design equation

WhereDis the total amount of fiat currency that has been issued as debt by the management level and is in circulation, andiis the total interest that is to be collected on the amountD.

In order to fully repay the debt, network users must return to the control level that controls the networkD + i. Butimay appear in the system only on account of a new debt, i.e. increase in amountD. As a result, the management level continuescreate more fiat debt units through the creation of new bank credit tokens, forces users to borrow in their bank credit tokens and collects interest from them in the form of ever-increasing taxes and fees.This creates an endless regression, which simply does not imply the existence of such a point in time when the network and its users will be completely free of debt.

Figure 36: Total debt on loans in the world market (source)

7.3 Fiat network user effects

Fiat network design forces usersBorrow and use fiat debt units in the form of bank credit tokens. Then, users have to pay for using a loan through taxes, interest, or by transferring real assets, even if initially they had no desire to borrow these fiat debt units or bank credit tokens, but were forced to do this as a result of forced network updates carried out by the management level Fiat network.

In addition, since the fiat incentive systemof the network implies an exponential increase in the supply of fiat debt units, or bank credit tokens, the purchasing power of users decreases in proportion to the growth of the money supply, while the purchasing power of the fiat network management level increases proportionally.

Figure 37: Productivity [labor] and average real wages over the past seven decades. (: Bureau of Labor Statistics)

Figure 38: Real construction costs and real estate prices over time (source)

Declining purchasing power requiresconstant injections into the system of even more fiat debt units, the purchasing power of which, in accordance with the J-curve distribution, will disproportionately accumulate with management-level owners. This is what is called “seigniorage” in banking circles.In fact, fiat is a highly optimized rent-oriented financial scheme in the form of a globally developing memplex.

The author of the cryptocurrency manifest could ironicallynotice that the consequences of applying a third-party coercion architecture, debt incentives, and forced network upgrades will always be the same: the weak will again be forced to endure their suffering.

Chapter 8: cryptocurrency network topology

Figure 39: Nakamoto Conceptual Diagram

8.1 Mental installation of a cryptocurrency network

In a cryptocurrency network, a mental installationthe user is an expression of a dominant memeplex that prefers to have a resolution mechanism stemming from the geometry of open source consensus rules, in contrast to rules forcibly imposed by a third party.

This cognitive language encourages users.create decentralized command-line control mechanisms in which none of the third parties, like any of their associations, can perform a forced network update for all users or make mistakes that will affect the economy of the entire network. Recognition as a mechanism for resolving open and prescribed consensus rules in the code of the code led to the development of blockchain management on the command line.

Based on these blockchains by the efforts of anynetwork participants can create a variety of smart contracts. Cryptocurrency network users interact with these smart contracts that determine how cryptocurrency tokens are created and spent. All laws of the cryptocurrency network regarding the distribution of tokens, their possession and accounting for costs exist in the form of program code that theoretically cannot be changed by third-party unilateral violence through global forced network updates, except for a number of well-known and measurable conditions.

8.2 Incentive design in cryptocurrency network topology

Unlike the fiat network, cryptocurrency tokensare not required to be created in the form of debt agreements, loans for network users or bank loans. Users cannot be forced to borrow and use strictly defined cryptocurrency tokens. Instead, users have the opportunity to purchase any tokens of their choice, depending on which network they consider most valuable. The value of tokens is a measure of users' perception of the usefulness of the network and depends on many factors, including the type of services offered by the network, its hashing power, whether the token provides the underlying cash flow, the falsifiability and censorship of the token, whether the token’s dynamics is intended for political manipulation, the volume of issue token (limited or unlimited), the activity and responsibility of developers, the intensity of support for its community, the number of network users, and so on.

It is impossible to force onea specific token to all users of the cryptocurrency ecosystem. People are free to use any cryptocurrency network and any token of their choice. If they do not agree with the rules of a particular network, they have every right to get out of it and choose any other, or create their own cryptocurrency network. In a cryptocurrency network, users are not forced to pay rent to anyone in the form of debt servicing and interest for using the network.

Figure 40: Basic principles of incentive design in fiat and cryptocurrency networks

However, Bitcoin's solution and technologydecentralized management should not be taken on faith categorically. Attack vectors, including changes to the management and incentive system by known or unknown parties, represent a changing surface of arguments that need to be actively controlled and countered.

Figure 41: Attack vectors in a cryptocurrency network (source)

8.3 Custom effects of the cryptocurrency network

Unlike the fiat network, the cryptocurrency designthe network does not force its users to borrow and use monetary units of the network. As for currency units, there really is no such global restriction that they should be issued only as network debt. This means that users of the cryptocurrency network are not forced to pay for the use of network tokens through the payment of additional interest or by transferring real assets to pay for network debt, as happens in a fiat network.

Value Proposal for Token Issue Modelcryptocurrency network is that users are NOT limited to the plane of one monetary system, and the initial issue of tokens is NOT required to take the form of debt or bank credit for network users.

Moreover, unlike the fiat network, the globalforced network updating carried out by one central authority or by an association of several third parties in a cryptocurrency network can be practically impossible.

Consequently, the value proposition of the modelThe management of the cryptocurrency network blockchain is decentralization, which allows the model to approve the following qualities without the participation of a central authority or coercion by a third party:

1. Reliability
2. Security
3. Confidentiality

By decentralization, we meandecentralization of power, a system of checks and balances, as well as reducing the risk of unilateral decision-making that could harm the system. Considering that in some cases, third-party coercion and forced network updating can be a good optimization, determining which parts of the system can be centralized and which ones are decentralized will make the path to decentralization more practical.

Figure 42: User selection in cryptocurrency and fiat systems

Let me remind you that in the previous part of the article wedefined money as an energy deal. This is a common standard for settlements between two strangers: they need to coordinate among themselves (a) the perception of units of value and (b) signals of relative price for goods and services.

It’s important to understand that money is neither a thing nor aresource. Fiat money is not so much money as currency. A fiat currency is not so much a currency as a political abstraction, which can take various forms.

Fiat systems management levels in one-wayorder change the creation and volume of offers of an infinitely accessible bank loan in order to manipulate the perception of units of value and signals of relative prices for goods and services. This mechanism, in turn, is used to influence and control user cognitive functions and behavior in order to achieve the parameters necessary for the control level.

The goal of the current Moloch is topresent this political abstraction to network users as «money» in the form of a bank loan or debt. Users are forced to accept the bank credit system as a general standard. This is achieved by limiting the freedom of choice of users to one combined monetary and exchange rate plane through the state's monopoly on violence.

The goal of decentralizing power is to remove this restriction and disconnect Neo from the Matrix.

 

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