Social Cryptocurrency

Abstract

Money is at the heart of any financial system. It is the “joints” that link markets across space and time. As long as money performs its functions, markets tend to allocate resources efficiently and allow participants to be more productive and therefore more prosperous. As money is a prerequisite for the normal functioning of markets, it cannot itself be part of the market. Money, thus, cannot as such be a source of income or profit. This is one reason why all divine faiths prohibit usury. Cryptocurrencies were invented supposedly to avoid the ills associated with the fractional reserve system. Unfortunately, they end up with the same problem: both systems are transforming the process of money creation into a commercial process motivated by destructive competition.