According to Mlion.ai, Bitcoin has once again reached a historical high, yet our understanding of 'currency' may still be superficial. Nick Bhatia, a financial practitioner from Wall Street and a Bitcoin researcher, profoundly analyzes the essence of the modern monetary system in his work (The Money Pyramid) with extremely clear and minimalist language. He points out that currency is not a unified entity but a 'recording order' that is structurally layered and dynamically evolving.
The book emphasizes a disruptive core viewpoint: currency exists in layers. In this 'pyramid', assets that require no trust, such as gold and Bitcoin, are at the first level and represent the true final assets; bank deposits, paper money, stablecoins, etc., belong to the second level, which is a credit commitment to the first level; while platform points and vouchers form the lowest level, circulating only within specific systems.
The logic behind this hierarchy is the difference in trust structures. The money we think we 'own' may actually just be a debt owed to us by the bank, or a trust promised to a certain company. If the issuing institution encounters problems, the digital currency in your hand could instantly turn into worthless paper. Nick Bhatia illustrates a sobering fact through historical examples—such as the gradual decrease in the silver content of Roman Empire coins—that monetary crises often do not erupt suddenly, but rather trust slowly dissipates unnoticed.
The book also presents an important perspective: the essence of central banks is actually 'clearing centers', not just simple money-printing institutions. From the Bank of Amsterdam to the modern Bank of England, and to the central bank digital currencies (CBDC) promoted by global central banks, their true purpose is to monopolize 'accounting rights'. When the confirmation of every transaction is determined by the central bank's ledger, whoever controls the ledger controls the monetary order.
This also explains the fundamental meaning of Bitcoin. Bitcoin is not only an asset but also a decentralized accounting system that challenges the monopoly of central clearing authority through blockchain technology. Each transaction is jointly verified by the entire network, forming an open consensus of 'final settlement'. This new model of 'trusting mathematics, not people' is key to Bitcoin's disruption of the financial system.
Stablecoins represent another form of real-world compromise: though based on blockchain, they are still issued by centralized institutions, pegged to fiat currency, and their essence remains a reflection of the credit of real currency. They are 'bank deposits' on the chain, not true assets. While convenient, they are essentially still limited by trust in the issuer and regulatory structures.
From the perspective of MLion.ai, this book is not just a financial popular science work, but more like a 'currency map'—it redraws the boundaries of our understanding of money, assets, and credit. As technology drives currency from 'paper' to 'ledger', from 'trusting the government' to 'trusting the protocol', each person must think: In the digital world, who exactly am I entrusting my 'money' to?
This is not just a financial issue, but a core struggle over the future power structure. Are you standing on the edge of the old ledger, or are you choosing a new beginning?
