And the inescapable ravage of modern seigniorage…
Originally, seigniorage, also spelled “seigneurage,” came from the Old French language, stemming from the right of the lord (seigneur) to mint money — profiting tremendously from money creation. It was a bygone prerogative of lords and the crown to extract a fee, the “brassage,” from the bullion brought to the mint to be coined or to be exchanged for coins that would be used for commerce. Individuals could bring their precious metals, usually silver and gold, and the crown’s mint would stamp a coin out of the metal to be accepted by merchants. This privilege was exclusively reserved for armed elites with legislative and executive powers.
Today, seigniorage is a common way for governments around the world to generate revenue without levying conventional taxes, which are less popular with their electorates. The modern lords of money printing are central banks working in tandem with commercial banks and governments issuing debt in a fractional reserve banking system. National fiat currencies, such as the U.S. dollar, euro or yen, are protected by legal tender laws, meaning they are recognized as an appropriate instrument to settle any monetary debt in some jurisdiction. It is also typically demanded that residents of the respective territories use these currencies to pay their taxes and trade in the country. Fiat currencies are only used because people have no other choices that are legally available. Under the fiat monetary system, the cost of currency issuance is close to zero, which is very profitable for the national issuers, as there is no longer any limit on the quantity of money that can be created, further shrinking the value of the existing currency in circulation, and annihilating the purchasing power of the currency holders — people like you and me.
Enter Bitcoin in 2008, revealed to the world as an open-source monetary mint divorced from any central control, in a dark corner of a