Bad Money Fragilizes. Bitcoin Tech Talk #280

One of the main benefits of the current system is that so much is centralized. This is great for efficiency, resulting in cheaper prices. The impetus for this pressure towards efficiency is fiat money. Fiat money puts tremendous pressure on keeping prices down because of the phenomenon of sticky prices. People do not like paying more money for the same good so manufacturers are forced to make their goods cheaper. Many opt to make their products worse, essentially debasing their goods or services along with fiat, but the other option they have is to centralize production and use scale to offset the loss incurred by inflation.

Unsurprisingly, this has led to enormous multinational corporations, where only a few companies control entire industries. This unfortunately means that product innovation is sacrificed, but further, it makes the production of these goods enormously fragile. This is obvious in semiconductors, for instance.