Once upon a time, there was a beautiful island called Degendaland. On Degendaland there were little people living their little people lives in their 1000 great houses, and the 1000 great houses were all the greatest treasure of the little people.
-------------------- degen play, amateur mode --------------------
Little Degen was one of them. He sometimes liked to play with some of his pieces of money, trading up or trading down, depending on his intuition. He wasn’t too bad at it, he even knew the ancient magic: “Buy low, sell high”.
Sometimes he played and won. He was happy to party with his friends to celebrate when that happened. Sometimes he played and lost, there was no party with friends those times.
One day he went in with a 100x leverage on his game. He wasn’t careful and started loosing his bet. He was pretty sure of his bet though, he tried adding some money to his bet by borrowing from a few friends. Unfortunately it just wasn’t his day, he lost the bet and went back to work after that.
-------------------- degen play, god mode --------------------
On the same Island there was also a magician called Mister Fiat. Mister Fiat was a great magician, he could create money just like that and make it appear out of nowhere, and it was his little secret.
Mister Fiat also liked to play with his money. Sometimes he would win and be quite happy, other times he would lose, but he wasn’t too sad about it as he could go back to his house, make the money out of thin air and come with it to pay what he owed.
One time he also tried the 100x leverage bet and lost. He had played big and had to pay 1000 pieces of money. That was a lot of money to make, but Mister Fiat was pretty sure he could do it. What he was not sure about was what was going to happen after he delivered the money. You see, at that point there was a total of 1000 pieces of money on the island and the great houses were worth 1 piece of money each. After Mister Fiat was going to deliver the money he owed, it would be spent by more and more little people, and they would end up buying houses with more and more money in hand to bid for the houses. They would then have 2000 pieces of money for the 1000 houses, and the little people buying houses would soon need 2 pieces of money to buy a single house instead of 1 piece that was enough earlier.
The little people of the Degendaland would surely notice that price increase, the young little people would have trouble buying a house for themselves, they would get angry, find out that Mister Fiat had caused the mess, and he would be in big trouble!
Mister Fiat got afraid of this, so he went to see the king and told him his little secret. The king was very angry at first, but the king was also a degen, he calmed down when he understood that Mister Fiat could make an infinite amount of money for him to use. The king told the army to protect Mister Fiat, and together the King and Mister Fiat would manage the money. If they gambled and won, bravo! If they gambled and lost, no worries! They would just make the money out of nowhere. If they gambled and lost too much money and had to create way too much money, the goal would be to avoid that the little people felt the increase in prices too much in one go.
The price of the houses would still keep increasing, slowly but surely, because more and more money would be in the hands of the little people to buy houses and soon there could be 3000 or 4000 pieces of money for the same 1000 houses.
The houses were the same as they were before all that, it’s the pieces of money that had lost value. The young little people of Degendaland were not that happy with the new system, the salaries of the little people did not increase much, and now the young little people had to get into debt with the magician for their whole lives to buy a house.
Mister Fiat on the other hand liked the new arrangement, he could continue practicing his magic when the young little people came for a loan to buy a house, and he even got to keep part of it for himself. When he gambled and won he would just reduce his personal debts, when he gambled and lost he would just create it from nothing and let the young little people work more and more to pay for it.
-------------------- One day --------------------
One day, little Degen heard something, something small, but it was there. He didn’t think too much of it at first, but it was still there….
(… Coming soon)
-------------------- Are you ready? --------------------
Are you ready, my crypto friend? You can open your eyes now. Welcome to Degendaland!
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So, here it is, “Fiat money is degen gambling”.
Previous episode: The killer app of crypto
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