“An empty mind is more dangerous than an empty wallet.”
Mac Duke


This is about bitcoin and cryptocurrency and its not. It’s actually about the future of financial literacy. Cryptocurrency may just be the final nail in financial literacy. What do I mean? Well. Let me go back in financial literacy’s heyday – bartering. Nothing beats financial literacy learning than tangible give & take. You only had to barter 2 hens for that pound of coffee so many times before you began noticing you had no more coffee, but that other person was selling eggs in the market every week. The next thing about bartering was that it didn’t exactly go away once real currency was being minted. I could still dig up some gold chips and exchange it for money. All of this kind of permitted everyone, young to old, to get a sense for the work-to-market valuation of finances.

                                ** note: bartering also established literacy between cultures. This doesn’t mean it was fair in the beginning (getting a knife for # of buffalo hides that would generate significant income), but over time and hundreds of transactions, and increased awareness of other cultures transactions, good & services, a balance in value was generated.

 But then big businesses came along and you and I stopped panning for gold and instead showed up somewhere 9-5 so that someone could give us some gold (money) for the work we did. Financial literacy still remained high because for years people pulled out their wallets and coin purses and handed over hard earned, what little they had, currency for something. They felt the pain of giving away something hard earned. The literacy was grounded, tangibly by the physical act of handing money over, in that emotional underpinning. Paying for something came at a cost (and, yeah, that’s the foundation of financial literacy).


Then credit cards came along and, well, financial literacy took a hit.

Then debit cards came along and financial literacy took its next hit as physical cash and tangibly seeing the ‘loss’ of what you had, and earned, for something you valued disappeared.

Then online banking and scheduled payments came along and financial literacy took another gut punch.

By this time the value of money had become so esoteric it took on some aspects of monopoly money to many people. Sure. You still had financial commitments and your bank account went up and down, but increasingly many people floated through financially sustaining their lives. You can go months without ever having to physically handle money or feeling the actual give & take of an expenditure.

Oh. All the while we see wealthy people claim bankruptcies and, yet, People magazine (that still exists, doesn’t it?) shows pictures of them lounging in some 5-star hotel. Everyday schmucks think “I thought financial literacy was not going bankrupt”, but more importantly we were seeing decreasing consequences for what most people would have deemed incredibly poor financial literacy. Financial literacy took another foundational gut punch.

However, the most insidious aspect of this transactional history was that the millions of transactions which actually underpin the value of currency became, well, unimportant to people. Well. Maybe we just forgot and more & more people thought that monetary “value” was arbitrary. We have gone Geological Ages away from barter to the present “value is what we believe it is.”

And then bitcoin came along. To be clear. Existing cryptocurrency, excepting maybe stablecoin, is not tied to any fiat currency nor is it tied to any ‘standard’ (gold, silver, pork bellies, whatever) nor is it even tied to anything you physically mine. It is tied to, uhm, a game. Sure. A technological game, but a game nonetheless. So not only do people not think of monetary value as grounded in anything but then, given lots of experience playing Candy Crush and earning tokens, people say “what the hell, gamification is as viable as anything else any currency is tied to.” With this we have heard the dying breath of financial literacy. After being tortured for years, it has died.

I’d hate to end with that thought so let me try and say where we go from here to save financial literacy.


I’ll go to an unexpected place – business. Business has lost its version of value creation. Maybe another way of saying this is business also embraced “perception is reality”, but in a more insidious way – to value. All of a sudden value was ‘experience’ and, well, value became grounded in the esoteric <or, worse, perception>. So even while business had to actually spend money to produce something (mostly through extraction of or from something) they increasingly suggested the value was, well, intangible. I say that because business can regroup and regain what value truly is.

The purpose of business is to create and deliver value in an efficient enough way that it will generate profit after cost. Period. It was in The Origin of Wealth where Eric Beinhocker gave us a fairly constrained definition of creation of economic value:

A pattern of matter, energy, and/or information has economic value if the following three conditions are jointly met:

  • 1) Irreversibility: All value-creating economic transformations and transactions are thermodynamically irreversible.
  • 2) Entropy: All value-creating economic transformations and transactions reduce entropy locally within the economic system, while increasing entropy globally.
  • 3) Fitness: All value-creating economic transformations and transactions produce artifacts and/or actions that are fit for human purposes.

Maybe try these words: value is created through an irreversible process which gives a resource’s ‘order’ greater usefulness to other humans. This suggests not all value is created equal but value is defined nonetheless. I end here because inevitably financial literacy isn’t about finances, but rather value. The future of everyday finance is becoming less and less tangible, farther and farther away from bartering hens for coffee, which behooves us to triple down on value literacy. Ponder.



Written by Bruce