In recent days, the bitcoin media has been discussing the antoninianus, a debased silver coin that was used in Late Antiquity. As time went on, more and more silver was eroded from the coins until, finally, they ceased production for good under Honorius. The physical appearance of the antoninianus degraded alongside its fineness. In parallel, their purchasing power evaporated, until they finally ceased production.

The more I look into the antoninianus and its story, the more I am reminded of modern paper money. Paper currency in the US, in particular, has been a microcosm of this "evolution," but in reverse.

If you compare hundred-dollar bills (or any other denomination) from the turn of the 20th century to those from the turn of the 21st, you’ll notice that that recent editions have much more sophistication and detail in their designs. At first glance, this seems entirely contrary to what occurred with the antoniniani.

Upon reflection, however, you might notice that there is an inverse relationship between the resources and ingenuity that are expended to design US paper currency and its purchasing power. The further back you go, the less ornate the design, yet the greater the value. The more recent the bill, the more complex the design — from multi-color printing, to AI-enhanced presidential portraits, to embedded security measures in the form of sophisticated materials, paper, and printing processes. And yet, these fancy bills will get you a tiny fraction of the goods that their older counterparts could purchase in their day.

For example, today's hundred-dollar bill will only buy you about half as much as it would have in 1960. The bill itself, in terms of the labor and resources that produced it, is worth more, but its purchasing power is much less. Why is that?

Perhaps the promise of the bill's value is being subtly replaced by a form of persuasion. To convince people that the desirability of a certain unit is real and sustainable, it must be given the illusion of greater value. If the physical appearance of our money were to degrade alongside its utility, like the antoninianus, people might start asking uncomfortable questions about its soundness.

The more money that is added to the money supply, the higher the level of ostentation required to hide the fact that those who set monetary policy have been making promises to us that they cannot keep. Perhaps our fancy, modern money is an example of the general principle that promises become more and more elaborate as they become less believable.