Lyn covers the usual ground about how commodity money acquires its value. The story is that it starts as a collectible (cowrie shells is a famous example) that people value for aesthetic reasons; or perhaps they use a different commodity (e.g., wheat or tobacco) because people have need of those things, though those types of commodities also have their drawbacks, as she discusses. Eventually, the thing acquires an additional monetary premium on top of its commodity value.

In philosophical language, you would say that the value of the cowrie shell is grounded in its aesthetic appeal. The satisfaction you get bc something makes pretty jewelry, or because you can smoke or eat it, is the foundation that allows it to eventually take on a monetary premium. In terms more familiar to most bitcoiners, grounding is what Mises was talking about with his regression theorem. (Although note that many Austrians got wound around the axle whether btc could have value bc it violated the regression theorem.).

It makes sense to care very deeply about this initial process of monetization when the idea of money is new. But these days, we're obviously familiar with the concept of money. And practically speaking, this new money (btc) is grounded in an older kind of money (fiat) that happens when one is exchanged for the other. But this has always seemed precarious to me -- it's relatively easy for the government to squash formal exchange at scale. Not entirely, but to turn the fire hose off.

Given bitcoin's overwhelming grounding in fiat at this point of time, and its novelty and foreignness, what would it mean for the torrent to become a trickle?