Bitcoiners and hard money types, having had PTSD from a failing fiat-credit system, often resort to thinking all (unbacked) credit instruments are bad. Some are, some aren't.

Financial history, replete with examples of monetary scarcity that we in our fiat-money abundant digital times can't even comprehend, have a ton of financially ingenuous examples to remedy not having about physical monetary media to process transactions.

Max highlights a few, pointing specifically to Lancashire during the IR. The Bill of Exchange was a revolutionary payment media and credit instrument that both allowed for transactions to take place temporally disbursed and to effectively move funds across long distances, via the use of banks and chains of discounted Bills.

It's one of the two financial instruments that built the modern world.

"The essential requirement is that the credit must be backed by real, exportable production. Bills drawn on anticipated output of goods that can be sold externally are genuinely self-liquidating because export revenues eventually settle them.""The essential requirement is that the credit must be backed by real, exportable production. Bills drawn on anticipated output of goods that can be sold externally are genuinely self-liquidating because export revenues eventually settle them."

These examples reveal a two-layer monetary architecture: an inelastic base of hard money and an elastic layer of credit instruments that expands and contracts with the needs of trade. The layers remained distinct because bills were not money. They were acknowledged claims on future money, and they traded at a discount that made this explicit.

The implications for sound money advocates are significant. Bitcoin maximalists sometimes imagine that adoption requires first accumulating sufficient Bitcoin to run an economy, as if the monetary base must precede commercial development. But the historical pattern suggests the opposite sequence is possible. A community with productive capacity but little base money can use credit instruments internally, export goods and services for Bitcoin, and gradually accumulate the monetary base through trade surpluses. The bills enable the production that earns the coin.