In Broken Money presents a sweeping historical, economic, and technological exploration of money, contending that the current global monetary system is fundamentally flawed.
The central thesis is that the deterioration of moneys core properties, particularly its role as a store of value, has precipitated widespread economic inefficiencies, social distortions, and financial fragility. This dysfunction is rooted in the shift from hard, commodity based money to centrally controlled fiat systems, and it has been exacerbated by digitalization, geopolitical imbalance, and mounting systemic debt.
Alden argues that technological advancements most notably decentralized digital assets like Bitcoin offer a pathway to repairing this broken system by reintroducing monetary properties such as scarcity, security, and neutrality. However, she is not evangelizing crypto in isolation; rather, she offers a nuanced critique of both legacy systems and digital alternatives, weighing the practicalities, trade-offs, and risks of each.
Lyn Alden is a highly respected macroeconomic analyst and investor, known for her data driven insights on monetary policy, global finance, and emerging technologies. She holds a background in both engineering and finance, which informs her interdisciplinary approach combining systems thinking, historical analysis, and technical knowledge. Through her research platform, Lyn Alden Investment Strategy, she provides institutional grade commentary and long form reports, which have attracted a global following.
The book is particularly valuable in today’s context of high sovereign debt, central bank overreach, and accelerating adoption of digital assets. It provides historical perspective, systems level critique, and a sober look at potential futures not just for Bitcoin, but for money itself.
The Nature and Evolution of Money
Alden begins by defining money not as wealth, but as a technology-a tool that enables efficient exchange, economic coordination, and value storage across time and space. She outlines three fundamental functions of money: medium of exchange, unit of account, and store of value. Effective money must also possess certain properties: durability, divisibility, portability, uniformity, acceptability, and most crucially, scarcity.
She then offers a sweeping tour of monetary history, from ancient commodity currencies to early banking systems, the gold standard, Bretton Woods, and the rise of fiat currencies post-1971. In each stage, she emphasizes how changes in the underlying technology of money affected its functionality and societal impact.
Key historical turning points include:
- The invention of double entry bookkeeping and its role in facilitating credit expansion.
- The gradual shift from commodity backed to fiat systems, culminating in Nixon’s closure of the gold window.
- The digitization of fiat currencies and the emergence of central bank dominance.
Broken Incentives in Fiat Systems
The book’s core diagnosis of the current system is that fiat money, untethered from scarcity and governed by discretionary policy, creates structural incentives for debt accumulation, financial repression, and asset inflation. Alden connects these features to key macroeconomic problems:
- Wealth inequality Asset owners benefit disproportionately from monetary expansion.
- Financialization The economy shifts toward speculation over production.
- Currency debasement Savings lose purchasing power over time, distorting intertemporal decisions.
- Global imbalances The U.S. dollar’s reserve status enables chronic deficits, forcing other nations into mercantilist postures.
She describes fiat money as “closed loop systems,” where central banks and commercial banks dominate money creation through debt issuance, creating inherent fragility and a growing mismatch between real value and monetary signals.
Technology, Control, and Surveillance
The rise of central bank digital currencies (CBDCs) is examined as a continuation of fiat logic in digital form. Alden warns that CBDCs, while efficient, threaten privacy, freedom, and market neutrality by allowing unprecedented levels of surveillance and programmable constraints on spending.
She frames this as part of a broader trend toward monetary centralization, where increasing power is concentrated in fewer hands eroding the neutrality and political insulation that sound money ideally offers.
Bitcoin as an Open Monetary Protocol
A central part of the book is dedicated to Bitcoin not as a speculative asset, but as a monetary innovation. Alden presents Bitcoin as the first successful attempt to digitally recreate the core properties of sound money, particularly:
- Fixed supply Capped at 21 million coins.
- Decentralized issuance Governed by transparent algorithmic rules.
- Verifiability and self custody Users can audit and hold value independently.
She explores Bitcoin’s design tradeoffs (e.g, energy consumption, throughput limitations) and contrasts it with fiat, CBDCs, and stablecoins. While she acknowledges that Bitcoin is not yet widely adopted as a medium of exchange or unit of account, she emphasizes its emerging role as a store of value and global settlement layer.
Bitcoin, in her framing, is not just a currency it is an alternative monetary operating system. It offers opt in neutrality and scarcity in a world of coercive inflation and surveillance.
Transition Pathways and Constraints
Alden resists utopian thinking. She explores the realistic paths forward, acknowledging institutional inertia, geopolitical stakes, and regulatory constraints. Possible futures include:
- Gradual Bitcoin adoption alongside fiat (“parallel systems”).
- Sovereign debt crises forcing monetary resets.
- Regional fragmentation of the global financial system (de dollarization, multipolarity).
- Hybrid models combining blockchain infrastructure with state oversight.
She stresses that any monetary transition must be evaluated not only economically, but through the lenses of game theory, geopolitics, and energy economics.
Energy, Capital, and Monetary Anchors
The book also highlights the physical underpinnings of monetary systems. Alden argues that money should be ultimately rooted in energy expenditure or scarcity, linking this to the proof of work mechanism in Bitcoin. She criticizes proof of stake systems as lacking real world anchoring, comparing them to fiat systems with updated aesthetics.
She draws analogies between the laws of thermodynamics and monetary entropy, underscoring that money without cost of production or verification creates leaky systems that favour insiders and degrade over time.
Global Implications and Historical Rhymes
Alden closes by situating the current moment within broader historical patterns empires, currency resets, and debt cycles. She draws on the works of Ray Dalio, Jacques Rueff, and Ludwig von Mises, framing today’s crises as the culmination of unsustainable monetary policies dating back decades.
She urges readers to consider the strategic value of having exit options monetary systems that don’t depend on state permission, and which can function in adversarial conditions.
Broken Money Takeaways
- Money is a technological layer Its quality and design have far reaching consequences for societal stability, capital formation, and political freedom.
- Fiat systems have broken incentives Unlimited supply, centralization, and political discretion create distortions in wealth distribution, risk pricing, and capital allocation.
- Bitcoin introduces a new monetary operating system With algorithmic scarcity, decentralization, and permissionless settlement, it addresses many structural weaknesses of fiat.
- CBDCs are an extension not a fix of the current system While offering efficiency, they may intensify surveillance and erode individual autonomy.
- Sound money must be anchored in physical or algorithmic constraints Scarcity, energy expenditure, and neutrality are essential for long term monetary reliability.
- Transition will be complex and multi polar Rather than a sudden collapse or singular solution, the future may involve coexisting systems, regional fragmentation, and incremental change.
- Investors and citizens need monetary literacy Understanding money’s structure, history, and trade-offs is crucial to navigating inflation, policy changes, and technological shifts.
- Adoption of alternative systems is strategic, not ideological Bitcoin and other decentralized assets offer functional redundancy in a system vulnerable to failure and overreach.
- Geopolitics and energy shape monetary systems Control over commodities, production, and settlement infrastructure will increasingly define power in a multipolar world.
- Personal sovereignty begins with financial sovereignty Learning how to store and transfer value independently whether through Bitcoin, physical assets, or diversified reserves is increasingly essential.
Broken Money delivers a roadmap for understanding and possibly escaping the deep flaws of modern monetary systems. Alden equips the reader to question prevailing assumptions, anticipate structural shifts, and explore viable alternatives in the age of digital finance.
