To rewire this understanding, just think of the casino model. It makes us think that a bank deposit is cash ‘inside’ our account, but this is very wrong. A person ‘deposits cash into a bank’, and then is told that they have a ‘bank deposit’ which represents ‘money in their account’. Many people get ensnared in a series of linguistic traps when they talk about bank accounts. The casino model I describe above is actually the best starting point for understanding your bank account. Two different classes, but linked together. The first is a kind of ‘layer one’ base system, while the second is a ‘layer 2’ system. The latter look like coloured plastic disks. The punters know the relationship between the cash and the chips, and also find it very easy to make a distinction between them: The casino has the former. The winner of the chips, by contrast, has increased their ability to demand cash back. This is confirmed by the fact that if you lose all your chips to another punter at the blackjack table, you can’t go back to the cashier to demand anything. It’s like that phrase “you can’t have your cake and eat it too” : you can’t simultaneously demand to own the cash, and the IOU that promises you cash. If the casino tried to confiscate your chips without giving you any cash back, they would be stealing from you, and, similarly, if you tried to keep hold of your chips while grabbing cash back, you’d be stealing from them. You own the chips, which are privately-issued legal promises - IOUs - that can be redeemed back for cash. It’s important to stress that you no longer own the cash. State-issued cash behind the counter, now owned by the casinoĬasino-issued chips in your hand, now owned by you

Chip in casino