The coconut tree/octopus monetary system

Generally, bankers want us to believe that governments always create inflation when they print money. Consider however…

There are two shipwreck survivors on an island with five dollars in their pockets from their previous life. There are also five clams on the island so that a dollar is worth one clam.

One of the two sailors goes back to the remains of their lifeboat; finds a machete; hacks a coconut tree up into a crude printing press; kills an octopus; uses the octopus ink and the press to print up five new dollar bills; and pays them to the second sailor to dig up 15 more clams. There are now $10 bills on the island, and 20 clams…

The guy has just doubled the value of money on the island by printing it!!!!! The only two meaningful things in this picture were productivity and an element of trust, no gold, silver, platinum, or ASIC arrays were necessary. Obviously, the process did not create inflation. The whole question is HOW a government creates money. If a government creates money the way the two American national banks did in the early 1800s or the way the shipwreck survivor just did, that is, in such a way as to build infrastructure and enhance productivity, that doesn’t create inflation. On the other hand, if a government creates money and uses it to buy votes, fund porkbarrel projects, or fund other nonproductive activities such as gold mining or cryptocurrency mining, that does in fact create inflation.

Again, if there is something I'm missing on this question of bitcoin mining, I'd appreciate somebody telling me about it. On the face of it, it looks to me as if bitcoin is an attempt to create a cybernetic equivalent of an honest gold-based currency system down to the detail of creating an equivalent of the economy surrounding the mining of gold. The main flaw with that is that gold-based monetary systems, honest or otherwise, have never really worked.

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