Dear crypto critics... Money does NOT need backing to be money

in #bitcoincryptocurrency7 years ago (edited)

Again and again we hear that crypto is just a bunch of numbers akin to an email... "who wants to pay $1700 for an email". To understand what money is you have to let go of the notion that theres has to be som additional commodity to make anything money. The point of money is exactly to abstract itself from commodities, to be an accounting system, for pricing commodities as fractions of the amount of money in circulation.

The socalled fiat money we are forced to use now by our rulers, is just as much money as anything else used as money, be that gold, silver or cigarettes and so on. The problem with these commodities is their attributes. If they are easily corroded, dissolved, destroyed, too voluminous etc.. the utility of them are diminishing, but their principle function as money is as valid as the next commodity.


The way to the monetary system we have now goes over silver and gold and then an inevitable delinking from any commodity and handled completely by the central banks. The problem is not that paper (and numbers) are not money, it is that they are too easily counterfeit by those in control of the system. It is only because we are forced to pay our taxes with fiat, that the demand is high on this corrupted money. But still it is, otherwise it would not work in any store you use anywhere.

If you hand in recycling bottles to the automated delivery machine, you get a paper receipt for the amount of money they represented. But it is not in the moment that this receipt is printed out that the bottles become valuable, they were already, just not in any other form than a mental accounting. So the value of a commodity does not need a money beside it at all times for that commodity to have value. The value is still there if there were no form of money at all... it just would not be expressed in a fraction of a money-pool.

As I have pointed out in my article: "An essay on the understanding of money" ... money is NOT a commodity but an accounting system. This accounting system would function if we could remember an infinate number of debts or unfinished trades, which is in fact what it is. But we cannot and we are not always honest and may "forget" a debt owed if we could get away with it. Therefore an accounting system is very useful. The most useful commodity in history (until 2009) was gold since noone can easily create new units and claim commodities with them.

So when we know that money is not a commodity but an accounting system, we just need to create a money that makes this accounting as effectively as possible. This is crypto at the moment. It brings three additional attributes that the presently used fiat and gold cannot supply, which is "uncounterfeitability", "micropayments" and "momentary (or very fast) global transmission". These are extremely valuable attributes for a money and the reason why cryptos are going render the present monetary system obsolete as its dinosaur like service and corruption will make it look ridiculous.


Some money are not living the dream.WE ALL LIED,NOBODY IS LIVING THE DREAM.....Like my country currency - NAIRA

There are so many conflicting terms and definitions that it's silly. That MIGHT be the point.
I was taught in economics 101 half a century ago that 'money' was a portable store of wealth.
Currency is a whole nother thing. Today currency (except for crypto) are typically IOU'S

Terms are just words. Philosophically there can only be one correct way to understand money. It may have various effects, but the nature of it can only be one thing. Difficulty to grasp money and the evil need to cover up the corruption creates all the various terms

money, currency and debt are NOT the same thing.

Oh yes they are, that is my whole point. The accounting is debt owed in an unfulfilled transaction. How this debt is represented, by memory, by paper, by gold, by cigarettes etc.. is not interesting, except for those commodities ability to not be counterfeited etc. You could say that debt is what creates money. The debt owed in an unfulfilled transaction, is what spurs the need for money. I equalize debt and money. Money is permanent and indistructable circulating debt... you only have money because you are owed some sort of commodity or service and have access to it... Tom Hanks on his solitary island, have no need for an accounting of unfulfilled trabsactions and therefore no needfor money

Hi @mandibil
@barbro from Ramta headquarter here (not vikings anymore, to many wanted to be Vikings).

This whole post is the best that I ever saw on money. It made everything very clear and easy to understand for me. It is how I always have seen money my self, but could not put into words the way you did. Now it is not only me that understand it but my brain too.

So, thank you very much for this post!

Hey @barbro glad to help. Did you read the quoted article also ?

Hi again @mandibil

I did read it the first time you wrote it, but since you asked me I did read it again. It gave me even more to read it again.

glad to be of help :-)

nope..that is incorrect.
it's entirely possible to have money without any debt.

If everyone got everything at once that they ever wished for, would we need money ?

they wouldn't
back in my g'g grand parents day they called it 'spending money' and they mostly didn't have any
They grew or made for themselves everything they needed.
living on the farm..back in the hills.
it's still possible...not LIKELY...but possible.

"conflicting terms and definitions"

Yeah but we have the same with the cryptoworld :-)

Satoshi never were thinking on terminology of that all - in fact that make it also hard to understand for non tech-savy people. There were in 2013 even a large discussion in BTC community if we should rename the stuff all.

yup...words can be used to conceal as well as reveal. What's the goal?

goal.... mass adoption! :-)

people...please distinguish between currency and money. euro, us dollar, yen .... those are all currencies, not money. for more info watch this short documentary

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