Where does the money come from ? #bitcoinpizza answer [challenging 2 minutes read]
"triangle" is a concept.
There are tons of triangles, but just one concept of "triangle".
Thanks to this we can communicate, because we all agree on what a triangle is.
We can create triangles, but we do not create the concept of "triangle": we perceive it with our thinking.
Also "money" is a concept.
We can create "money" but we do not create the concept of money: we perceive it.
Humanity started using commodities as money. They perceived that gold, or shells, could express the quality of "money", and starting using it as a measure of value for their exchanges.
But gold isn't pure money, so it hasn't all the qualities of "pure money".
Ideal money has 3 main qualities:
a) is widespread accepted as unit of measure of value.
b) does not have an intrinsic value, and is reproducible at no cost.
c) it is not a good backup of value.
At a certain point human society understood that using just pieces of paper without intrinsic value would be better than gold. The first to produce this kind of currency where probably Knight Templars in XIV century.
So, where does the money come from?
It is a common practice, a shared agreement, to use a determined currency (one specific type of money) as a measure of value. This common agreement decides that that piece of paper, or that electronic account, has value, or more precisely measures a determined quantity of value of goods and services.
So, we are starting to use a money created by ourselves.
We are taking back monetary sovereignty through blockchain technology.
We are creating the money. The money comes from us.
Steemit.com social helps for the point a) because it creates a market.
Blockchain technology helps for point b): Steem is reproducible at a very low cost.
The design of the network helps for point c), because while Steem Power is a reserve of value (and in fact isn't the money), Steem (the currency) is not.
Some adjustment to the system may be needed in the future to allow prices to be stable and have an inflation around 4-8%, which is an optimal compromise between point a) that requires stability of prices, and point c) that requires the money not to be an efficient reserve of value.
I sincerely want to thank once again the founders, because the design of Steem is really well done, and demonstrates a deep understanding of economics, not very common in this era.
nice post
Thank you so much for your entry! Could you add it as a comment to the main thread? Much appreciated!
the link or the whole post ?
Just a link added to the comments here. If you like, I can add one for you. I want to make sure others interested in this topic can find your post.
Could you elaborate on c? Why is ideal money not a good backup of value?
For 2 linked reasons:
1)if too many people backup their value storing money, there is less circulating money.
2)otherwise a real scam would become possible: people who has much money could just setup a "scam" not spending their money on purpose, wait for deflation to happen, and then spend their money with increased purchasing power
Hey @freiheit, found your article on andrarchists (upvoted obv)
I think you could clarify something here in regards to gold being an impure money. Are you saying that because it is limited it is inherently susceptible to scams? Or are you saying gold is bad because it cost something to reproduce (and therefore an expenditure of unnecessary energy?
Also: You say that a main idea of money is that it isn't a good backup of value... isn't the whole point of money to back up value to be spent at a later date? Does money having the quality of long term storage make it inherently susceptible to scams? I feel like I'm chasing my tale here but you tell me.