Part 2: What is money? Why would someone consider Bitcoin to have value?

slaydraye (45)in #cryptocurrency • 7 years ago

This is now the official GeauxCrypto Steemit page. I have changed the name and the purpose of this steemit from a personal page to a helpful resource to those who would like to learn about crypto, especially those who reside in the LSU area. Hopefully I can help some of you learn a couple of things about overall investing & how cryptocurrencies work.

What is money?

To most of you this seems like a very silly question. After all, money is that green piece of paper with the dollar signs on it, no? But wait a minute.. Isn't it also the digital numbers in my bank account? Yeah! So there's no way Bitcoin can be money, right? I mean it's just some made-up coin with no value and only nerds and criminals use it. I mean that's what my congressmen told me anyway.

Unfortunately, the longer you spend thinking on the idea of what money is, the more you realize you don't really know.. Then you start asking these questions..

What is really necessary for money to have worth?

What are the prerequisites? Do they require a government? If suddenly you are presented with digital money, you start asking, "Is the physical nature of money a requirement of money? Do we need green paper to tell us it's money?"

Things like Bitcoin really make the gears move inside someone's head. When you really think about money, you realize it's an abstraction with no real value itself, however the value lies within what you exchange for money, the products you are able to buy for them. The true value of money lies within the consensus among the general population over what it's worth. If everyone agrees that an apple is worth 3 dollars, the market will sell that apple at 3 dollars & people will buy that apple at 3 dollars. If everyone agrees that Bitcoin is worth $8000 dollars, the market will sell that Bitcoin for $8000 & people will buy that Bitcoin for $8000.

The Different Forms of Money through History

So the biggest fear I encounter when telling someone about Bitcoin and crypto is that they believe cryptocurrencies are not real money. It's not their fault of course, because no one really grows up understanding the function of money or its origins. They see something like Bitcoin and without really understanding the tech behind it, automatically dismiss it as some giant scheme. They're too scared of the volatility. They believe you cannot attain goods or services for Bitcoin. In summation, they end up thinking it's not real money.

And yet I ask those people...
What do you think people said to each other when one day, instead of using the barter system, everyone came to a consensus that seashells and pearls were worth something and started using it as a medium of exchange? "THAT'S NOT REAL MONEY!"

What do you think happened when suddenly people started distributing golden tokens to each other, saying that it was worth something? "THAT'S NOT REAL MONEY! GIVE ME PEARLS AND SHELLS!"

What do you think happened when the US got rid of the gold standard that backed the federal bank notes in the form of green paper and people used it to get goods and services? "THATS NOT REAL MONEY! GIVE ME GOLD!"

What do you think happened when everyone suddenly started using digital numbers and plastic cards to transfer their bank notes digitally? "THATS NOT REAL MONEY! GIVE ME DOLLARS!"

Now, if you followed all that and you read my previous post on the untamperable, decentralized, transparent blockchain coin, one that relies on public consensus and built-in trust, you would realize that Bitcoin and cryptocurrencies are the way of the future. You would realize that this is not some fairy-tale. We are literally living in the future and the mass public has not woken up to this fact, including any doubters.

This is the obvious and most logical step forward in the world of finance. Anyone to deny that will remain in the age of the dinosaurs.