> Except it's not hoarded, it's reinvested. The consumption of created value is deferred while accruing interest at a market rate. This interest rate is an impo

> Except it's not hoarded, it's reinvested. The consumption of created value is deferred while accruing interest at a market rate. This interest rate is an important signal to the greater economy weather to start long-term projects now or later. If interest rates are too high, big projects will be financed later while simultaneously incentivizing value producers to defer consumption. To me this is the best regulator for why you don't "drink the bottle of water all at one time". Re hoarding: Some is reinvested. Much is consumed along the way in management fees, reserve requirements, and financial institution profits. It is not optimal. The middle men will be eliminated eventually. Re Interest Rate: The rate is an important signal for bank profits too. Essential to them in fact. There are other signals. And deferring a big project to later may be fine if you are building a high rise in downtown, but delay can be deadly if you're trying to reduce pollution, cure cancer, map a genome, ect. > Money is a naturally occurring phenomena amongst rational actors. Any highly marketable commodity that can be expected to be traded at a later date can act as a form of money - for example, cigarettes in prison. I can't imagine someone wanting their cigarettes to be prone to dissolving. Have you ever smoked a 5 year old cigarette? As for other examples, you can make a bet that oil will be $50 in 5 years, many do, and many lose their shirts(and some make a killing). Volatility rules. >I personally wonder if we can trade without money at all. For example, trading digital certificates that represent real-world assets (stocks, commodities). Prices can be denominated in any asset, and payments go thru a clearing house that matches and settles trades in real time. This would let me go to Subway and buy a sandwhich denominated in Apple stock that I payed for with shares of crude oil stock. It is certainly possible...but stock has its own issues. It is a form of hybrid capital and subject to all kinds of accounting shenanigans.