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Don't cryptocurrencies break that model? They are financial assets in the economy that are not created or presently controlled by governments.
by andyspicer 10y ago
Don't cryptocurrencies break that model? They are financial assets in the economy that are not created or presently controlled by governments.
- RobertoG 10y agoIt depends on your definition of money. From my point of view, cryptocurrencies are financial assets but not money. They are not an IOU (https://en.wikipedia.org/wiki/IOU https://en.wikipedia.org/wiki/IOU). Government money is a IOU because you are promised that it (and only it) will be accepted as a payment by the state. Anyway, state money can never be totally replaced at least that the government accept payment taxes in the new currency. And why people would start using other currency if they have to get the official currency for taxes payment?
- branchless 10y agoAgreed. Acceptance for tax payment is what imbues money with value.
- RobertoG 10y agoI read your comments and I think you are missing only a few pieces of the puzzle. I recommend you to investigate Modern Monetary Theory. It's what made me fill the holes in my understanding (the bigger holes, at least).
- branchless 10y agoI'm familiar with MMT and my understanding is that sites like positive money push this perspective, that banks create money: http://positivemoney.org/how-money-works/how-banks-create-money/ http://positivemoney.org/how-money-works/how-banks-create-mo...