3 ms·
Money has been getting increasingly less tangible over the past few thousand years. Initially, the value of money was in the materials that made it up; e.g gol
by jondubois 9y ago
Money has been getting increasingly less tangible over the past few thousand years.
Initially, the value of money was in the materials that made it up; e.g gold, silver coins.
Then people started paying with paper backed by gold; so although the paper itself had no value, it could be used to redeem gold.
... People got used to paper.
Then people started paying with paper fiat currencies not backed by anything.
Then people started paying with electronic numbers on computer screens in their bank accounts backed by the fiat paper money.
... People got used to digital numbers in their bank accounts.
Now we have cryptocurrencies which are backed by the electronic numbers in our bank accounts.
It does seem like a logical progression.
- neilwilson 9y agoMoney has never been tangible. It always has been a token for a debt owed by somebody. There is no difference between a paper bill, a coin and a cheque other than the account it references.
- jondubois 9y agoThere is a huge difference between a coin and a paper bill. Unlike the paper bill, the gold coin is both a currency and a commodity - It has many useful properties. It can be melted down and turned into jewellery, used in electronics, tooth fillings, glass-making, paint, etc... Fiat money can be exchanged for other things but fiat money in itself cannot be converted into anything useful. Destroying fiat currency to sell the underlying material is illegal in most countries. When gold coins were currency, people would shave slivers of gold from their coins to pay for small things. This emphasises that the value of the currency was entirely in its material. The value of a gold coin as a currency was equal to its value as a commodity.
- neilwilson 9y agoYou've obviously never made a paper plane out of a bank note. Or had one with a printing error where it becomes a collectible artwork. The value of any coin is far greater than its metal value in any normal system. Gold included.
- stephen_g 9y agoIt's worth reading "Debt: The First 5000 Years" by anthropologist David Graeber. It's actually crazy how much of what most people think about money (such as the above) has actually no anthropological or historical evidence.