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> "This is not technically money in that it is not backed by a government." Being "backed by a government" is not a necessary condition for something to be mon
by em3rgent0rdr 9y ago
> "This is not technically money in that it is not backed by a government."
Being "backed by a government" is not a necessary condition for something to be money. From wikipedia: "Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts in a particular country or socio-economic context. ... Money is historically an emergent market phenomenon establishing a commodity money, but nearly all contemporary money systems are based on fiat money." Even though most contemporary money systems are fiat, that doesn't mean that all money has to be.
- littlestymaar 9y ago> Even though most contemporary money systems are fiat, that doesn't mean that all money has to be. If you want to avoid deflation you need a supply of money that grow at least as much as total wealth (otherwise the relative value of money is increasing => deflation). That's why gold-based currency are now considered a bad idea (and crypto currencies also, see [1] for illustrations about the deflationnist situation in bitcoin). [1] http://avc.com/2017/08/store-of-value-vs-payment-system/ http://avc.com/2017/08/store-of-value-vs-payment-system/
- em3rgent0rdr 9y ago> "want to avoid deflation" Not necessarily desired. Deflation gets a bad rap, but on the positive side it does encourage sensible economic behavior such as saving and avoid of wasteful spending. > "need a supply of money that grow at least as much as total wealth...That's why gold-based currency are now considered a bad idea (and crypto..." Well there is no requirement to limit the money supply to one currency...