If we didn’t have currency, our only means of exchange would be through bartering: I have food, you have clothes. I need clothes, and you need food. I’ll swap

If we didn’t have currency, our only means of exchange would be through bartering: I have food, you have clothes. I need clothes, and you need food. I’ll swap you 5 bags of corn for 3 pairs of socks. Do we have a deal? >> The only way to refute it is to show that yes, such a valuation model exists. It’s complex and inconvenient to barter all day long. So, “we” (society) created a “token” (e.g. USD) to represent the value of our economic goods. I believe 5 bags of corn is worth about $10. You believe 3 pairs of socks is also worth about $10. Now we have a deal, unambiguously, because we have a mutually-agreed asset from which we can both continue to derive value in other markets. So, both statements are true: “all money is imaginary” — because it has no inherent value (OK… I guess I can wipe my ass with it, or light a fire… but I can’t feed or clothe myself with a $10 bill). But, at the same time, it’s not worthless — as we mutually agree to assign it worth, on the basis that others are willing to do so too. > It's really hard to refute someone who says that There’s a good reason it’s hard to refute this… because it’s a fundamental economic principle! As more and more people “agree” that Bitcoin has value, its value grows. A mutually-agreed representation of value (i.e. a “valuation model”), therefore, exists.