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Yeah that's true, that happens when trust in the government has been lost, or when trying to avoid taxes. But there's an important distinction there. People use
by amrocha 5y ago
Yeah that's true, that happens when trust in the government has been lost, or when trying to avoid taxes. But there's an important distinction there. People use alternative currencies when the government is incapable of punishing them for doing so, and when the local currency is inconvenient to use, such as during hyper inflation. It has nothing to do with whether they believe it has value or not.
- BoiledCabbage 5y agoYou make two strong arguments about why the value of money is based on people's belief in it's value. And then you just ignore them. As you said, if people don't believe the government will enforce it, it has less value. As you clearly say, it doesn't matter what the government says, it matters what people believe. And it hyper inflation or matters what people believe future value is. You should rethink your definition of money because you've essentially demonstrated its value derives from belief.