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>You can actually "mine" paper dollars as well: it's called counterfeiting. The counterpart to mining coins would be to invest dollars and "mine" interests.
by addandsubtract 13y ago
>You can actually "mine" paper dollars as well: it's called counterfeiting.
The counterpart to mining coins would be to invest dollars and "mine" interests.
- crimsonalucard 13y agocounterfeiting is a closer counterpart in my opinion as interest is capped by the amount of money you have while mining is only capped by time and porcessing power. Anyway, all the money generated from the Fed, loans and interest is complicated to think about. I thought it was simpler to illustrate the whole thing with "printing money." Most people can perceive the bad part of counterfeiting and relate that to excessive mining, which is basically the point I was trying to convey.
- judk 13y agoThat is not mining. Mining dollars happens when when banks engage in fractional reserve banking, lending out money that is simultaneously "in" a depositor's account. But that doesn't create money, so much as temporarily creates an illusion of more money existing, hoping that there will not be a bank run to withdraw all of it. With non-reserve banking, when gold is passed around as money (possibly with seignorage), it is mined by digging in dirt.