Hello, steemians, and welcome to my blog, eh!
So, for this post, I want to ramble on a bit about money. This probably isn't anything new for most of you, but I find the subject a bit interesting. It took me a long time to understand some of the aspects of money, when you look at everything from the viewpoint of scarcity, there are certain things you miss.
First, what is money, what is it actually? You have to understand this before you can understand it's use and power.
Basically speaking, money is simply a standardized means of exchange, nothing more, nothing less. Money is designated specific values, in the U.S. that basic value is the dollar. Obviously, there are multiples of that value, such as the 5 dollar bill, etc, and fractions of that value such as the quarter, dime, etc. Money has no intrinsic value it's self, it's only value lies in what it can be exchanged for. All forms of money are basically the same, they have no value other than what they can be exchanged for. It is only this exchange value that gives any form of money it's value. We could use seashells for money if everyone agreed on their exchange value. The exchange value is where things start to get tricky.
Because I live in the U.S., I'll use U.S. money as my example.
Money, as the medium of exchange, is controlled by laws and backed by the government. Yes, the FED is a private organization, but it is protected by the laws put fourth by the government. The government has the exclusive right to determine what is, and is not money. Thus the counterfeiting laws and attempts at reining in the barter system. At this point, the conversation could go in several directions, but I'd like to talk about the idea of the value that backs the dollar. Everybody says that the U.S. dollar is fiat money with nothing of intrinsic value, such as silver or gold backing it. I would have to disagree with that statement to some extent. The thing that provides the backing and the value of the U.S. dollar is oil. It's called the petrodollar for a reason. Oil has an actual value, it is the primary energy source being used in the world today, so it's in high demand. This is why the U.S. has been bombing the middle east for 15 plus years, control of the oil supply. This is also why the U.S. government clandestinely helped to destroy the economy of Venezuela, they were a large oil producer, and they didn't want to play along with the petrodollar controls that disadvantaged them in the world oil market. This is also one of the reasons that Libya was bombed back into the stone age, they wanted to sell their oil in their own gold backed currency instead of the petrodollar.
When you control the sources of the value of the money, you control the value of the money against all the other money values. I know it's more complex than that, but the U.S. petrodollar is the primary means of trade and exchange for most of the world. All of this is controlled by the FED and the world bank. Countries are bankrupted at the whim of the world bank. This is the macro level of money and control. How does it affect us at the micro level?
Since money is the only legal means of exchange, for the most part, life tends to revolve around the acquisition of money. Most of this thought process, for most of us, revolves around the scarcity mentality. In the society that we live in, we need money for everything, food, clothing, a place to live, electricity, heat, cooling, etc, and the list goes on. These are just the basic needs, the wants are a much larger category for a lot of people. With a few exceptions, such as barter, you need money to exchange for anything you need or want, unless you can grow it or make it yourself, but that's a different story that I'm not going to get into right now.
I'm sure someone will tell me, "I didn't need money to buy this thing, I used bitcoin." OK, let's talk about that for a minute. Yes, people are starting to use bitcoin and other cryptos to buy goods and services, but the value of the bitcoin is still based on the dollar, or other government currency, depending on where in the world you live. When you buy something with bitcoin, you are exchanging the fractional amount of bitcoin that is worth the value of the item in dollars at the time of purchase. Retailers who take bitcoin base the value of it on the value of it's exchange rate for the dollar, or other official currency at the time of exchange. And, for the most part, the values of the other currencies are measured against their value in petrodollars. Another problem that I see with cryptos is that they have no value by themselves, they're not backed by any hard assets such as gold or silver. Their value is simply based on what someone is willing to pay for them. That tends to make their value rather volatile. That volatility doesn't help their value as a means of exchange, the value changes constantly, either up or down.
Cryptos are looked at as an alternate means of exchange, one that the government doesn't have control of, but is that actually the case? You can't use cryptos in the grocery store unless you have one of those crypto debit cards, and the buying power of the crypto is determined by it's value in dollars at the time of purchase. For the most part, you have to exchange your crypto for dollars in order to buy stuff or pay bills. The electric company isn't taking cryptos for payment, at least not yet. You still need dollars for that. Several banks have declared that they will no longer accept deposits from the crypto exchanges. If all the banks got together and did this en mass, the ability to use cryptos would be seriously compromised.
These are my paranoid thoughts on cryptos. What value does a currency have if no one accepts it for exchange? What good are your cryptos if you can't use them for anything? Cryptos have value now, but what if the government bans their exchange for dollars, or use in commerce? Perhasps I am just being paranoid about these questions, but they're still good questions that I have no answers for.
This post got a bit longer than I expected it to, so I'll stop here for now. If you managed to read all the way through it, I hope you found it interesting.
Thanks for stopping by and checking out my post, eh!
As always, feel free to leave a comment or a question if you would like.
May the Steem Force be with you!
