re: #297 GunstarGreen

Currency only has ‘value’ insofar and as long as people are willing to accept it in trade for goods and services. The idea is, somebody is engaging in a trade with you, but they don’t have any good or offer any service that you want. Normally, this would stop the trade cold, but with currency, they can give you a generic placeholder that most people agree carries a certain weight, and you take that in trade instead. Then you can take this agreed-upon placeholder and trade it to someone else that has a good or service that you actually want, but to whom you can provide no desirable good or service.

Thus is economy.

After the zombie apocalypse happens, your money — whether that’s in bills or in gold — will be worthless. Because nobody will be willing to accept some paper or shiny metals in place of something they can actually use to survive then and there, like a good can of beans. Or maybe a roll of duct tape.

Actually, take currency one step further. Currency only has ‘value’ insofar and as long as people are willing to accept it in trade for goods and services and are unwilling to trust you will exchange in kind at a later time.

Currency is what you use to trade with strangers.

That means both parties must agree the placeholder has relative value.

Bitcoins could have been - and indeed could someday be - money. But it requires that any parties agreeing to use them as a placeholder trust and believe that their relative value will remain generally constant for the practical future (till they can be exchanged as a deferred trade).