The Definition of Money (The Economic Definitions) by Kirian "Deso" van Hest

Author:Kirian "Deso" van Hest [Hest, Kirian "Deso" van]
Language: eng
Format: epub
Tags: Money, Economics, Currency, Inflation, Economy
Publisher: Kirian "Deso" van Hest
Published: 2021-07-31T22:00:00+00:00

Chapter 7: Digital Money, Digital Promises

So far, i've largely left out talking about digital forms of currency as there is a large part of human history where no digital technology existed, yet the economy worked anyway. Understanding the fundamental basis for money is still required, even in the digital age, because honestly – computers haven't changed things all that much. They certainly haven't changed us.

Sure, productivity has gone up, but humans are still humans. Our wants and needs have simply translated to a platform that offers more convenient access to them: Paintings have become pictures, TV has become on-demand streaming. But our desire to have access to such things hasn't changed.

The way we see, handle or treat money hasn't changed with the digital age. Yes, now that payments are mostly abstract, it's harder to "feel" what you're spending. But the world economy functions just fine on digital payments, and infact, much better then when we had to truck cash around. I'm certain that, simply through convenience value, digital money will replace physical money entirely in the long term. For it need not be any worse then physical money in all respects, if treated properly.

But before we look to the future, we have to understand the key difference between digital money and physical money. Digital money functions the same as physical money in every sense, except in one aspect:

Digital money can only ever be a promise. It cannot have intrinsic value in and of itself, and therefore, must be linked to an asset with intrinsic value, whatever that may be.

This arises from a problem that i will be describing in the latter half of the book of value, namely that all digital assets have no discernible intrinsic value. I'm sure that's pretty controversial at this point, so i ask patience until the full trilogy has been read (as i've got plenty to say on it in the 3rd book as well, including fixing these problems).

But for now, it suffices to understand that digital money is infinitely fungible, and therefor cannot serve as a value anchor in and of itself!

This comes from the fact that ALL digital assets are fungible: They're just binary 1's and 0's in memory storage space inside a PC somewhere, be it volatile (RAM) or non-volatile (SSDs). And they can be infinitely copied as well: No matter what kind of protections you build in, it's always possible to create a digital image of the storage volume and transplant it on an identical drive. While software may limit the usability of the data, there cannot be any confusion of the data being duplicated, and it's possible to duplicate it further.

In short; Whatever physical, tangible characteristics that digital information has by being stored on one drive, those characteristics are of no consequence. As even if you change those characteristics, that is to say copy the data to another part of the same drive and it therefor cannot possibly be the same data as the electric current representing the data has

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