Money's Worth - Deepstash

Bite‑sized knowledge

to upgrade

your career

Ideas from books, articles & podcasts.

Money's Worth

Money's Worth

The financial crisis of 2008 showed that the system can buckle anytime and money may not always be worth the same.

As we get hyper-connected, the state-backed authority of currency, and what Money is really worth, is being rethought. Society has historically tried to invent new forms of currency, most recent being Bitcoin, a cryptocurrency.

7

STASHED IN:

137

published ideas from this article:

MORE IDEAS FROM THE SAME ARTICLE

  • Real money is only gold, and all the other forms of currency in the system are merely different kinds of credit. 
  • Credit is an indispensable part of a functioning economy, so it continues to thrive even with historical setbacks.
  • Gold is the only real 'legal tender'.

The King Williams Administration used to borrow large sums of money used for wars and then levied taxes on ship cargo and spirits to pay back the interest. This gave rise to Banks like the Bank of England, and finally Bank Notes, the currency still used today.

The idea of Facebook's Libra, an attempt to create a new currency made from the architecture that powers Bitcoin, is that the value of new money is not derived from state authority, but a combination of mathematics, global connectivity, and trust that resides in people using Facebook.

The instruments of trade and finance, like paper money, are groundbreaking inventions, put to use by collective acceptance using authority and seals of trust.

Paper Money was pushed as a 'fiat' currency due to an attractive quality: it was guaranteed to trade by the state authority for a specific weight of gold or silver, and couldn't be melted down or devalued.

The financial system in use today is a version of John Law’s system:

Each country in the developed world has a central bank that issues paper money, manages the supply of credit in the interest of commerce, uses fractional-reserve banking, and has joint-stock companies that pay dividends.

Discover and save more ideas by creating a

FREE

Deepstash account.

Develop a

reading habit

, save

time

and create an amazing

knowledge library

.

GET THE APP:

MORE LIKE THIS

Fiat money

Fiat money is a government-issued currency that is not backed by a commodity such as gold. Most paper notes started as being backed by a reserve of valuable commodities, usually gold (the "Gold Standard"). Tying a currency to gold limits inflation and money suppl...

6

STASHED IN:

32

What is money?

Money is a WIDELY ACCEPTED medium of EXCHANGE. Lets analyse each word, they really have a huge importance:

  • Widely: it has to be accepted by many people, otherwise it can’t work.
  • Accepted: It ha...

25

STASHED IN:

168

Bitcoin was born from a crisis

In the middle of the 2008 banking crisis, a group of anarchists, libertarians, and other tech-savvy true believers created digital cash.

In August 2008, bitcoin dot org was registered as a domain. On Halloween the same year, Satoshi Nakamoto put up a white...

14

STASHED IN:

59