The Future of Money?

[vantyzz]

Money existed in one form or another since ancient times, and they will long exist in the future. This is probably one of the most popular and beloved of all the things that just come up with humanity

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[deisik]

I have provided the logic behind as well as example why keeping monetary base constant would be detrimental.

Hmm, I have gone through the thread again and I don't see that.  This is what I'm asking for, as I don't get it.  How could keeping the monetary base constant be detrimental to anything?   

You are kidding, aren't you?

Your main problem (like BobK's) is that you take a wrong approach to analyzing such issues. You consider money as something inherent to the system or playing an important role. In real life, there is no question about that, but conceptually, money is only utilitarian. You could totally exclude it from consideration for better understanding why things are the way they are. Think not in monetary terms ("6 apples are exchanged for 30 units of money), but directly in terms of goods and their relative values ("6 apples are exchanged for 2 oranges, so 1 unit of oranges costs 3 units of apples"). In this way, you will understand, among other things, why there cannot be overproduction as such since what you would call "overproduction" would be a change in relative values of goods. For example, there is an "overproduction" of oranges, but in terms of relative values this is only a change in these values ("1 unit of oranges now costs 2 units of apples). Real overproduction would be oranges that you can't exchange at all, and they would either rot or get consumed internally. Either way, they are out of this system as well as the system mediated by real money...

OK now I am confused.  New distribution of monetary units (or destruction of them I suppose) is the only way one can not "keep the monetary base constant", right?  I wasn't trying to raise a separate question, sorry for the confusion

Discussing this question makes no sense if you don't understand the basic principles and concepts as well as logic behind money and how it works

[icecube45]

Money existed in one form or another since ancient times, and they will long exist in the future. This is probably one of the most popular and beloved of all the things that just come up with humanity

Yes, the money will still be there because I think money is a payment method that is perfect if done directly. Now there is a digital currency such as bitcoin, and in my opinion it will not replace the money but it will be as an alternative payment other than cash. So that the money will remain and continue to be used in my opinion.

[azguard]

Money existed in one form or another since ancient times, and they will long exist in the future. This is probably one of the most popular and beloved of all the things that just come up with humanity

Yes, the money will still be there because I think money is a payment method that is perfect if done directly. Now there is a digital currency such as bitcoin, and in my opinion it will not replace the money but it will be as an alternative payment other than cash. So that the money will remain and continue to be used in my opinion.

well said for alternative paying but for this it will take time to happen
we can hope for it sooner but i think it will take 10 year at least for this to be reality in any point
but btc popularity will increase in 10 year and this may be key factor for payment and it will come to maybe 50-50 where individuals will choose what kind of payment method will he use

[hawkins]

of course money will always be used in the future. I feel it will never change, perhaps, there will be the addition or subtraction of numbers in the money that we use, but, basically use remains the same. Well, it's the same as the current bitcoin. like any form, bitcoin is predominantly used as a means of transaction, and business

[sobsitesearch]

Fiat money is always exist even in the future since this is government regulated currency but we do not know if the digital currency would be exist in the next 20 - 30 years from now.

[Positid]

Fiat money is always exist even in the future since this is government regulated currency but we do not know if the digital currency would be exist in the next 20 - 30 years from now.

It's true, though we are in the technology world there are still people who prefer to use the old money that we are currently using now. It's pretty simple because we do not need to have an internet to be able to transact. While digital currency will be the new trend but only for those people who are constantly using online transaction.

[Mastsetad]

Fiat money is always exist even in the future since this is government regulated currency but we do not know if the digital currency would be exist in the next 20 - 30 years from now.

Digital currency would surely exist, but we cannot know if that will be bitcoin or something else, because we all know that governments wont accept bitcoin or any other crypto currency that are anonymous or not controllable so they might make their own and then use them in place of fiat in future.

[serjent05]

for sure. local currency will not be replace in any aspects paper money still the most used currency
inside a country we cant change that in anyhow many things will need to discuss about that.

I do agree that local currency will stay no matter how many cryptocurrency are created out there.  paper money maybe the most used tools of money today but i think cashless society had been promoted to several country, and probably will replace paper money in due time.  yes we can't change it as the government is the only authority to decide on that.

[BobK71]

I guess you understand what this will lead to?

If you don't, I'll try to explain. I will talk about goods only but everything is equally applicable to services as well. Let's assume that the amount of money is constant. If the amount of goods increases that would necessarily lead to price deflation, i.e. you will be able to buy more goods with the same amount of money (or a unit of money will buy more goods). If the amount of goods decreases, that would necessarily lead to price inflation, i.e. you will be able to buy less goods with the same amount of money (or a unit of money will buy less goods). Both of these cases will cause imbalances in the economy simply because the changes in the value of money (i.e. how much a unit of money can buy) in real life don't propagate instantaneously through the economy

That would lead, for example, to some people getting unwarranted advantages over other people since they could either buy goods cheaper than they should or refrain from buying goods dearer than they should

Thanks for helping me talk through this line of argument. 

You suggest that if the amount of some good increases (increased production), the price in terms of a static money supply would decrease.  And of course the inverse, if the amount of the good decreases, the price in terms of a sound money unit will go up.  I have claimed that these are natural things that should be embraced as part of free market price discovery, providing signals to producers and consumers

You are just claiming that without giving any viable explanation why it is so. Obviously, this won't work. I have provided the logic behind as well as example why keeping monetary base constant would be detrimental. You did nothing to substantiate your claims. Further, there is nothing that would prevent a free market price discovery if the total amount of goods is balanced with the amount of money in circulation. In fact, that mechanism would work even better. You seem to be erroneously implying that the relative values of goods against each other should remain the same...

There is nothing that would support that point

Are you also suggesting that some new distribution of monetary units (in any way) could somehow be appropriate in either of these cases?  I really don't see that at all, so I would appreciate some discussion of how that could in any way help with existing price signaling, or in any way whatsoever

Once again stop speaking for myself. I'm suggesting nothing in this regard. This is a separate question

Why are fluctuating prices a bad thing?  If there is an over-supply of something, prices going down would dis-incentivize production, as they should

Basically same as above. You also implicitly suggest that the relative values of goods are somehow fixed while they are not

Let's face it -- all of this talk can be resolved by a simple question: are the elites basically honest and benevolent to the extent that they can be trusted with money management?

My answer is no, and yours seems to be yes(?)

On that basis, we'll never agree on anything downstream, such as the above.

[bajing]

for sure. local currency will not be replace in any aspects paper money still the most used currency
inside a country we cant change that in anyhow many things will need to discuss about that.

I do agree that local currency will stay no matter how many cryptocurrency are created out there.  paper money maybe the most used tools of money today but i think cashless society had been promoted to several country, and probably will replace paper money in due time.  yes we can't change it as the government is the only authority to decide on that.

it will never happened even though the technology would be more sophisticated, the Government will not ever dare to take the risk due would be easy occurrence of theft, money laundering, etc. that make them on problems even though can be traced, but it will take more time and much different with paper money although there is counterfeit Money but easy for us to know that's counterfeit money.

[deisik]

Let's face it -- all of this talk can be resolved by a simple question: are the elites basically honest and benevolent to the extent that they can be trusted with money management?

No, this discussion cannot be resolved by answering this question

Just in case, I don't consider the elites to be honest and benevolent (and it seems that I have already expressed this view before). They had severely abused in the past and most likely will continue to abuse the monetary tools in the future, but this is not relevant to the issue being discussed. In fact, it doesn't even involve these types (whoever you might mean by them). In a sense, it is purely mathematical as well as logical question, and thus it should be treated as such, without bringing in irrelevant actors

[Bitcoinsummoner]

for sure. local currency will not be replace in any aspects paper money still the most used currency
inside a country we cant change that in anyhow many things will need to discuss about that.

I do agree that local currency will stay no matter how many cryptocurrency are created out there.  paper money maybe the most used tools of money today but i think cashless society had been promoted to several country, and probably will replace paper money in due time.  yes we can't change it as the government is the only authority to decide on that.

it will never happened even though the technology would be more sophisticated, the Government will not ever dare to take the risk due would be easy occurrence of theft, money laundering, etc. that make them on problems even though can be traced, but it will take more time and much different with paper money although there is counterfeit Money but easy for us to know that's counterfeit money.

Bitcoin is anonymously transaction and i think government don't granted bitcoin to be a future money.. but since bitcoin is a part of technology for new generation and i think we can also use it the same as atm as our alternative payment locally but the problem they will added a tax for it..
This is i think many people will not accept if they will added a tax for transaction..  that many people who are using bitcoin do not want it..

[BobK71]

Let's face it -- all of this talk can be resolved by a simple question: are the elites basically honest and benevolent to the extent that they can be trusted with money management?

No, this discussion cannot be resolved by answering this question

Just in case, I don't consider the elites to be honest and benevolent (and it seems that I have already expressed this view before). They had severely abused in the past and most likely will continue to abuse the monetary tools in the future, but this is not relevant to the issue being discussed. In fact, it doesn't even involve these types (whoever you might mean by them). In a sense, it is purely mathematical as well as logical question, and should be treated as such, without bringing in irrelevant actors

What I meant was that your trust in the elites was implicit in your arguments about how prices "should" behave, as opposed to allowing a totally free market to determine prices.

The "should" implicitly argues, even if you don't say so, that some central power should manage money so that the happy condition occurs.  (Otherwise what would be the point of saying how prices "should" go?)  Implicit in this argument, in turn, is that the central powers can be trusted.

[deisik]

Let's face it -- all of this talk can be resolved by a simple question: are the elites basically honest and benevolent to the extent that they can be trusted with money management?

No, this discussion cannot be resolved by answering this question

Just in case, I don't consider the elites to be honest and benevolent (and it seems that I have already expressed this view before). They had severely abused in the past and most likely will continue to abuse the monetary tools in the future, but this is not relevant to the issue being discussed. In fact, it doesn't even involve these types (whoever you might mean by them). In a sense, it is purely mathematical as well as logical question, and should be treated as such, without bringing in irrelevant actors

What I meant was that your trust in the elites was implicit in your arguments about how prices "should" behave, as opposed to allowing a totally free market to determine prices

I'm curious why did you get such an impression, that I'm somehow trusting the elites? I can't fathom either where you saw in my posts references to how the prices "should" behave. On the contrary, I'm inclined to think that it should be pretty evident from my posts that it is entirely up to free market forces to determine the relative values of goods (just stop thinking in money terms)...

In fact, the whole concept would be meaningless overall were it not exactly this way

[rickadone]

Fiat money is always exist even in the future since this is government regulated currency but we do not know if the digital currency would be exist in the next 20 - 30 years from now.

Digital currency would surely exist, but we cannot know if that will be bitcoin or something else, because we all know that governments wont accept bitcoin or any other crypto currency that are anonymous or not controllable so they might make their own and then use them in place of fiat in future.

Yes, digital currency is the need of the day, and we cannot deny that fact, but I think not a single currency replace bitcoin, even if it is created by the government, as it will be a regional and centralized currency while bitcoin is decentralize crypto currency, therefore the status of bitcoin will remain the same and is not going to decrease.

[deisik]

The "should" implicitly argues, even if you don't say so, that some central power should manage money so that the happy condition occurs.  (Otherwise what would be the point of saying how prices "should" go?)  Implicit in this argument, in turn, is that the central powers can be trusted

I see your point but you can think of that central power as a money God of sorts, to better see the concept. In reality, it is not needed, and money can be created as well as destroyed in a fully decentralized way. In any case, it could be argued that to bootstrap a monetary system, you would still need some authority even if the amount of money was to be kept constant. But since this is obviously not so (e.g. gold used as money didn't depend on or need any central power), there is no reason either to think that it should necessarily require a centralized authority (say, government or central bank) to manage money after it has been bootstrapped...

But this is another question, anyway

[funkenstein]

You are kidding, aren't you?

>
If you don't, I'll try to explain. I will talk about goods only but everything is equally applicable to services as well. Let's assume that the amount of money is constant. If the amount of goods increases that would necessarily lead to price deflation, i.e. you will be able to buy more goods with the same amount of money (or a unit of money will buy more goods). If the amount of goods decreases, that would necessarily lead to price inflation, i.e. you will be able to buy less goods with the same amount of money (or a unit of money will buy less goods). Both of these cases will cause imbalances in the economy simply because the changes in the value of money (i.e. how much a unit of money can buy) in real life don't propagate instantaneously through the economy

It seems like we are making the same point here, so I'm not sure the source of disagreement.  You describe above how increased quantity of a good will lead to decrease in it's price as valued in a constant-supply monetary token.  Isn't this how markets are supposed to work?  Supply goes up, demand constant, as we have both been saying..  lower price. 

As BobK71 points out, allowing individuals to add tokens to the system can never work because of practical considerations (massive losses).  Perhaps I am wrong but it seemed that you were claiming that an adjustment to monetary tokens in accordance with production of certain goods could make sense if somehow those practical considerations were solved.  As we are in general agreement on other issues I thought I'd pursue the inquiry and see if I could understand this viewpoint.  If the viewpoint is that prices vs. a monetary unit changing is bad and prices should remain the same no matter how much of a good are present..  well, I still don't see it. 

It is likely that a century of rule-by-counterfeiters has clouded all our judgments so lets try to keep an open mind on this kind of thing    

[EdenHazard]

Fiat money is always exist even in the future since this is government regulated currency but we do not know if the digital currency would be exist in the next 20 - 30 years from now.

Digital currency would surely exist, but we cannot know if that will be bitcoin or something else, because we all know that governments wont accept bitcoin or any other crypto currency that are anonymous or not controllable so they might make their own and then use them in place of fiat in future.

Yes, digital currency is the need of the day, and we cannot deny that fact, but I think not a single currency replace bitcoin, even if it is created by the government, as it will be a regional and centralized currency while bitcoin is decentralize crypto currency, therefore the status of bitcoin will remain the same and is not going to decrease.

how you can say that digital currency are a needs now while there is more than 60% people around the world are out of network and blind technology? it is required at least another 500 years for people to accept it.

from now to 500 years ahead i guess fiat / paper money will remain used as primary currency.

[Positid]

Fiat money is always exist even in the future since this is government regulated currency but we do not know if the digital currency would be exist in the next 20 - 30 years from now.

Digital currency would surely exist, but we cannot know if that will be bitcoin or something else, because we all know that governments wont accept bitcoin or any other crypto currency that are anonymous or not controllable so they might make their own and then use them in place of fiat in future.

Yes, digital currency is the need of the day, and we cannot deny that fact, but I think not a single currency replace bitcoin, even if it is created by the government, as it will be a regional and centralized currency while bitcoin is decentralize crypto currency, therefore the status of bitcoin will remain the same and is not going to decrease.

how you can say that digital currency are a needs now while there is more than 60% people around the world are out of network and blind technology? it is required at least another 500 years for people to accept it.

from now to 500 years ahead i guess fiat / paper money will remain used as primary currency.

By still waiting for 500 years, I guess bitcoin is not really possible to become the future of money, it's still the money but would not dominate the world as the mainstream currency, it's hard to understand why people are too positive that it would happen when it's not justified anymore.