"...The idea that money is a standard commodity originated in the hypothetical barter economy imagined by Adam Smith. He proposed a model that started with people making in-kind exchanges, and then naturally developed a commonly-shared commodity into a measure of value, such as gold and silver, historically. This understanding also underpins the foundations of economic science, which supposes that the most suitable commodity will naturally be chosen as “money” over the course of time.
If we follow this train of thought, we gravitate towards judging and comparing different forms of money based upon their commodity characteristics, which is misleading and damages our understanding of how economies work. Money should not be understood as a thing or a commodity, but as a technology to record value. In other words, money is a common technology adopted by a society to record who owns what. In this understanding, we should compare different money regimes by their technological characteristics instead, and in how they serve their societies in their designated functions..."
My paper in
https://hackernoon.com/a-vision-of-the-internet-of-value-ad187abf5826 It is a bit long with graphs so I won't paste the complete paper here. Comments welcome.
Interesting article.
Social and psychological value of money.
Money today is a symbol of value created by the human imagination with no intrinsic value of its own. A coin or paper currency note has value because people accept it as a symbolic medium of exchange. The process of according value to a symbol is psychological and social. Money is a social institution based on the consent of the population and a psychological symbol based on the consent of the individual.
Money has acquired the all-pervasive value that it possesses today by a slow evolutionary process that can be most easily understood by tracing its social and psychological origins from ancient times.
https://en.m.wikipedia.org/wiki/Social_and_psychological_value_of_moneyAncient money to currency of the Yap Islands to Bitcoin.
Bitcoin/Blockchain technology is a disruptive innovation in the history of money. Fiat/banking system is the result of the slow evolutionary process of money, but Bitcoin is a breakthrough money technology in this evolution process which is keeping up pace with the internet, decentralized, trustless, permissionless, transparent.
Bitcoin is a technological leap in the money system. Majority of the people aren't used to drastic changes, it would take some time for them to change their social and psychological mindset about the technological value of money. The technology behind Bitcoin has the potential to challenge the existing fiat money system and maybe even a universal money system in the future.
