Posted 08/04/2014 at 4:07 PM
Posted 3 years ago
How old were you when you realized that money is just paper? It’s just paper, it’s not backed by gold or some other shiny metal, it’s just paper. And it’s relatively useless paper (you can’t draw on it, it’s uncomfortable to blow your nose with it, and it burns too quickly to be firewood). Even if it were backed by gold, who would really care? Gold is just a shiny metal and it’s not really valuable in terms of utility either. To state the obvious, money is just an idea.
Apparently, the world is now coming to its senses while going crazy at the same time. The use of cash and checks is steadily declining and ecommerce is on the rise. People are using their credit cards and other digital methods more often than cash to pay their debts. In other words, money, the world’s wildest idea, is becoming even more of just that: an idea. And what I mean by that is that money is losing its tangibility. Maybe soon, we’ll rid ourselves of cash all together and live by the digital dollar. Think about how many small merchants have already adopted mobile credit card readers into their company. Or about apps like Venmo, which allows users to pay each other via credit for virtually anything.
This brings to mind an immediate question. Is the liquidation of cash a good thing? Would it be wise for us to maintain the illusion of tangibility or is it just too obvious to sustain at this point? And how do you maintain the assigned value of assets, once you realize the value of any commodity is arbitrary. Just some food for thought.