Where does the money come from ? #bitcoinpizza answer [challenging 2 minutes read]

"triangle" is a concept.
There are tons of triangles, but just one concept of "triangle".
Thanks to this we can communicate, because we all agree on what a triangle is.
We can create triangles, but we do not create the concept of "triangle": we perceive it with our thinking.

Also "money" is a concept.
We can create "money" but we do not create the concept of money: we perceive it.
Humanity started using commodities as money. They perceived that gold, or shells, could express the quality of "money", and starting using it as a measure of value for their exchanges.

But gold isn't pure money, so it hasn't all the qualities of "pure money".

Ideal money has 3 main qualities:

a) is widespread accepted as unit of measure of value.
b) does not have an intrinsic value, and is reproducible at no cost.
c) it is not a good backup of value.

At a certain point human society understood that using just pieces of paper without intrinsic value would be better than gold. The first to produce this kind of currency where probably Knight Templars in XIV century.

So, where does the money come from?
It is a common practice, a shared agreement, to use a determined currency (one specific type of money) as a measure of value. This common agreement decides that that piece of paper, or that electronic account, has value, or more precisely measures a determined quantity of value of goods and services.

So, we are starting to use a money created by ourselves.
We are taking back monetary sovereignty through blockchain technology.

We are creating the money. The money comes from us.

Steemit.com social helps for the point a) because it creates a market.
Blockchain technology helps for point b): Steem is reproducible at a very low cost.
The design of the network helps for point c), because while Steem Power is a reserve of value (and in fact isn't the money), Steem (the currency) is not.

Some adjustment to the system may be needed in the future to allow prices to be stable and have an inflation around 4-8%, which is an optimal compromise between point a) that requires stability of prices, and point c) that requires the money not to be an efficient reserve of value.

I sincerely want to thank once again the founders, because the design of Steem is really well done, and demonstrates a deep understanding of economics, not very common in this era.

#Steemit #Steem #money #freemoney

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