AraiBob
New member
Hi,
I just 'joined' the adventure of money vs currency, real vs fiat, etc.
I looked for a list of characteristics of money and found only general hints, incomplete...
p { margin-bottom: 0.25cm; line-height: 120%; }
First written 20150525 in email.
I began this list with the 'recognized' Seven characteristics of good money...
1) It must be durable, which is why we don’t use wheat or corn or rice.
2) It must be divisible, which is why we don’t use art work.
3) It must be convenient, which is why we don’t use lead or copper.
4) It must be consistent, which is why we don’t use real estate.
5) It must possess value in itself, which is why we don’t use paper.
6) It must be limited in the quantity that is available, which is why we don’t use aluminum or iron.
7) It should have a long history of acceptance, which is why we don’t use molybdenum or rhodium.
What is missing from this list? How about...
Portable - the money must be portable, easy to carry around the amounts you need.
Uniformity or Consistency. You want the process to be 'similar' regardless of where you 'spend' or 'deposit' the money.
When I began looking at Crypto-currency, I looked for the list of desirable characteristics, and did not find one. I found different 'details' for each kind / type of digital money, which means they are 'pushing' their strengths, and hiding their weaknesses.
I considered this a warning sign. So, I went 'back' and decided I would list the issues with today's money that I think a cryptocoin could help solve. Once I have that, I can compare each kind of money and see how many of them satisfy the set of 'ideal' or 'preferred' characterstics...
A. Bank Fees. Anytime you want to pay online, the bank gets a fee. Anytime you want to send money they get a fee. Any time you remit between nations, you pay a fee. If you want to exchange Euros for USD, you pay a fee.
The fees are based on 'ancient history'. The effort it took to move money around in the 1960s was substantial, and the fees today still reflect those difficulties. There are exceptions, but they are not the norm. We know the costs of moving money between nations is much less today, yet the fees are still too high.
Nation to nation transfer fees. Anywhere from 5 percent to 40 percent. This weighs heavily on a Filipino Maid in Hong Kong wanting to send USD50 to her family in Cebu. If she is paid in Hong Kong Dollar, there is a fee to make it USD, then another fee to make it Philippine Peso later. This is not longer necessary, if you had a way for her to use an atm that connects, as needed, via internet anywhere in the world.
B. Traceable? - Cash vrs debit and credit cards. Real cash has no audit trail, and no tracking. Debit and Credit cards make it easy for police, or CIA to determine you, and who you paid.
C. Anonymous, by default? Most anything you do, other than cash, means you are not anonymous. Nor is the person you are paying. Cryptocurrencies could return us to being anonymous.
D. Secure. There was a time when bank accounts were secure. Today, not so. Among the 'thieves' taking money out of your account? The bank, state and local govts, the Federal Govt via its many financial arms. And the ever present boogie man, the hacker.
Cryptocurrencies should make theft in this manner extremely difficult.
E. Privacy protections. A bank can easily know who banks with them, and which of them have the highest balance. Cryptocurrencies should make this another impossible task. If the bank does not know, they cannot report it to the govt. Nor can they report 'suspicious financial activity'.
F. Protections from Govt foolishness. Printing 4 trillion USD over the last 4 years? In cryptocurrencies, not possible. Most financial activity done by Govts are also based on decades (or hundreds of years) notions and history. Cryptocurrencies should neutralize those things, too.
G. Regulation – Has governments attempted to over-regulate the use, and the companies?
H. Taxable – if the 'value' of the money increases, is that increase taxable? If the value decreases, can you use that loss on your taxes?
I. Stock-like – Is the normal usage of the money like a stock or security?
J. How to Access? - cash in my pocket (from the bank). ApplePay? Android Phone? Card swiper at the merchant?
K. Speed of Use – How quickly can the money be used to make a purchase?
L. How many users?
- - - - -
Those are the positive things. How about a few negatives?
1) If you lose your cryptowallet, what happens? If your password into your 'wallet was your fingerprint, and it becomes scarred, or you loose that finger in an accident, what happens?
2) can you remember a password? Can the bad guys force you to divulge that password?
3) 'statements'? do you want statements to remind you of where you spent money? Can you prove to a retailer you paid for something, when it has not been delivered? I don't know this is an issue, but I have heard NOTHING on this kind of thing.
4) if cryptocurrencies can be 'gamed', how do you protect yourself?
First: Money is a store of value. If I work today and earn 25 dollars, I can hold on to the money before I spend it because it will hold its value until tomorrow, next week, or even next year. In fact, holding money is a more effective way of storing value than holding other items of value such as corn, which might rot. Although it is an efficient store of value, money is not a perfect store of value. Inflation slowly erodes the purchasing power of money over time.
Second: Money is a unit of account. You can think of money as a yardstick-the device we use to measure value in economic transactions. If you are shopping for a new computer, the price could be quoted in terms of t-shirts, bicycles, or corn. So, for instance, your new computer might cost you 100 to 150 bushels of corn at today's prices, but you would find it most helpful if the price were set in terms of money because it is a common measure of value across the economy.
Third: Money is a medium of exchange. This means that money is widely accepted as a method of payment. When I go to the grocery store, I am confident that the cashier will accept my payment of money. In fact, U.S. paper money carries this statement: "This note is legal tender for all debts, public and private." This means that the U.S. government protects my right to pay with U.S. dollars.
I assume there are characteristics I have not thought of, help me, please?
Ok, now to make a table from which I could begin to do comparisons...
Feature
USD Cash
Checks
Credit Cards
BitCoin
Au and Ag
Durable
Divisible
Convenient
Consistent
Possess Value
Limited Quantity
Acceptance
Usage Fees?
Traceable?
Secure
Anonymous
Privacy Controlled by User
Government Manipulation
Lost or stolen
Statements
Gameable?
Regulation
Taxable
Stock-Like?
How to Access
Speed of Use
How Many Users?
Sorry for the length. Advice and opinion are all accepted...
I just 'joined' the adventure of money vs currency, real vs fiat, etc.
I looked for a list of characteristics of money and found only general hints, incomplete...
p { margin-bottom: 0.25cm; line-height: 120%; }
First written 20150525 in email.
I began this list with the 'recognized' Seven characteristics of good money...
1) It must be durable, which is why we don’t use wheat or corn or rice.
2) It must be divisible, which is why we don’t use art work.
3) It must be convenient, which is why we don’t use lead or copper.
4) It must be consistent, which is why we don’t use real estate.
5) It must possess value in itself, which is why we don’t use paper.
6) It must be limited in the quantity that is available, which is why we don’t use aluminum or iron.
7) It should have a long history of acceptance, which is why we don’t use molybdenum or rhodium.
What is missing from this list? How about...
Portable - the money must be portable, easy to carry around the amounts you need.
Uniformity or Consistency. You want the process to be 'similar' regardless of where you 'spend' or 'deposit' the money.
When I began looking at Crypto-currency, I looked for the list of desirable characteristics, and did not find one. I found different 'details' for each kind / type of digital money, which means they are 'pushing' their strengths, and hiding their weaknesses.
I considered this a warning sign. So, I went 'back' and decided I would list the issues with today's money that I think a cryptocoin could help solve. Once I have that, I can compare each kind of money and see how many of them satisfy the set of 'ideal' or 'preferred' characterstics...
A. Bank Fees. Anytime you want to pay online, the bank gets a fee. Anytime you want to send money they get a fee. Any time you remit between nations, you pay a fee. If you want to exchange Euros for USD, you pay a fee.
The fees are based on 'ancient history'. The effort it took to move money around in the 1960s was substantial, and the fees today still reflect those difficulties. There are exceptions, but they are not the norm. We know the costs of moving money between nations is much less today, yet the fees are still too high.
Nation to nation transfer fees. Anywhere from 5 percent to 40 percent. This weighs heavily on a Filipino Maid in Hong Kong wanting to send USD50 to her family in Cebu. If she is paid in Hong Kong Dollar, there is a fee to make it USD, then another fee to make it Philippine Peso later. This is not longer necessary, if you had a way for her to use an atm that connects, as needed, via internet anywhere in the world.
B. Traceable? - Cash vrs debit and credit cards. Real cash has no audit trail, and no tracking. Debit and Credit cards make it easy for police, or CIA to determine you, and who you paid.
C. Anonymous, by default? Most anything you do, other than cash, means you are not anonymous. Nor is the person you are paying. Cryptocurrencies could return us to being anonymous.
D. Secure. There was a time when bank accounts were secure. Today, not so. Among the 'thieves' taking money out of your account? The bank, state and local govts, the Federal Govt via its many financial arms. And the ever present boogie man, the hacker.
Cryptocurrencies should make theft in this manner extremely difficult.
E. Privacy protections. A bank can easily know who banks with them, and which of them have the highest balance. Cryptocurrencies should make this another impossible task. If the bank does not know, they cannot report it to the govt. Nor can they report 'suspicious financial activity'.
F. Protections from Govt foolishness. Printing 4 trillion USD over the last 4 years? In cryptocurrencies, not possible. Most financial activity done by Govts are also based on decades (or hundreds of years) notions and history. Cryptocurrencies should neutralize those things, too.
G. Regulation – Has governments attempted to over-regulate the use, and the companies?
H. Taxable – if the 'value' of the money increases, is that increase taxable? If the value decreases, can you use that loss on your taxes?
I. Stock-like – Is the normal usage of the money like a stock or security?
J. How to Access? - cash in my pocket (from the bank). ApplePay? Android Phone? Card swiper at the merchant?
K. Speed of Use – How quickly can the money be used to make a purchase?
L. How many users?
- - - - -
Those are the positive things. How about a few negatives?
1) If you lose your cryptowallet, what happens? If your password into your 'wallet was your fingerprint, and it becomes scarred, or you loose that finger in an accident, what happens?
2) can you remember a password? Can the bad guys force you to divulge that password?
3) 'statements'? do you want statements to remind you of where you spent money? Can you prove to a retailer you paid for something, when it has not been delivered? I don't know this is an issue, but I have heard NOTHING on this kind of thing.
4) if cryptocurrencies can be 'gamed', how do you protect yourself?
First: Money is a store of value. If I work today and earn 25 dollars, I can hold on to the money before I spend it because it will hold its value until tomorrow, next week, or even next year. In fact, holding money is a more effective way of storing value than holding other items of value such as corn, which might rot. Although it is an efficient store of value, money is not a perfect store of value. Inflation slowly erodes the purchasing power of money over time.
Second: Money is a unit of account. You can think of money as a yardstick-the device we use to measure value in economic transactions. If you are shopping for a new computer, the price could be quoted in terms of t-shirts, bicycles, or corn. So, for instance, your new computer might cost you 100 to 150 bushels of corn at today's prices, but you would find it most helpful if the price were set in terms of money because it is a common measure of value across the economy.
Third: Money is a medium of exchange. This means that money is widely accepted as a method of payment. When I go to the grocery store, I am confident that the cashier will accept my payment of money. In fact, U.S. paper money carries this statement: "This note is legal tender for all debts, public and private." This means that the U.S. government protects my right to pay with U.S. dollars.
I assume there are characteristics I have not thought of, help me, please?
Ok, now to make a table from which I could begin to do comparisons...
Feature
USD Cash
Checks
Credit Cards
BitCoin
Au and Ag
Durable
Divisible
Convenient
Consistent
Possess Value
Limited Quantity
Acceptance
Usage Fees?
Traceable?
Secure
Anonymous
Privacy Controlled by User
Government Manipulation
Lost or stolen
Statements
Gameable?
Regulation
Taxable
Stock-Like?
How to Access
Speed of Use
How Many Users?
Sorry for the length. Advice and opinion are all accepted...
Keeping quiet and seeing how it develops, just one point. Gold will be brought up at some stage and how long its been used for, however its only worked long term (ie. millenia) when there's been a means of circulating it from top to bottom such as the wealthy giving a percentage to the poor in Islam, without that the top grows exponentially and the bottom starves, fixed quantity cryptos have the same flaw. Fixing it needs a re-think of money, imho value is the first thing to consider before the means of transferring it otherwise we end up in the same situation as now, many times more money in the world than the total of real things to exchange it for.