this post was submitted on 08 Feb 2025
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Don't be mean. I promise to do my best to judge that fairly.
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To be fair, Economics is half imagination and magic. It’s why something like bitcoin could even become a thing.
One of the main things I learned during my economics degree is that money is fake.
Ehhh, not sure I'd go that far. Money, no matter what backs it, is just what people value it as. Just that when backed by real goods, e.g. gold, that it gives people a better reason to value it because the goods are worth something.
Mostly saying, money backed by a good have at least the value of the good itself. Which I would say makes money not fake.
When it's backed by belief, then it's fake.
But then said good only has as much value as we put on it. There's a tacit acceptance of what a group of people decided that good is worth. Its value is as real as we collectively decide it is; it's a construct
Yes, but things like gold have actual uses which give them at least some actual value. Fiat currency is backed 100% by belief.
Gold as a currency only has as much value as people assign to it. It's really no different than a fiat currency.
Fiat currencies are actually backed by the tax liabilities denominated in them. If you are liable for one of my business cards, else a guy with a gun shows up at your door, you suddenly have demand for my business cards.