Money is a Necessity

An item accepted as payment for goods and services is essentially what money is. In the world, money is currently worth what we already know it to be. The only reason we spend money is to get what we want, to have fun, or to buy what we need in order to live. Every country develops an economy capable of balancing and stabilizing the market and currency. In some cases, people are not aware of the fact that the “economies” of different countries may differ significantly from one another on a number of levels.

Now, the term “currency” has been used and translated in many regions of the world, and each nation has its own interpretation of what “money” really is. Stones were used as money in the Yaps. The currency is unique in that unlike other nations, you do not have to give another person your stone in order to obtain something. Instead, you can claim possession of the stone (money) as if it were nothing. This was a topic discussed in the podcast “The Invention of Money.”

Moreover, this has made me think that, if it were to occur, money might be viewed as anything. Currently, the only forms of currency used in the United States are “bills” and “coins.” We also have cards that can electronically store our money in addition to that. The more you consider it, the more intriguing it becomes. But what if we didn’t pay for things with “bills” and “cards”? What if we employed a common object, like a pebble. Perhaps the value of a little pebble is equivalent to that of a penny, while the value of a larger pebble is equivalent to that of a quarter. Numerous possibilities exist regarding what kind of currency could exist.

Milton Friedman, the writer of “The Island of Stone Money” outlines the main points from the podcast mentioned previously. Friedman discusses many currencies throughout history, with an emphasis on the Yaps from a neighboring island. They traded stones and granted rights to them in exchange for corpses or other items. The stones ranged in size and form, with some being as large as people and others as small as rocks. Friedman recounted how, in order to satisfy the Bank of France’s worries that the United States was departing from the “gold standard,” the Federal Reserve Bank traded dollars for gold on their behalf in the early 1930s. This enables the use of money for purposes other than meeting minimal but necessary costs. Due to this, we are able to interact with others who are different from us and trade services with them because of this.

It is imperative to note that, contrary to appearances, countries on the map of the world would not be able to prosper without money. This is because they would be left on their own to take care of themselves. In a nation, money is viewed as a nation’s “fuel.” Businesses within a nation grow because of the influence of money. It seems that people can only…live…by having money, or at least that is what it seems to be.

Now if we delve a bit further into modern money, Bitcoin, a form of digital currency that functions without a central bank, has taken off. People are raving about this cryptocurrency as a result. Evidently, one bitcoin is equal to around 21,000 US dollars. All of us would have much more money than we could possibly imagine if we all had access to bitcoin. In retrospect, it makes sense that this would be the case; having enough money to cover bills and basic needs.

As I mentioned, Bitcoin is a digital currency, so essentially, it is not “real.” Jeff Reeves, author of the article “Bitcoin has no place in your — or any portfolio” elaborates on one point that stood out to me; how bitcoin has no true value. “Proponents like to talk about how bitcoin has no central bank or authority behind it as a net positive, but that fact also means a lack of true value. A bitcoin, then, is simply worth whatever a random person is willing to pay — derisively known as the “greater fool” theory, because profits rely on your ability to find someone more foolish than yourself who is willing to buy higher.” Even in terms of money, something like bitcoin could not even be on someone’s radar. Within the next several decades, it’s possible that bitcoin may take over and replace traditional currencies, given how quickly technology is evolving.

By extending the concept of money from stones to cryptocurrency, we have undoubtedly done so. In addition to its uniqueness, it possesses a variety of forms, and it continues to add new currencies to the digital market at a rapid rate. Whatever its form, money will always be necessary for the world to function. The notion that we must have money in order to live in this world has increased in popularity.

References

“The Invention of Stone Money” 423: The Invention of Stone Money. This is American Life, WBEZ. Chicago. 7 Jan 2011 https://www.thisamericanlife.org/423/the-invention-of-money

Friedman, Milton, “The Island of Stone Money” Diss. Hoover Institution, Stanford University, 1991https://miltonfriedman.hoover.org/internal/media/dispatcher/215061/full

Reeves, J. (n.d.). Bitcoin has no place in your — or any — portfolio. MarketWatch. https://www.marketwatch.com/story/bitcoin-has-no-place-in-any-portfolio-2015-01-28