Perception of Currency

 Money as itself is economically accepted to have long lasting value and can be a source of power that secures purchasing security. Money became a vastly accepted tool that can hold value over time and used for the purpose of exchange. It can be used as an instrument to assert debt, market prices of goods, and build transaction history between buyer and seller. Having a powerful insight of the concept of money and how it’s used to operate in society can make or break someone’s personal view on money’s value. However, does the form of currency change the value it is presented as? 

 Money is just information that switches positions without being physically seen. Something that reinforces paper money not being anything more than a universally accepted concept is a line from “The invention of money” by Ira Glass and produced by Jacob Goldstein. According to Jacob and Milton Friedman, author of the article titled“The Island of Stone Money”, inhabitants from an island called Yap had a form of currency that could mostly be perceived as “very large, heavy in weight, stone wheels that looked like a big coin with a hole in the middle” to the island, this was referred to as “Fei”. At one point, the native Yapese people were convinced that their dependent form of income was no longer valuable. After successfully convincing the fifty-million individuals that their currency is now “worthless”, it was now seen again valuable without proper documentation to prove if it was real or not. This action alone proves how the value of currency is just an agreed upon concept that determines the usefulness of the coin or not.

 On a NPR broadcast “How Fake Money Saved Brazil ” it is stated that inflation in Brazil in 1999 was at its all time worst of 80% a month. Chana Joffe-Walt goes into detail on how this problem was solved by a plan of four individuals. The people tried everything, dealing with the inflation until it became unbearable, getting rid of older authorities in charge to fix things, but that would prove to be futile due to the lack of proper handling and care for the situations at hand. Eventually, a plan to attack the main difficulties with inflation was created and built a common ground where people would not only be living in a less stressful environment, but to also resecure trust in the currency they all know. However, the “currency” they were planning on issuing would not be considered real, it was more like standard conversion rates. Even though the money itself was not real, it was proven that the success was based on the behavioral change in the people’s understanding and acceptance of the value presented. Prices stay the same, people stay happy, but the virtual currency would not be real. 

 In some ways, the story of how fake money helped Brazil and created value in unreal currency sort of relates to the “New Currency” called bitcoin and how the value can be truly up to the beholder. This “fake currency” is “mined” and stored in a user’s virtual wallet without ever needing to be spent. Bitcoin is a way to cut out a middle man, that being large bank businesses, when trying to receive virtual money from interactions with others between networks. The use of bitcoin kind of ties into how the value of currency is determined on what is universally accepted in order to exchange goods and services. Like Yap, the value placed in a tool has to be accepted and when the value is taken out of it, things are left in chaos. Bitcoin has to be the most unreliable of all currencies, again like Yap, there can be immense value in what one uses for form of payment. However, as soon as someone comes along and decides to change the value and the power it holds, that’s when things are called into question. According to the article titled “The Bubble Bursts on E-Currency Bitcoin” by Anne Renaut, “ he price of the virtual “geek” currency had soared through the stratosphere in recent weeks, trading for a high of $266 on Wednesday — only to come hurtling back to Earth in just three days. By Friday, a single Bitcoin was worth just $54, according to the Mt. Gox platform, which manages 80 percent of the Bitcoin transactions and had to briefly shut down trading Thursday”. This further proves a point that currency will always depend on the worth to others, day after day. This is also why it makes universal understanding of what’s accepted as payment so important in exchange. 

 The people of Yap manifested a somewhat concrete understanding that the large, stone, rollable, tools of exchange were their own means of how “wealthy” one was, without having to audibly state what belonged to who, you just knew. If our modern way of using money and its purpose of exchange and receive was put into a comparison of how Yapese natives determined use and value of their currency, it would not be so far off. If everyone involved in the determination of value regarding currency, I feel like there would not be strong barriers on how we use, trade, and share knowledge on how to properly use it. I would be inclined to believe that at first glance, our currency would visibly seem “less valuable” up against the Yap because it’s paper against a large amount of stone. However in terms of value, there would not be a doubt in one’s mind that paper was not enough to have purchase power. 

                References

Friedman, Milton. “The Island of Stone Money.” WordPress.com, February 1999, https://counterintuitive.blog/wp-content/uploads/2015/01/stonemoneyessay.pdf. Accessed 4 February 2024.

Glass, Ira. “The Invention of Money.” This American Life, 7 January 2011, https://www.thisamericanlife.org/423/the-invention-of-money. Accessed 4 February 2024.

Joffe-Walt, Chana. ““How Fake Money Saved Brazil.” NPR.” 4 october 2010.

WBEZ. “423: The Invention of Money.” This American Life, https://www.thisamericanlife.org/423/transcript. Accessed 4 February 2024.

Yahoo! (n.d.). The bubble bursts on e-currency bitcoin. Yahoo! News. https://sg.news.yahoo.com/bubble-bursts-e-currency-bitcoin-064913387–finance.html?guccounter=1