Stone Money- Username

Posted on February 4, 2024 by username1132005

Needs a Title

What is money? Is money real? The topic of money has been talked about for centuries, and these questions are constantly thought about amongst most. Money is an extremely sensitive topic, which many are eager to talk about. Money can cause mass amounts of friction causing divides between friends, family members, and our peers. Everyone has a different viewpoint on money, with some handling the topic better than others. The way money has evolved is truly unimaginable, thanks to the rise of technology. Money has gone from stones, to now online money like Bitcoin. In different eras of time in the world, money has been valued differently. Now with inflation being a huge topic, money is extremely sacred and important to have for everyday necessities and emergencies. In previous times in the world instead of people using credit cards and cash, people would have to use coins and stones as their source of payments, which was extremely hard to acquire. Money now is easier to access compared to what the islanders of Yap had to go through to make their payments for their necessities. If people struggle with money today, imagine being in Yap having to use a stone such as fei as your source of money. Through the research of hearing about how money was in Yap, my eyes have been opened to the evolution of money and whether or not it is truly real or not.

The islanders of Yap have given me a new perspective on money, and how it has evolved over time. The article titled, The Island Of Stone Money, by Friedman stated how the islanders of Yap’s money source was a stone called fei which was, “…sufficiently large and strong…” being up to twelve feet tall and durable enough to withstand any type of transportation it might endure. Fei was the signifier if you were wealthy or not. Essentially the more you have the more wealthy you look. In the stone money era people’s wealth levels were on display due to people being able to see the fei outside of peoples homes. Peoples fei could also be traded but the new owner of it may not be marked as the owner. Since fei is made out of limestone it is able to get marked with black paint, and is seen as more of an object than money. This could be up for interpretation but it seems again like money was not real as in fei. A stone being traded, marked, unauthorized or claimed, does not seem legit or like something that has a value to it. Money now is extremely valued and people want you to know a lot of time if they have money, want to display it. During the stone money era, there were no credit cards or bank accounts. Nothing was online, so it seemed to be difficult to keep track of your finances and control of who you were giving your fei to, and receiving it. Overall, the people of Yap gave a new viewpoint on money types and how it has evolved over time. It is completely different now and it is shocking how the meaning of money also seems to be entirely different. 

Inflation is something that has been a part of finances from the stone money age, to now mostly due to Covid 19. The podcast The Invention of Money discussed in the segment The Lie That Saved Brazil, Brazil’s issues with inflation. Brazil was going through a financial crisis and the economy ended up crashing. The people of Brazil had to figure out a new plan to get their economy right again. The rising prices of basic goods in Brazil at the time were astronomical. The rising prices made many Brazilians struggle so they needed to come up with a plan. The plan that was created was essentially creating fake money. By creating this fake money plan, many Brazilans would be fooled into thinking the economy was at a better place than it actually was. This plan that was created ties back to the overall claim of is money real. Creating fake money is a topic that does not seem ethical, but apparently at the time it was the best thing to do for its citizens. The government had a lot to do with this plan and with inflation. The government gets blamed constantly for money and inflation. It always seems to fall back on the government’s fault and oftentimes when people are struggling with money, they can never take ownership for their own funds. But, back in the stone money era, inflation was new and people did not know how to combat it. Everyone knew that the prices were raised on goods, and that it was getting out of control. That’s when the plan really came into play and the government had persuaded the hundreds of thousands of people that their money was there and the economy was better. These people were falling for the trick of believing that their money was real and valid again, which then turned Brazil into one of the most important economic countries in the world. But all of the fake money and lies about funds, makes me question again about the true value of money. It does not seem to be well valued, let alone a real thing. 

Fake money and Bitcoin can go hand in hand. According to the article, The brutal truth about Bitcoin, by Prasad stated how Bitcoin is, “…transactions using only digital identities, granting users some degree of anonymity.” An anonymous financial site with only having finances online may not sound like the most legit thing in the world in regards to money. Some can view Bitcoin as a scam because of the anonymous aspect, since crime rates and stealing money would most likely be high and unidentified. The money being doubled online from Bitcoin seems as if the money is coming out of thin air. With Bitcoin you see the money online but if it is not in your hand, which can be hard to grasp for some. With all of those negative points being made about Bitcoin, is why there has been a decrease in the usage of Bitcoin. The article titled, Why Is Bitcoin Down Today, by Adams states how, “Cryptocurrencies themselves trade 24/7 because, unlike stocks and commodities, the crypto market isn’t a regulated exchange. It occurs across a decentralized network of computers.” People can be skeptical about Bitcoin because everything is computer generated, and one may ask how truthful and accurate this source is in regards to making money? Since everything is computer based, what is really real about using Bitcoin? It may not even be a safe way of handling money because of all of the secrets being attached to this app. If the people of Yap heard about this aspect of money, they would be baffled. Money has taken a huge shift clearly from then to now with technology being the main source of money. They would most likely feel like money now is not real considering their money was more than physical. 

Overall, through the research being done about Yap and the usage of fei and trading and marking stones, I have had a new appreciation for the evolution of money. This opened my eyes to think about what the real value of money is. It made me realize that maybe money is not what I think it is, and how money can come in all shapes and sizes. With the new found technologies there are plenty of ways to get money and transfer money, but always with the risk of these computer systems messing up. Technology is never going to be perfect, but if there was one piece of technology that you would not want to be messed with, it would be with your money.  

References

Adams, M. (2024, January 24). Why is bitcoin down today?. Forbes. https://www.forbes.com/advisor/investing/cryptocurrency/why-is-bitcoins-price-falling/ 

Eswar Prasad, D. D., Prasad, E., Sarah Allen, J. G., & Eswar Prasad, V. S. (2022, March 9). The brutal truth about bitcoin. Brookings. https://www.brookings.edu/articles/the-brutal-truth-about-bitcoin/ 

Friedman, M. (1991). The island of Stone Money. Stanford University. The invention of money. This American Life. (2018, February 19). https://www.thisamericanlife.org/423/the-invention-of-money

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Stone Money – Ilovemydog

Posted on February 4, 2024 by ilovemydog

The Concept and Belief of Money

Within the past two days, my concept of money has most definitely changed. While I previously did have a basic understanding of money that others have, it never actually occurred to me that I don’t have that physical form of money and that it is all just numbers. This is only because the concept of it is so simple, that I never actually sat down to think about it. The numbers that show up in my bank account are genuinely just numbers that are given to me. I don’t have this cash on me to prove how much money I have. 

While money may not have been around forever, the concept of it has. Money is just a concept that has been built over time. In Milton Friedman’s, “The Island of Stone Money,” it is said that the first well-known concept of money was first seen, from 1899 to 1919 with the people on the island of Yap. The people from this island used large stones, called fei, to symbolize their wealth. That within itself is interesting, but the most interesting part about the fei is that nobody had to have possession of this stone for it to be worth something. While that may have been an option, nobody had to lug the stone around. If someone were to pay another inhabitant of the island and agree about who the stone belonged to, everyone who lived there would know that it belonged to the other person. 

Now, the question is, what does this mean? How can someone have money that belongs to them when they don’t have the physical form? Asking this question causes the realization that this is exactly how money works. This is the realization that I had when this discussion first arose. It is a concept that society has decided to collectively put their belief and values in. A big example of this comes from the people of Brazil. At one point and time, Brazil had some of the worst inflation in history. The inflation rates increased prices in Brazil by about 80% each month. In the broadcast, “How Fake Money Saved Brazil,” Edmar Basha, speaks about how he and three other economists hired by the government, made the people of Brazil believe that their money had value. 

This also raises the fear of how not having a physical form of money could quite possibly end badly for the people and the government as well. A prime example of this is The Great Depression. The article, “The Great Recession, Government Performance, and Citizen Trust,” by Yunsoo Lee, talks about the faults of the US government, and how this caused citizens to lose their trust in them. Lee says how the government was unable to handle the crisis at hand and failed to regulate financial institutions, which makes it their fault. This caused citizens to lose their trust in banks and the government because all of the money that was put into the bank just disappeared. From then on, people couldn’t trust banks, until Roosevelt gave his speech to ensure that financial institutions around the country were stable. 

This Great Depression and Brazil are two great examples of how society as a collective is why we value money. If we believe and entrust a certain system then of course it will be valuable. Sort of like Pokemon cards. We are told that certain cards are rare, so therefore those cards have more value, and we stick to that mindset. We stick to that mindset because we want to. It is the same with money. The value is given to it and then we oblige. 

Another example of this is Bitcoin. Although it started off rising to insane heights, it ended up falling off one day to only be worth about 54 dollars. “The 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.” Bitcoin doesn’t even have a physical form, the only presence it has is on a screen. In everyone’s minds, or whoever chooses to believe, Bitcoin is worth a lot. Without a doubt, cryptocurrency has changed the global monetary landscape and system. These digital currencies aren’t controlled by any sort of central authority. These types of currencies can help financial transactions with increased security. This is because cryptocurrency uses different digital techniques to securely verify transactions. 

Along with cryptocurrencies come in-game currencies. In-game currencies are more abstract solely because they only exist within that game. In this case, we can call in-game currencies digital tokens, because necessarily that is what they are. These tokens can be compared to tokens at an arcade. Although arcade tokens have a physical presence they are the same. If you try and pay for something in a store with an arcade token it won’t be accepted because it doesn’t have any value there, but if you use it to play a game at an arcade it will be accepted. It all depends on the belief that people have for it. This goes for digital tokens as well. If you use it in the game, it is accepted, but if you try and use it to buy something off another website, it wouldn’t be considered a valid way to pay. 

Going along with the theme of money can be present without a physical presence. The US Federal Reserve Bank can create money and get rid of money. While they may not create money they can crunch the numbers and add a certain amount of money to whatever account they may like. However, they do this in some regard to not just make money appear out of thin air, but to purchase from banks. Doing this gets the money that the Federal Reserve Bank needs. 

This whole topic has shocked me and left me in awe. I never thought about how deep this could all be. I knew that everything had value, but it had never occurred to me that things only have value because it is instated by people around the world. Money is all a concept that has been brought to reality because people have faith in believing that it is worth something. Just like how the Yapese believed that the stones they used for currency were worth something. It is crazy to think that something that is so valued as a society, is solely valued because of the belief we hold for it as a whole.

 

References

Friedman, Milton. “The Island of Stone Money.” The Island of Stone Money (1991): 3-7. Web. 10 Sept. 2016

Joffe-Walt, C. (2010, October 4). How fake money saved Brazil. NPR. https://www.npr.org/sections/money/2010/10/04/130329523/how-fake-money-saved-brazil&nbsp

Glass, Ira, Chana Joffe-Walt, Alex Blumberg, and Dave Kestenbaum. “423: The Invention of Money.” This American Life. Prod. Planet Money. 7 Jan. 2011. This American Life. Web. 11 Sept. 2016.

Renaut, Anne. “The Bubble Bursts on E-Currency Bitcoin.” Yahoo! News, Yahoo!, 13 Apr. 2013, sg.news.yahoo.com/bubble-bursts-e-currency-bitcoin-064913387–finance.html. 

Lee, Yunsoo. “The Great Recession, Government Performance, and Citizen Trust.” Journal of International and Area Studies, vol. 25, no. 1, 2018, pp. 57–70, https://doi.org/10.23071/jias.2018.25.1.57.

Posted in ILoveMyDog, Stone Money | 1 Comment

My Hypothesis _ Gamer 2.0

Posted on February 4, 2024 by The Gamer 2.0
  1. New balance shoes are the best shoes on the market
  2. New balance shoes fit every ones comfort
  3. New balance shoes are very fashionable
  4. New balance shoes are a worldwide popular shoe
  5. New balance shoes have a different variety or themes
  6. New balance shoes should be the number one brand

Posted in My Hypothesis, TheGamer2.0 | 2 Comments

Stone Money – Gamer 2.0

Posted on February 4, 2024 by The Gamer 2.0

Lessons from Yap

An island in which currency was in the form of Rai stones also known as “Stone Money” had become of great significance for this economy. It started from 1899 to 1919 in the Caroline Islands where there was a German colony in Micronesia called the “Island of Yap”. In this civilization of five to six thousand, they had a medium of exchange they called “Fei” which were stones that were made from limestones found on an island some 400 miles distant and transported in canoes and rafts.

The German Government assumed ownership of the Caroline Islands in 1898, which led to many events. The roads and pathways were all in bad condition and needed to be fixed, the people were not involved or willing to fix the roads and with that, the government had to take action. It was decided to impose a fine for disobedience on the chiefs of the districts by simply marking a certain number of the most valuable ‘ ‘Fei” with a cross in black paint to show that the government was in control. This action sparked the turn which worked perfectly for the government and made the people begin to work on repairs and the government sent agents to erase the marks on the crosses.

The Bank of France feared that the U.S. would not stick to the gold standard at the traditional price of $20.67 so they had come up with a plan that would hit the U.S. in a way they didn’t expect. France had told the Federal Bank of New York that they should separate their gold from the U.S., they did by labeling and marking it indicating it was property of the French. This led to a headline in the newspaper that “the loss of gold” threatened the American Financial system and surprisingly the value of the gold had gone down and the French’s skyrocketed. All of this led to the banking panic of 1933, also known as the Era of the Great Depression; this was very similar to the situation within the German government. Both parties were very smart in their decisions, leading them to great success in getting the East they wanted. 

The similarities and differences between “Bitcoin’ and “in-game currencies” are simple because they are the same but slightly different. Even though they are both categorized as digital or virtual currencies designed for the virtual world they both serve a purpose. Bitcoin is used for many things for example an alternative investment, to make purchases from merchants or retailers, peer-to-peer transactions, etc. And it’s also determined by market demand and supply. In-game currencies are also digital or virtual currencies designed for the virtual world specifically designed for the virtual world and particular video games. Its value is based on and limited to the virtual environment. They are mainly based on game transactions such as buying and purchasing items, upgrades, or features in the game, not the real world. In the end, in both scenarios, if there were to be a crash in the Bitcoin industry and you had money in the system you have the possibility of losing everything. So as in “in-game currencies” if the game were to be deleted or go offline you also have the possibility of losing everything you have paid for.

The Brazilians have suffered from inflation for many periods which has led to an increase in the prices of everything around them. They had people that adjusted the prices and because there was so much inflation people would run and try to get in front of the person that changed the prices. They had to come up with something that would help so they came up with different solutions like higher pay but that would end up making things worse because as prices rose the value of the money would lessen. Cruzeiro was the official currency of Brazil but it was replaced with Brazilian real which is now the new currency after the many different periods of inflation. The Brazilian real was a way for the economy to stabilize and attack the inflation that was rising and it worked and it marked a turning point for the Brazilians and its economy. The Brazilians had trusted this plan in hoping that it would give them a change stabilize the economy and fix the hyperinflation.

The U.S. currencies differ tremendously from the Yaps’ because the U.S. is one the world’s largest and most developed economies with a diverse range of industries and the Yap has a lesser economy with limited resources and remote location. Our concept of money differs hugely because the Yaps have it as coins and we as paper so it all could have different meanings and so on but if you were to compare their values the U.S. would be leading because the demand for money is so high due to the number of people that live here. The Yap’s money is more abstract than ours due to the way it is made and valued they would deem it more valuable because of how it is portrayed but a benefit of U.S. currency is that if we were to mark an X on the paper it value is still there but for the Yap, the value of that would vanish until erased.

The question of should we be worried about serving the connection between money and nations? It’s a simple answer to me I do think that they should be worried because if a nation’s currency were to somehow deplete it would lose all its allies and resources because they would have a way of purchasing more and slowing but surely would lead to economic depression. And following would be another nation taking control over that nation.

References

Friedman, Milton. “The Island of Stone Money.” The Island of Stone Money(1991): 3-7. Web. 10 Sept. 2016

Glass, Ira, Chana Joffe-Walt, Alex Blumberg, and Dave Kestenbaum. “423: The Invention of Money.” This American Life. Prod. Planet Money. 7 Jan. 2011. This American Life. Web. 11 Sept. 2016.

Joffe-Walt, Chana. “How Fake Money Saved Brazil.” NPR. NPR, 4 Oct. 2010. Web. 13 Sept. 2016.

Renaut, Anne, “The bubble bursts on e-currency Bitcoin” AFP News, 13 April 2013

Posted in Stone Money, TheGamer2.0 | 2 Comments

Stone Money – BreakingBad

Posted on February 4, 2024 by BreakingBad45

                               Money is not Authentic

In society today, everyone is faced with issues dealing with money in one way or another. Our world is dependent on how much money you have or make in order to live not just a normal life, but a stable life. But to make that climb to make that money can be hard and almost seems like you can’t escape the constant price tag of everything we need to buy. People nowadays think that value and the amount of money they have represents who they are as a person and to the world. But I think it should be very much known that money is not as authentic as it portrays itself in today’s world and how it originated in the world. 

With one of the examples for my argument,  I have a tiny island called Yap which is located in the Pacific Ocean that gives you a great understanding on the value of money and the history of currency. This small island, Yap is believed to be one of the oldest known origins of currency with settlers there buying and trading with the first evidence of money. The way they sold and traded goods was by a big piece of stone or stone money they would call it. This was not for normal day use however, it is shown it would be for expensive things such as a home or a celebration of sorts. The takeaway from the article that is very meaningful was that the value of this stone did not need to be given but it could be sold without it physically there. This resulted in the idea that if people believed it to have value then that was the end result that the stone with or without physical evidence could have a high worth. When you think of how people make money today you tend to think it can’t be fake but you would be wrong as well.

An instance I have of the effects of money is again by NPR talking about “How fake money saved Brazil”. This story goes on to talk about an economist tricking an entire nation into getting out of serious inflation. In Brazil about 20 years ago the inflation in the country was so bad that things in the nation would double in price by the day. It was so bad in fact that if eggs cost 1$ one day, the following month the price of those eggs would go up to 2$. This would result in people becoming poor in this environment struggling even to just eat a meal. Four college kids in Rio thought of a plan to prevent this constant cycle of financial crisis. They thought they should trick people into seeing the value in their money, so they decided to make their own currency for people. The only catch however was that the money is not real at all, in fact fake. They called the URV and said that it was virtual and not real. They changed the national currency to use a URV instead of the cruzeiros which made the value of 1 URV to be higher than the older national dollar. After realizing the URV’s were stable they became national to the country and then changed to “The Real”. With the assistance of the fake currency it was able to get 20 million Brazilian’s out of poverty saving the country from a potentially fatal demise.

Another example that factually represents this argument is the NPR article examining and talking about “The bubble bursts on e-currency Bitcoin”, which is breaking down the first crash of the crypto currency companies as well as mentioning the early rises to this way of future payments. Bitcoin is struggling with their greatest decline in revenue since they began their company in the year 2009 during the beginning of the Global Financial Crisis. The creator and founder of the brand Gavin Andresen , says that he was expecting as they were facing major highs they would gain some “chaos and drama” until the company gains stabilization again. Economics professor Steve Hanke gives a very different approach to the manner saying that the future for bitcoin is uncertain. He mentions the risk of carrying your investments when you have to deal with payments on house or food on the table in your home. They then start to talk about what bitcoin is and how people invested in it carry it on the. They carry it virtually through hard drives as well as in their virtual wallet. The risk that is as well a car ride is the idea of a Ponzi Scheme which is the idea of a pyramid like scheme where people keep recruiting other people so they can make money in return for the people they recruit. It’s a very shady and unpredictable business with many people concerned and wondering what the next steps are for the companies in crypto. Crypto is a high risk and shows that money has a hard time to be proven real because of the way people handle and treat it.

To summarize everything that has been stated already, money should not be taken seriously as some people seem to take it and money itself is not authentic, for example in Yap they used stones as money and trusted others wealth into purchasing and trading goods. In the crypto world some people take it very seriously as others seem it is another way investors can quickly burn their money. However others remain vigilant and optimistic about the future of crypto. The final example as well is the NPR’s on how Brazil escaped the country out of poverty. The idea of how people were able to make a fake currency in order to get out of their situation shows the power of money and how important it is to a person’s ordinary life. With these in mind money would never be authentic when there are too many ways to look at wealth and too many examples of it.

References

Joffe-Walt, C. (2010, October 4). How fake money saved Brazil. NPR. https://www.npr.org/sections/money/2010/10/04/130329523/how-fake-money-saved-brazil 

Goldstein, J., & Kestenbaum, D. (2010, December 10). The island of Stone Money. NPR. https://www.npr.org/sections/money/2011/02/15/131934618/the-island-of-stone-money 

Renaut, A. (2013, April 13). The bubble bursts on e-currency bitcoin. Phys.org. https://phys.org/news/2013-04-e-currency-bitcoin.html Chynoweth, V. (2024, February 1). Future of Energy: How Solar Power is fueling the cryptocurrency boom. Forbes. https://www.forbes.com/sites/digital-assets/2024/02/01/future-of-energy-how-solar-power-is-fueling-the-cryptocurrency-boom/?sh=5f2a05f962de

Posted in BreakingBad, Stone Money | 1 Comment

Stone Money- Thatpersonoverthere

Posted on February 4, 2024 by thatpersonoverthere

The truth about money

As of right now this very essay is written while I walk around my dorm’s small kitchen table, the distance I walk is tracked by a pedometer watch so that I feel that I’ve been productive for the day. It’s the very height of productivity  perpetuated through money. Without money I wouldn’t have this constant need to be productive, I wouldn’t feel guilty for not doing anything for the day. I wouldn’t have this pedometer watch that subconsciously encourages me to walk great distances.For not earning money. I’d just live. There is also the added question of whether or not my walking around my kitchen table while reading these articles and writing this essay influenced my perspective in any way. 

It’s scary to know that your life is in the hands of people who have no idea you exist. Money relies on trust as evidenced by the people of Yap and is reinforced with the people of Brazil. The rich people from Yap’s money is derived from large stones mined from another country. This stone was so large that it couldn’t be moved without significant physical force. Though as the paper by Milton Freedman suggests, how is that any different from our current monetary system? It’s not. Money is an idea and the only reason that it has any value is because it’s an idea everyone believes in.

Before my introduction to the island of Yap and the deeper conversation surrounding money, I never truly stopped to realize just how silly money as a concept is. This was further evidenced by the near economic catastrophe in Brazil stopped through the use of a completely new monetary system. Their country was effectively saved by their citizens trusting the words of a few economists. 

The idea that a single system can be used to give meaning to certain aspects of the greater human experience such as spoken word concerts or even things that sustain the soul like a iced coffee from a small local shop is frankly strange. If the adage from the song “Six n the Mornin” by Ice T is true, “ life has no meaning and money is king,”then truly what is money?

Money is the best example of humanity that can be expressed. Money at its core is a collective belief in something, in a system designed to attribute meaning to human creations. An idea to attribute meaning to other ideas.It’s the ultimate way to give our lives meaning, to work towards a dream. Or more accurately a mass delusion that makes the world go around. Mass amounts of money cause the brain to release chemicals that cause emotions such as happiness. It’s a way to cause an addiction to the human experience. A way to stop people from realizing how mortal they truly are, after all a person can’t think about their heartbeat if they can’t hear it due to the headphones in their ears purchased with Apple Pay. Whether or not this is a good thing remains to be seen, it’s up to the individual to decide how much they need to rely on an idea that forces its way into our reality. Of course everyone needs to make a living wage but beyond that and that’s where money can become dubious. 

This perspective formed by walking around my kitchen table listening to those three podcasts and short article. And thinking further about the implication of the notion that money is just an idea. If an idea then what is its basis, what proves it’s true. And in this case we make it true. People make it true. Because we trusted that it was true.

Money even exists in our fantasies. As evident by digital currency in video games. The predatory nature of video game currency which at its base elements is a system designed to make a person play their game for longer by establishing systems built to make life idealized. Depending on the systems proposed by a Unity article written by Fernanda Gonzalez either “soft money” or “hard money” where soft money relies on a persons need to come back to a game in order to get a specific reward, for example in animal crossing every Sunday there is a special character that comes to your village to sell Turnips. These turnips can be sold anytime throughout the week and the selling price of these turnips often varies. Thus if done correctly you could earn far more than you originally had without spending any real life money. It incentivises the player to come back every Sunday and to check back every day of the week to see if the prices changed at all. While hard money actually does require the player to spend money. This might resemble gambling where the first few tries of a slot machine are free though the next few asks for some real world currency. And if I think about it gambling is a lot like investing in digital currencies. 

The rise of digital currencies such as bitcoin caused a sort of new form of money. Though this new system isn’t too different from systems invented by the people of Yap and Brazil though this system lack the initial foundation of trust as the other systems previously established. A quote from the article “The bubble bursts on e-currency Bitcoin” Anne Renault states that bitcoin is rocky due to not being fully backed by another currency. This then causes the value of bitcoin to wildly fluctuate. This coupled with the fact that one can acquire bitcoin without really spending any physical money gives rise to the comparison of soft money in video games. Which is frankly a bit concerning given the goal of in game currency is to enhance game engagement. But investing one’s life savings into bitcoin has a far greater downside. 

This week I learned that life may be one big game with the accidental conclusion reached from the three paragraphs above this one. But jokes aside these articles have allowed me to critically analyze the source of money and to attempt to break it down into a fist draft. 

References 

“The Bubble Bursts on E-Currency Bitcoin.” Yahoo! News, Yahoo!, sg.news.yahoo.com/bubble-bursts-e-currency-bitcoin-064913387–finance.html. Accessed 4 Feb. 2024. 

Friedman, Milton. The Island of Sone Money, Feb. 1991, counterintuitive2015.files.wordpress.com/2015/01/stonemoneyessay.pdf. 

“The Invention of Money.” This American Life, 19 Feb. 2018, http://www.thisamericanlife.org/423/the-invention-of-money. 

Technologies, Unity. “Building an In-Game Economy: Unity Gaming Services.” Unity, unity.com/how-to/building-in-game-economy-guide-part-2. Accessed 4 Feb. 2024.

Posted in Stone Money, ThatPersonOverThere | 2 Comments

Stone Money- Eaglesfan

Posted on February 4, 2024 by Brandon Sigall

Money and its value to certain people

The intrinsic value of money is whatever the person believes. It is used to purchase those items and it shows a form of wealth in most countries. Not all people understand the value of money though. Kids and rich or wealthy people most likely don’t understand the value of having money. Kids do not know what to do with it. Rich or wealthy people just throw it away like it has no value. They buy anything they want and the price tag doesn’t matter to them. In the NPR podcast the host claimed, “Money is not solid, its value could disappear.” The money that goes into the bank that we think is solid is not. That money is non-existent now. We just think it is because it shows up in our accounts. If a person were to go to the bank and ask to see their money they will not be able to. This is because the bank does not have the person’s money. Money’s value is only as good as the person or human believes it is. If a person were to label some gold in their basement it could bring down America’s banking system and put users in a depression because gold is not labeled in the monetary system. If it was labeled there would be a bigger problem with inflation and everyone who has gold would want to sell it causing a depression

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Yap was an island in which people used stone money which was these giant limestone disks used by the people to pay for items and things they wanted. The Yap islanders did not have to move their stones. The value of the limestone again, was whatever the people of Yap believed it was. The stone money represented the idea of money. It seems as though they didn’t need to see any proof of the islanders stone, they just accepted they had a stone and the certain value of it. When Germany took many of these stones and put a X on them, the stone had no value anymore. The Yap did not think it could be used as money. Milton Friedman commented, “The apparently meaningless measure had real results.” The feature of our monetary system that they might believe is the most bizarre is how we actually exchange money. We sometimes give cash to a person to buy an item. The islanders of Yap simply say what stone is and what value it has and they do not have to bring it in person to a store and use it. We always have to make an online transaction using a card or in person transactions using cash or card. The people of the US have to bring their currency and people of Yap do not. They abstract us however by having the same belief that money or currency has a value. The value may differ in both areas but there is still a belief.

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The French also had a problem with money. They were scared about the US conversion of dollars to gold so they converted all their money to gold and put it in the bank. The US would shortly run out of gold and France had a boom. They had lots of gold while the US had almost none and this helped their country out.

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Brazilians stopped believing in the value of their money. They believed their money no longer had any value. The Brazilians no longer believed so the money no longer had any value. In the NPR Broadcast the host claimed, “Everyone stopped believing in their currency.” They stopped believing because of inflation. Brazil was facing inflation percentages up to eighty percent. Things were getting very expensive very quickly. The government wanted to start a new project but didn’t have the money so they printed money which caused the inflation. Brazil’s money began to lose value by the day. The government was able to trick millions of people that their currency had value again. They tricked the Brazilians by getting help from four buddies that went to grad school. They were in charge of the country’s economic situation. The Brazilians trusted the new currency because the four friends had a plan. They said to not create money as quickly. They had to trick the people into a new currency. They made a new currency that was fake and it was called a virtual currency. Everything was listed in URVs. When people were paid it was in URVs but the currency did not exist, they were not actually getting paid. The idea was to make people think in URVs. Inflation went down to as low as forty percent. The URVs made people think the prices they were paying were fair. This is what made the people in Brazil believe in their idea. The recent Fiscal Cliff debate is similar to these problems in Brazil. There is an imbalance in the federal budget and it has to be corrected or our money may not be reliable.

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Crypto currency has risen and completely changed the monetary landscape. With a rise however, it has also seen a fall. Anne Renaut comments, “The 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.” It changes the landscape by making a new currency.. A bitcoin is only as valuable as the people who use it believe and that value is more than a dollar. This makes it harder for people to get them and harder for people to sell them. Bitcoin and In-game currency is not as abstract as money or dollars. In-game currency is simply money in a game to get products or items in the game. Most people believe it as that and most likely do not try to use it in real life situations due to that belief. Unity states, “Houses would be the resource that indicated player progression, and coins would be the currency that makes all the transactions in the game possible.” We should be worried about severing the connection between money and nations. The US is not at a good spot with money and inflation is on the rise. These other nations’ strategies or ideas could be helpful in bringing the US back into a good economy. The other nations might be able to help in providing resources so it could be harmful to sever connections.

References

Friedman, M. (1991). The island of Stone Money. Stanford University.

Technologies, U. (n.d.). Building an in-game economy: Unity Gaming Services. https://unity.com/how-to/building-in-game-economy-guide-part-2

The invention of money. This American Life. (2018, February 19). https://www.thisamericanlife.org/423/the-invention-of-money

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

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Stone Money- Dog lover

Posted on February 3, 2024 by doglover7025

The Concept of Money

A time that shows that money was just a concept is Yap. In 1899-1919 there was a little colony in Micronesia called the “Island of Yap”. The colony had a unique form of currency called “Fei”. Milton Freidman in “The island of Stone Money” describes Fei as large, thick, stone wheels ranging from a diameter of a foot to twelve feet. The fei was a type of currency.

After reading “The Island of Stone Money ” and having discussed the topic, my thinking about money hasn’t changed since the last discussion. Money is “any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context”. It isn’t something that is physical. If I have a million dollars to my name, I don’t physically have that million dollars on me. It’s in the bank. We put our trust in that the bank is safely securing it. 

When you compare “in-game currencies” with Bitcoin, one isn’t more abstract than the other because they are almost identical. Bitcoin, “A form of “e-money,” Bitcoin is made of strings of dazzlingly complex code created by raw computing power — a process called “mining” that can in theory be carried out by anyone with a computer.” Both Bitcoin, and in game currency  run without a financial system or government authorities. In the gaming world, objects in the world can be traded using in-game currency. It’s almost similar to bitcoin, buying objects with bitcoin, and receiving it. Also, in a way they are the same because if you lose bitcoin or corrupt the file, you can’t get it back. If you delete the app where the “in-game currency is held, you also lose that currency. So at the end of the day, they are similar. 

The world that we live in is a very digital based world. Everything is online, even money. Crypto currency has changed the world and continues to show its negative and positive effects. By using Crypto, it’s easier to transfer money without the involvement of banks. A fear that many people have is losing their money or getting hacked. With Crypto, your money is safely secured. According to Forbes, “No one can access your funds unless they gain access to your crypto wallet’s private key. In case you forget or lose your key then you cannot recover your funds” .The sense of security is definitely a benefit of using cryptocurrency, “nearly 48% of adults are concerned about the money that they have in backs and other financial institutions”.(CNN). Some people see crypto as the future of money, but others are cautious. 

Our money has proven to be a reliable vehicle of wealth over time. Obviously, anything that creates uncertainty in the world can create doubts, and with the recent “fiscal cliff” debate, people are worried. They worry about the impact the economy will have. For example, inflation or a decline. But we shouldn’t be too worried because we have trust. We have trusted for a long time that U.S currency is reliable.  The U.S dollar has been shown to be a reliable vehicle of wealth over time. 

The people in Brazil trusted the new currency because of the stability. In the NPR broadcast “How Fake Money Saved Brazil,” Channa Jofee Walt said “ because Brazil had incredibly high inflation. In 1990, inflation in Brazil was 80% a month. Not a year, a month.” Their inflation rates were skyrocketing. Brazil ended up still using their type of currency (cruzeiros), but when they got paid it would be listed in URV’s. They made tables with the equivalence of a cruzeiro to a URV. Once they started using this method, everything was starting to improve. Channa Joffee Walt said ,“Everyone in Brazil, collectively, as a country, tricked themselves into believing that this fake currency was real. More real than the actual physical bill they were holding in their hands. And that made all the difference. That made it real. For money, it’s crazy but that’s all you need.”. It was the money that they needed. They went from being a “economic basket- case”, to being the most important economy out there. It stabilized Brazil. 

Other countries like Japan, have a low inflation rate, different from Brazil’s. Their government has been experimenting with different measures to stimulate inflation growth. Japan has been making smaller banks have lesser flexibility. “the difference between the interest rate earned on lending versus that paid on deposits — than the megabanks. They focus on domestic customers, where an aging population that is also shrinking puts limits on consumer demand and spending.”. They’re also making regional lenders favor long term bonds to improve their margins. “The average maturity of bonds in their portfolio rose to 7.3 years by March 2023, from 4.6 years in March 2017. The average maturity of bonds held by major banks stayed around 3.2 years during the same period, the data shows.”

Last point, Our monetary system is quite different from the Yap. Our electronic currencies and physical currency could confuse them considering they’re not used to it. We use a monetary system that is based on “Fiat Currency ”, which means that the currency isn’t connected to anything physical.  They are used for physical pieces of rock that are higher in “price” depending on the size. Whereas we use a piece of paper called cash, and those have different prices on it. We also put money onto a debit or credit card. Everyone puts their trust and faith into this currency whereas Yap’s was different. In Yap, when a transaction would happen, the one person would verbally send the money off. In a way, the types of currency are the same. I don’t think Yap’s way of currency would be feasible in our world currently  because of the lack of trust and the amount of people in the U.S.A. 

References

Friedman, Milton. “The Island of Stone Money.” The Island of Stone Money(1991): 3-7. Web. 10 Sept. 2016.

“How Bank Failures Contributed to the Great Depression.” History.Com, A&E Television Networks, http://www.history.com/news/bank-failures-great-depression-1929-crash. Accessed 3 Feb. 2024. 

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

Renaut, Anne, “The bubble bursts on e-currency Bitcoin” AFP News, 13 April 2013

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Stone Money—Snowman

Posted on February 3, 2024 by Snowman10

Examining Belief, Value, and Perception
in the Abstract Conception of Money

Economists and academics have been debating the inherent value of money—or lack thereof—for centuries. The value of money is derived from societal consensus and trust in its purchasing power, unlike tangible assets like gold or land, which have inherent value due to their scarcity and utility. Understanding this distinction is essential to comprehending the evolution of currency and how contemporary monetary systems operate.

The evolution of money is intricately linked to the idea of intrinsic value. Because of their intrinsic value, agricultural products or precious metals were used as commodity money in ancient societies. But as trade increased and economies became more complex, commodity money’s drawbacks were revealed. Representative money emerged as a result of the difficulty of transferring and confirming physical assets; tokens or certificates represented claims to goods kept in storage.

The introduction of fiat money made the inherent value of money even more ethereal. Fiat currency has no inherent value and is not supported by tangible assets; instead, it is valued by government decree. Rather, the stability of the underlying economy and faith in the issuing authority underpin its value. This major change in monetary systems—from commodity-based to fiat currency—emphasized the significance of having faith and confidence in the worth of money.

The gold standard, a monetary system in which the value of a nation’s currency is directly linked to gold reserves held by the government, is referenced by the labeling of gold in a US basement vault. A number of events, such as speculative trading and excessive lending, contributed to the decline in public trust in the banking system during the Great Depression. Banks faced insolvency as people scrambled to remove their gold deposits, which added to the economic slump. This historical illustration highlights the vulnerability of monetary systems and the possible repercussions of losing faith in the worth of money.

Fiat currency may seem especially strange to the Yap, who are known for using enormous limestone discs as money. Fiat currency is not intrinsically valuable; rather, its value is determined by government decree, unlike their stone money, which has both cultural significance and tangible value. Modern monetary systems, which rely on faith and trust in centralized authorities, are in stark contrast to the Yap’s reliance on tangible objects that have intrinsic value.

The necessity to stabilize the economy and rebuild public trust in the monetary system drove Brazil to adopt a new currency. The 1994 introduction of the Brazilian real, coupled with strict fiscal policies and a currency peg to the US dollar, gave Brazilians peace of mind that their savings would not be destroyed by hyperinflation. The dedication to stability and prudent monetary policy fostered confidence in the new currency, thereby promoting economic expansion and recuperation.

Concerns regarding the US dollar’s stability as a global reserve currency and the nation’s fiscal sustainability were brought to light by the “fiscal cliff” debate in the US. There were concerns about the government’s capacity to oversee its finances and preserve economic stability due to the possibility of automatic tax increases and spending reductions. In light of the possibility of a US debt default, concerns regarding the US dollar’s long-term sustainability as a store of value and medium of exchange emerged among investors and policymakers. This illustration shows how fiscal policy, monetary policy, and public opinion are all interrelated in determining how stable a currency system is.

The emergence of decentralized digital currencies that function outside of established banking systems, like Bitcoin, has completely changed the structure of the world economy. Because of blockchain technology, cryptocurrencies provide advantages like reduced transaction costs, more privacy, and improved security. However, traditional financial institutions and regulatory bodies face difficulties due to their decentralized nature and volatility. The rise in popularity of cryptocurrencies has spurred discussions about the nature of money in the future and how digital assets might change the financial sector.

Since virtual worlds and gaming platforms use online in-game currencies, which have limited use outside of the gaming environment, they can be considered more abstract than Bitcoin. In-game currencies are mainly used as tokens for virtual goods and services, but cryptocurrencies like Bitcoin and others have become popular as substitutes for cash and investments. As in-game currencies have no intrinsic value outside of the gaming community, their value is decided by players and game developers. Because players exchange virtual goods and participate in virtual economies within gaming communities, in-game currencies have real-world economic ramifications despite their abstract nature.

To sum up, the abstract idea of money is not limited to economic study; it also includes sociology, psychology, and philosophy. We can better understand the complexities of wealth and the changing nature of currency by critically analyzing the roles that faith, value, and perception play in monetary systems. The conversation about money and its effects on society is becoming more and more important as we live in a world that is becoming more digital and connected. Our understanding of money is shaped by the interaction of faith, value, and perception, which in turn affects economic behavior and social norms. Therefore, in order to address the opportunities and challenges brought about by the abstract nature of money in the modern world, it is imperative that interdisciplinary research and informed dialogue be fostered.

References

Friedman, Milton. “The Island of Stone Money.” The Island of Stone Money (1991): 3-7. Web. 10 Sept. 2016.

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

Renaut, Anne, “The bubble bursts on e-currency Bitcoin” AFP News, 13 April 2013.

Weidenhammer, R. (1932). [Review of Exchange, Prices and Production in Hyperinflation: Germany, 1920-1923, by F. D. Graham]. The American Economic Review, 22(1), 146–149. http://www.jstor.org/stable/1807287

Posted in Snowman, Stone Money | 4 Comments

Stone Money — Holistic25

Posted on February 3, 2024 by holistic25

An Everlasting Phenomenon

Despite having some previous knowledge in regard to money and the Federal Reserve, the education on the island of Yap and its currency, Fei, has sent my conceptualization of money in a whirlwind. The basis in which people own this stone money is quite the phenomenon, a process that involves one not needing to physically possess the currency or even catch sight of it. What I considered startling was the notion that ‘money is fiction’ is something that dated back to pre-technological times in the absence of mass communication forms such as text, social media, and the internet. The islanders on Yap further induced a comical aura upon the reader when it’s realized that this stone money weighs more than a car, their currency would not even be stowed anywhere like a bank as the common American is accustomed to. Owning fei came through word of mouth, a public acknowledgment of who possessed it. The informality of stone money, how it operates and how it presents itself to the mind stupefied me. What purpose does money serve if we don’t need to physically possess it to own it? Do we really ‘own’ our earned money? These questions swirled into the front of my brain, providing mere disappointment juxtaposing the reality I previously held thinking money was an end all be all way of getting things I want in life.

The relevance of the concept of stone money to current times is strikingly parallel. Taking a look at a popular currency in this current technological age, bitcoin, it functions quite similarly to stone money. In fact, bitcoin is arguably more fictional than stone money itself because there is no physical presence surrounding bitcoin. This monetary mechanism, an e-currency, having been created in the aftermath of the 2009 financial crisis, was motivated by having a currency independent of any financial institution. Truly, money out of thin air, with no literal backing. A like minded skepticism I share from Steve Hanke of Johns Hopkins University is that “Bitcoin remains ‘a very uncertain, speculative venture,’ because it is not backed by a commodity”. Prior to learning about stone money, I thought the debate around bitcoin was preposterous, and my belief was only reaffirmed through these readings. For lack of a better thought, how can something that is literally nothing be valued in the slightest? So-called experts go on the media and debate this currency as if they know it like the back of their hand when in reality bitcoin is indubitably an illusion. Bitcoin is a prime example of the notion that ‘money is fiction.’

With my mind being warped in stone money, bitcoin, and the modern day greenback, devoid of the gold standard, Brazil’s solution to decades of inflation only distorted my reality further. None other than a lie instigated stabilization of Brazil’s economy. Many attempts to tackle Brazil’s gargantuan inflation (80% per month at one point in time) were made, including a price freeze. URV’s sprouted up in Brazilian’s daily newspaper, coined by four economists, as a conversion chart in relation to Brazilian’s actual currency, the cruzeiro. The citizens of Brazil suddenly looked no further than the stable URV values in justifying its purchases. Thus, inflation was ultimately mitigated because faith and hope was restored in the cruzeiro inadvertently. 

Although this example’s irony is comical, it drives home the point that any nation’s economy is strictly contingent on citizens’ faith and hope in their own currency. In order to give currency value, one has to be convinced (usually in the form of a lie as history has proven) that spending their hard earned money is worthwhile. Looking at my own life and my parental guidance as a child, it was interesting to note financial behaviors. My father ran a small business, where he prioritized cash payments, and rightfully so to avoid uncle sam’s hand (i.e. taxes) in his earnings. However, thinking about it now, was the ideology worthwhile? These references have made me think in a healthy way about what money is and its most effective usage. Truth be told, the smartest way to use earned money is based on the current financial climate. Is stowing away cash worthwhile in an inflated economy? Quite simply not because an individual loses its spending power on those $10 earned in due time (i.e., the more time that passes, the less value the dollar has in an inflated economy). How about in grave economic times? The answer is to hold on to your money for it is valued. Inherently, that’s why savvy stock marketers are encouraged to buy low and sell high. You will make money on your money if you hold on to your money during financially turbulent times.

Another example to the notion I just alluded to is that of Japan in 2013, its push to pump an increasing amount of money into the economy with hopes to encourage people to spend to create a more viable economy. Japan did not do this in any subtle matter, but rather they approved a whopping $116 billion-dollar economic stimulus bill. As any reliable mind would come to question, how is this spending plan suitable for the country’s overall debt “which has already mushroomed to twice the size of its economy and is the largest in the industrialized world?” according to Hiroko Tabuchi. The answer is simple: it is because ‘money is fiction.’ Nobody will live to see the day any country will pay back its debts, as most debts are insurmountable beyond belief. There’s outrage within me as to why the government presses so hard on the individual to pay its taxes, its debt when the government itself cannot fulfill what it’s asking its own citizens to do. 

Deceit, illusion, misleading, are phenomena that expel the norm not only in America, but in most developed countries in relation to money. Naturally, solutions are to be thought of. But money being not so ‘fictitious’ merely seems like a dream too far gone. It has been the case since the greenback was taken off the gold standard starting in 1933, which set the stage for unprecedented amounts of fictionality as it pertains to money. Milton Friedman referred to the banking panic of 1933 in his work alluding to “the threat to the American financial system,” by removing gold as the standard backing for the U.S. dollar, and in return “the markets regarded the U.S. dollar as weaker, the French franc as stronger”. His point was the perception of how people valued money was the cause for times of panic or encouragement. Stone money was educational for me because it didn’t promote much emotion, but rather aiding me in understanding how and why currency has become the way it has on an individual and global sense. 

References

Friedman, Milton. “The Island of Stone Money – Collected Works of Milton Friedman.” From The Collected Works of Milton Friedman, Hoover Institution, miltonfriedman.hoover.org/internal/media/dispatcher/215061/full. Accessed 3 Feb. 2024. 

Glass, Ira, et al. “The Invention of Money.” This American Life, Planet Money, 19 Feb. 2018, http://www.thisamericanlife.org/423/the-invention-of-money. 

Renaut, Anne. “The Bubble Bursts on E-Currency Bitcoin.” Yahoo! News, Yahoo!, 13 Apr. 2013, sg.news.yahoo.com/bubble-bursts-e-currency-bitcoin-064913387–finance.html. 

Tabuchi, Hiroko. “Japan Approves $116 Billion for Urgent Economic Stimulus.” The New York Times, The New York Times, 11 Jan. 2013, http://www.nytimes.com/2013/01/11/business/global/japan-approves-116-billion-in-emergency-economic-stimulus.html.

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