The idea of a currency is extremely complicated, and this could be attributed to the fact that money, the basic building block of a currency, is also an extremely complicated subject. Up to this point, and mostly due to my lack of interest to study more into the subject, I believed in the gold standard. The gold standard was the system in which the US backed all of its money by gold. This meant that in theory a dollar bill could be exchanged for its worth in gold. To my amazement I learned through the NPR broadcast about money that the gold standard was abolished in the 1930s and that our economy, and most economies, are simply not backed by anything other then the fact that it is agreed that they have a value. Also mentioned in the aforementioned broadcast was a group of people that had an economy system based off of smoothed disks on sandstone. This actually makes more sense then the US economy as it is very concrete; you see the stones, you know who the stones belong to, you know how they can be exchanged. However this system parallels the US system when told the story of a large stone that, on its way to this island, had to be dropped at sea (Friedman). Those that had went to retrieve the stone described the stone in such detail that their fellow island-dwellers all agreed that the stone would be put into circulation (Friedman). An object that could not be seen could be traded around for goods and services. This sounds very much like the banking system of the US; we cannot see the money, we see the numbers and with that we purchase goods and services. In a way the ocean was almost like a bank for the people of the island.
The bitcoin is a newer attempt at a new economy with the main draw being that it is entirely through the internet. New of course being relative. This kind of currency makes sense to me as it is traded over the internet and can be exchanged for a price of your regional equivalence. A lot of people are against this new(er) “cryptocurrency” (Reeves). One reason being that it fluctuates in price (Reeves). These fluctuations can be small to massive (13 dollars to 1,150) and have no rhyme or reason (Reeves). This currency system, however, does fit the common mold of currencies previously discussed. Additionally, that is a lot of criticism for a relatively new system of currency. As the bitcoin stabilizes, many are hopeful that the bitcoin might actually be a viable currency for more then online purchases. It is usable now, however it is extremely niche and not many know how to use them (Phillips). As the technological age is upon use, it is not a total shot in the dark in saying that making the bitcoin more accessible to everyone, and therefore more stable, could happen.
Economies are crazy. Attempting to change to a cryptocurrency, however is also crazy. However in a world where money is simple numbers, it is a rather feasible venture. My thinking about money has gone from a dated view of the “gold standard”, to a much greater understanding about how money works, and how the internet can help us create a streamline international economy.
Friedman, Milton. “The Island of Stone Money.” (1991): n. pag. The Hoover Institution, Stanford University, Feb. 1991. Web. 7 Sept. 2015.
“The Invention of Money.” This American Life. NPR.org, 7 Jan. 2011. Web. 07 Sept. 2015.
Phillips, John. “Bitcoin: What to Expect in 2015.” CNBC. N.p., 15 Dec. 2014. Web. 07 Sept. 2015.
“Bitcoin Has No Place in Your – or Any – Portfolio.” MarketWatch. N.p., 31 Jan. 2015. Web. 07 Sept. 2015.