The Collaborative Nature Of Money
We all heard the saying that money is just a tool. When we look at it closely, this is the basic essence of why we use money.
When the idea first came into being, it was to replace the barter system. Money was a way to streamline the ability to trade products and services. Under a barter system, I would swap my eggs for your beef. This was a great way to operate until a third variable was entered. What if you needed wood and the guy who had that didn't want your beef? This mean you had to swap your beef for something he wanted and then make the transaction with him for wood.
It was a slow and inefficient process.
Money helped to reduce the friction by producing a standard that enabled all to operate. We saw prices established for certain products which could be compared to others. Hence, the beef was sold for x number of units while the wood went for y.
Over the centuries, the monetary and financial system has evolved into something much more complex. Nevertheless, when we look at money from the basic perspective, it allows people to collaborate. Essentially, it is the trading of our productivity.
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When we discuss value, the ultimate backing of any currency is the productivity of the people using the currency. While many point to the faith and credit of a particular government, this is really just a smokescreen. The economic output of a populous is what generates confidence in a currency. Even if the government is filled with a bunch of boneheads, a strong economy will override that.
Cryptocurrency brings us to an entirely new level of this evolution. Here we see no government involved. There is nothing backing the currency from an entity standpoint. This causes many to misdiagnose the potential value of cryptcurrency.
Once again, the value is generated by the productivity of the people who are utilizing said currency. It makes no difference if people are using shells, fiat, or digital currencies.
The collaborative nature of money takes on new meaning when we look at things in this era. As we exit the information age and delve deeper into one that is fully digital, we notice something extreme taking place. Limitation is virtually eliminated.
When I was citing the basic example of eggs, beef, and lumber, those are all finite commodities. While they can be replenished over time, the compounding of them is very slow. It takes a few years for a calf to become a cow. A tree can take a decade or longer to mature before it is ready to head to the sawmill. There are only so many eggs a chicken can lay.
Over the last few decades, we saw an incredible amount of growth in the area of video, communication, and information. These days, it is summed up under the term "data". Look up any study and the conclusion is always the same: the amount of data we are producing is growing at an exponential rate. Anything we do that it tied to the internet is generating data. This is true whether it is activity done by a human or a machine.
As we move into a world of near infinite dimensions, we see the potential for cryptocurrency also gain that same attribute. While many point to inflation when it comes to money "printing" by the central banks, isn't it ironic that few mention the same thing with regards to cryptocurrency? Doesn't rapid money expansion the same regardless of what form of money is utilized?
One of the biggest reasons this is the case is because those involved in cryptocurrency understand the near infinite nature of the world we are creating. Innovation is rapidly expanding around us, generating a need for more money to feed it. In other words, there is a lot more collaboration taking place today as compared to 50 years ago.
We see this process in action, to a limited degree, on Hive. The last few days I made reference to the new platform, NFTShowroom. Here we see a place where creators and buyers of digital art can come together. In many instances, they are the same; art buyers are also creating it.
If we think of this in terms of collaboration, we see the potential this holds. Each artist is able to generate a certain number of digital products. For discussion sake, let us say it is 3 units a week. Thus, when we see 30 artists, which was roughly the number at the end of the weekend, we come up with 90 pieces for sale.
Of course, this is the digital world which makes things much different. In the physical world, we would be dealing with 90 pieces. Yet, here, the number is higher. With each piece created. multiple units are available for sale while still maintaining some scarcity. Again, for discussion sake, let us presume that each piece has 5 units for sale. Suddenly, there are 450 in total.
To further this concept, we see that @aggroed tweeted out the other day that the number of registered artists grew to 50. Using the same ratios, we see 150 pieces generated each week which equates to 750 units. The extra 20 people added another 300 units to the economic output.
Here we see a use case for the Hive token that is expanding and growing. Ultimately, we can think of the money paid to the artist as the collaborative tool between the buyer and him or herself. It is no different than an artist being commissioned to produce a work for an individual buyer. In this instance, we see it operating on a larger scale.
Of course, 50 artists and 750 units is nothing to get excited about. This certainly is not going to get the attention of the United States Federal Reserve up in arms. However, it does explain the basic nature of what is happening.
Now let's expand the viewpoint to include DCity. Here is a digital trading game where people build their own cities. Once again, we can see the expansive nature of those who are participating. Over time, people spend more on the different components of the game (cards) as they look to improve their cities.
Being digital, the limitations are only dependent upon the creative ability of those behind the game's development.
It is a thought process that keeps growing as the number of applications come online. Here I referenced two, consider this concept over 22 different platforms. Or, if we want to keep expanding, go out to 222. Leave the Hive system and think about all the possibilities all over the world of crypto. What potential exists there?
Of course, at this time, it is still a rather small market in terms of people involved. With a hundred million, give or take, we are still looking at a fraction of the population. Just imagine what it will be like when 2 billion people are involved in digital assets and cryptocurrency in some way.
We see a lot written about different funding mechanisms that are being experimented with. As people acquire more wealth in crypto/digital assets, we will see more opportunities to keep the money flowing. If crypto can keep increasing the value of the entire ecosystem, the velocity which it travels will have significant impact. Imagine all the different technological research that is underfunded at this time. It is always a fight for money.
How about cryptocurrency funding research to end cancer? Or to fly to the moon? Or to extend life 25 years? Or to build environmentally friendly housing for 10% of the present cost.
The point is that when we look at money as a tool for collaboration, we see the enormous potential that is being presented to us. Since we are living in a world that is rapidly becoming more digitized, everything moves at an exponential pace. Collaboration takes off as more people are involved and the number of digital creations explode. Whereas there is a slower pace in the physical world along with a cap on how much can be produced in a short period of time, all this is removed when things are digitized.
Only a few decades ago, there was a limitation to the amount of information produced. Whatever information was out there was on paper. Thus, there was a limit to the amount of trees grown, cut down, milled, and eventually showing up to have information put on it. Then, of course, there was the time constraints of the firms/people who were producing the information. There are only so many hours in a day to use a typewriter or copy machine.
Now, as stated, data is generated 24 hours a day, even while we are sleeping. The amount of information available to use grows enormously every few months. Someone, in some way, is monetizing this. There is a collaboration between two parties somewhere in the process.
This is why a lot of what we thought was true in the world, no longer applies. The rules in the virtual are vastly different from that of the physical.
Thus, we need to look at the potential of money and its impact upon each of our lives. The total collaborative nature of money is also increasing at an exponential rate. This is what is radically altering the world economy although few are aware of it.
It is also move us towards near infinite potentiality. This raises the bar a great deal when it comes to money.
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Posted Using LeoFinance
