Topic: Does Money Need Competition To Flourish - page 3. (Read 621 times)

This is nice healthy discussion, I'm loving it.
IMO, at what form could be the competition? Even cryptocurrencies value are being based with fiat and not with food or things.
You cannot say "I want to trade my 1 Bitcoin for 100 pieces of canned goods." As long as we are stuck with our traditional way it's difficult to let it go.
The hardest part will be the mass population that will try to adopt the situation. They will need to learn it if we are talking about cryptocurrencies as the new competitor. It cannot be "gold" otherwise, scientists will be calling us like going back to being homo sapiens.
Bartering is all I could think of but if all your bills are paid thru "fiat" then how are you going to extend your electric consumption if they will cut it down due to lack of fiat for payment.

Almost every job requires money if you have money you can rise to the top of the competition and exercise power. Everyone competes to encourage money competition is an inherent aspect of the business not just in the retail industry but in a free enterprise system for every industry the us retail industry is relentlessly competitive measuring the largest us retail chain in terms of customer experience brand value innovation policy reputation franchise and even fidelity compared to all other retail competitors. As the economy improves money is needed to develop itself.

I am not sure how much of it is currency competition. The thing observed when we stack up to different currencies one another and see their different values is that it's only reflection of a couple of factors like the economic power of a country, their political and sometimes military dominance, the debt they have, and so on. So in a sense, traditional currency only reflects the competition between countries. Crypto might be different as it does not have the same economic or political background as FIAT (well, it does but in a different way than other currencies). Crypto seems to be benefiting from the competition.

Hmm I guess the better term here would be economy? or economic power? Money IS merely a medium imo, whether we are using multiple types of currency for different countries or one global currency, it's still a medium nonetheless. Countries compete with each other over how their products are developed, how it is used by consumers and whatnot, which makes them develop more and grow more, to outgrow their competitors. Pretty much development begets development, it's simply a never-ending cycle.

I don't think it's currencies that compete with each other, but people's choices with each currency and the way the economy works. Currencies have been around for a long time such as shells, snails, stones, copper, gold coins, banknotes… so far we have more currencies in online banking and finally cryptocurrencies. They are developed to match the value of goods, labor and are guaranteed by scarcity, convenience, anti-counterfeiting.
People are self-conscious about each coin in each period, so they have invented new coins and are supported by human society. So the evolution of money is human's sense of monetary nature to make the right choice. The development of money is the result of human evolution.

Ikr the chinese are preparing for their Digital Yuan. Im not sure what that is but its definitely not going to be a decentralized cryptocurrency. Heck yeah it might not even be a cryptocurrency, just some sort of usual Yuan but in form of digital payment


I think the OP was referring to crypto as the competition to money. Most of the cryptocurrencies are created to be the next payment system . So in correlation with his quoted references from Darwin,  pretty much you can see cryptocurrencies as an evolved form of the current fiat system and a competitor for the current system

Absolutely! I love the comparison. WIthout the competitiveness, there's no growth, so if all the companies held a monopoly over a certain market sector - they wouldn't develop as fast and efficient as they're doing now.

In addition, we can see how harsh environmental conditions accelerate the "natural selection" among the companies. A good example is Ponzi Schemes. These are the companies that carry "bad genes". And when there are stressful conditions in the economy, e.g. inflation, depression - these are the first ones that burst and die. While the truly good companies, that have everything backed up survive.

For sure, although it is very tough for any feasible competition to gain ground against fiat currencies.

It's essentially a monopoly. The government stipulates that by virtue of law, their own fiat currency is legal tender and hence worth something.

Even if competitors spring up in the short run, such as BTC, the government can simply pull the switch on the regulation end and start their draconian campaign against it.

But over the long run, it is survival of the fittest as you say. The masses will speak and act us eventually against the rampantly depreciating fiat and moved to decentralised currencies as it has happened time and time again throughout history, imho.

Bad money drives out good money.

You seem to misunderstand the purpose of money. It is simply a store of value. Before money existed people had to barter - e.g. I'll cut your hair in return for some of your freshly picked strawberries. Instead of constantly having to find ways to exchange such value, people decided that coins and notes could be used as a storage medium. A good currency will hold it's value and not be too unpredictable. There are plenty of other things in life that have value (paintings/whisky/cars/precious metals) and often they are measured in terms of the amount of money it costs to buy it from the owner. Money doesn't need competition, it is simply a well understood mechanism and accepted form of exchange which can co-exist with many other items of value.

If we check to theorize that no competition will happen towards the same industries globally, I think we will still be old where the latest technology is radio. Connecting with people from other countries would be complex, and information would still be in books and not easily accessible. It's hard to think about it, but I think that can be the scenario.

Competition would always be there and imagine just money, there wouldn't be another alternative towards it but look where we are now. Many possible tradeable currencies from coins, valuables, etc., as long as the person you are trading with perceives its value.

Additionally, there wouldn't be any standard if there's no competition. People would accept one, and we all know that it's impossible to have an "agreeable" thing with our society. The best way to fix those different situations from the competition is to have a standard. Having standards is required, IMO, so that everything is standardized and settled towards what every nation should have and learn.

I think this is relative but what can make money become competitive can also be tied to inflation. Inflation can either devalue or increase its worth. If you have inflated economy then the money is less competition because it value reduce and hardly valuable both locally and internationally and that gets a responsible government to start setting up competitive mechanism up like introduction of inception and maybe increase investment, partnership with investors and provision of cheap repayable loans to push up production that could drive down cost of goods.

I don't think money has to have a competitor in order to flourish. It is not some kind of organism or an organization that suddenly evolves and increases its potential when threatened in a match. Money serves as a payment method during ancient times up to this date. It stabilizes the economy of a country and controls the market flow. In fact, money's value tends to go higher or lower depending economy itself. So basically, the economy will be one of the main factors why monetary value goes up and down. One best example would be the money exchange rate. The more your country's economy is growing and stabilizing, the lower the exchange rate of it to the universal currency, the dollar.



 

The facility represents labor and goods. They are soulless and cold. Only countries impose politics to make currencies compete with each other. That takes away the essence of money, money becomes a tool to achieve other benefits.
Bitcoin currency is the most advanced generation of world currency and it helps us to see the essence of traditional currency.

No, I don't think that money needs any competition because it's not an organism, it's just a tool that is used to do transactions in exchange for services or products. The value of money is dependent on the growth of the country and not competition, competition will only lead to deflation, remember that if there are chocies, the lowest price is going to be one's that will be favored and that's the opposite of flourishing.

We have national currencies,that compete against each other on the FOREX markets-dollar,euro,frank,etc..
Are they becoming better,by competing on the FOREX markets?Nope,I don't think so.
Money are a pretty specific product.It doesn't expire,the demand for money is always strong,everyone needs money,in order to survive.The problem is that central banks don't want to control the money supply anymore.They just want to boost the inflation and pump the economy,by producing more and more debt.
This devalues money,so the people want spend them fast,before they lose more of their value.
The central banks need proper management,not competition.

Money or Currency has to evolve with the needs of the people that use it. Let's take the evolution of payment methods as a quick example and why things are changing...

Humans first bartered with Goods and Service (I give you 6 eggs for 1 bread) and that was fine, until someone figured out that you can replace the goods and services with something that represent value. (1 x seashell = 6 eggs etc..)  It was just more effective to pay someone with 20 seashells ..than having to pay them 120 eggs for say ...a wagon wheel.

Then in ancient China, someone figured out that you can use paper or rocks carved in a specific way to use as currency and later metal coins was used. (Gold & Silver) ....and things evolved from there.

Then paper currencies was backed by Gold and when people figured out that Gold will not be enough... they created (IOU's) out of thin air to be guaranteed payment that are backed by the government. (Today we call it Fiat currency)

Then clever people invented computers and databases and debit cards and credit card.. (Now you do not even own the money, but you borrow it from the Banks and pay them interest for using it)  

Satoshi Nakamoto then developed "Bitcoin" ...because he wanted to offer people a payment option that were not controlled by governments... and also something that gave people some privacy. (pseudo anonymity)  

Bitcoin evolved into 1000's of Alt coins .... and it is still evolving since then.   (People wanted more privacy and the developers gave them Dash.... people wanted better Smart contract platforms and they developed ..say Ethereum... 

Competition has to be moral/healthy though.  Competitors need to pass all the safety standards to  considered success/moral/good.
If a competitor is breaking safety standards/rules while others in thesame field are obeying them, the ones breaking the safety standards may "succeed" first in the business and gain undeserved reward/success.  That's one of the reasons we have bad products (typical "processed sugar" instead of honey for example) in consumers goods.
Whoever solves an important problem first without breaking the good standards/rules deserves the right market. The rest could be tutored by the best so that we have more best competitors. No one is left to die else it could be considered immoral competition.
Darwin theory is based on selfishness which is actually against the fact that good Earth is supposed to be filled with living things that coexist in harmony and selflessness

Meanwhile, the central bank already prepared their own central bank digital currency.

Well, personally, I rather more intrigued by the question of did these giants companies are in the game of healthy competition or not? When we mentioning these giant companies I took their skin in the game experience and all the big data that they have. Not to mention that big tech companies are acquiring much smaller competitor that has a threat to their business model. And that makes them slaying in the market share.

Speaking about the absence of competition. Well, I believe if that's happening there will be no things being made. So indeed competition is essential in such hierarchical human life/nature.

That is why it's called money as it is used to pay or used to receive payment. Even now, there are some barter going on instead of using money to pay or receive payment but as we all know paying fiat money is mostly done.