Topic: Metarepresented Money (Read 2265 times)

Would you call someone who goes into a restaurant and orders a meal without having enough money to pay for it "a trusted member of the society"?

Perhaps its formerly trusted member...

You will go to the restaurant and say "hello I am a trusted member of the society, here is proof, I trust that you will do the best to acomodate me, let me give you some tokens of that trust"

Can I go to a restaurant and say: "I do not have any money, but I have loads of trust, so serve me your best meal"?

Money * is* trust. If you know that the world will end tomorow, if you know that central bank will flood dollars tomorow will the value of dollar be captured by exchange and volume, No you value the dollar beause you trust that a new day will dawn, that fed will behave.
How would you value your dollars if you knew you would be dead tomorow?

Money depending on trust does not mean its value derives from that. Instead, it derives from the proportion between the exchange value of all commodities and the amount of money available to express it.

Isnt it self evident?

But on a serious note you dont trust the dollars they are the token of your trust to economy, society, that the commodities you buy are up to your expectation, your employers will do their job etc, or if you like that god will not end the world tomorow

So the more you trust your ten dollars, the more they can buy?

Either something is money and buys commodities or it is a commodity and is bought or sold for money. Of course, anything can play both roles, but not simultaneously to the same person. People can believe they buy and sell money only because deriving monetary value from debt requires mistaking the future for the present.

For me money is a token of trust. The value of it simply is a derivative of the trust.

Money must represent how much of one thing people are willing to give in exchange for another thing.

Money has essentially nothing to do with how people decide what they want or need, and in which quantity, or what they are willing to give in exchange for that, and in which quantity.

I suppose you mean you reject it out of hand. The difference between money and other goods is clear, money is never destroyed by consumption, because it is not useful for anything, while other goods have mostly use value, and sometimes just a small exchange value. But the rules of the market, supply and demand and price discovery by trade, are the same.

You are one step away of eating money rather than food (and having a great disappointment).

You keep confusing the need for money with its value. The value of money consists in its buying power, not in how much you need it. Of course, if you have the amount of money Jamie Dimon has, then you can indeed change the value of the monetary unit, despite certainly not by just needing less of it.

This is fundamental, and a trader in money types should know. The market price is just the last price on the market of one of the goods (money) measured in the other good (which is also money in our case). It does not represent the value of anything except what is in the minds of those two traders at that exact moment, and the two have opposite opinion of the value of the two things, one of them thinks that the amount of bitcoins in question is more valuable than the amount of dollars in question, and vice versa for the other trader. The other individuals that are on the market, either with offers stated, or just waiting to accept a suitable offer, have completely different opinions of the value in the moment. Not even speaking about those that are currently not trading.

A businessman in general has to have some tool to decide if what he is doing is creating value or not, therefore he needs a unit of account. The value does not have to be completely stable for that to work, just reasonably stable. He knows that when he comes out of a set of trades with less dollars than he started out with, he has lost. For many types of business that is enough. If your projects have long durations however, dollar is not good enough either, you have to invent something like an inflation adjusted dollar, or use something else completely.

People are so used to the money that they do not see it, they don't see that any trade is two way with money as half the trade, and the money is some stuff you buy and sell also. It is about viewing it from the opposite angle, where money is the stuff in your focus, and the goods you trade is the payment. When we trade forex and bitcoin, we are driven to see it because both of our good types are money.

The value of money is not "formed individually," but socially. It is not just "expressed in the market," but decided by the market. No buyer can determine the price of anything independently of the seller.


You forgot to mention they can only charge you using the original monetary unit, the value of which is hence unaffected.

The value of the money is formed individually and expressed in the market. Basically each actor compares two things at the time and decides what is best for him at that moment. A nickel or a coke. Maybe you (mirelo) confuse it with the unit of account. That is something that is chosen by a businessman, and the crucial traits are fungibility and divisibility. By the way, a 10 dollar bill is not exactly as valuable as 10 one dollar bills, that you will discover, if you go to a bank with truckloads of money, they will charge you for handling the notes.

You are confusing the value of money with your need of it. Having more money cannot decrease the need for it unless the monetary unit maintains its value.

There is, of course, a standard unit of value: it is called money. You have just asserted that ten of those units are worth ten times more than one of them. Additionally, the price of anything you sell depends not only on your individual evaluation, but also on that of the buyer. So its value must become objective to both of you, precisely, as money.

There is no standard unit of value, it is all subjective, but you can make a rough compare of things with different value: a $10 bill has 10 times larger value than a $1 bill

A ten-dollar bill cannot certify that something priced at ten dollars indeed has this (or any other) value, so it makes no sense to define money as "a certificate of value."

Money is just a certificate of value, and there is a consensus for that value among a group of people

Centralization is not a design decision more than it is a requirement of the monetary representation, as the article explains. The same goes for decentralization.

So your point being that money as we know it. When looked at as a commodity itself cannot be traded by itself and we need a metamoney which currently does not possess the attributes of money ie it is centralized by banks and other clearhouses.
But a true metamoney should also be decentalized? Ergo cryptos?

Still with current cryptos the issuing of them is imho what keeps them centralized and breaks the closure.
Ie I can produce commodities but not money. therefore money <> commodity
What would you think if money is not social multiequivalent but private multitraded in metamoney. Ie personal money and an excange in metamoney

The article is not about what money should be: it deals with what money has been, must be, and can be. For the last few thousand years, we have only had privately concrete money (gold, silver, dollars, and so on). Now we have metamoney (cryptocurrencies, like Bitcoin). The article shows the consequences of either in regard to preserving the ownership money rightfully represents.

Money, by definition, must be able to buy something. Once people's money no longer can buy anything, it is no longer money. The article begins with direct commodity exchange to arrive at a concept of money that satisfies this kind of assumption, and then continues from there.

I suggest you read the article sticking to what it says, without speculating about what money should be. If you do that, then you will realize what you describe is not money, but instead is what the article calls "individual multiequivalence."

I think the problem here is everyone gets too philosophical and ideological, where if you study economics these things are of little importance

In the modern economy, money mainly exists as data on balance sheets.  Think of it as a network of ledgers as opposed to a single global ledger like blockchain.  Most of the money created doesn't come from the central bank it comes from commercial banks creating loans.  Take housing for example.  To buy a house most people use a mortgage.  That money comes into existence when the mortgage is created.  Then you work and pay off that mortgage.  When it's paid off the money disappears and what is left is the house and the interest paid to bank.  The economy grows because people want to buy things and in order to buy things they need to engage in economic activity.

Pondering the ideology of money is a dead end exercise.  It doesn't tell you why the crash happened in 2008 and what to do about it

Money exists all the time, that is the point. Someone has it at all times.

Value is individual, and valuables can only be compared to each other. But, many things has somewhat equal value for different people. But you are right: fundamentally, you can say that the value does not move, only the things, including the money. Maybe this wisdom can be used for something.

I thought my expression was so simple and clear that I did not want to comment, but with this I did anyway. Must be narcissism.

Please let me know if it does not.

Money has not existed "from beginning of humanity." Our species has existed for hundreds of thousands of years, of which money occupies less than the last ten. Additionally, both have evolved the most just in the last few centuries.

Oversimplifying is at least as dangerous as overcomplicating.

People think that since money is so important, it has to be complicated. But it isn't, which is also why it has existed in some form from beginning of humanity.

It is just something you buy, although it can not be used for anything, it can only be sold again. Hold on to this when you read the keynesians.

What you say has three flaws:

1. If what money buys is less valuable than the sum buying it, then the seller is defrauding the buyer.
2. Even if money only were what you say it is, it would still represent a future commodity ownership at least to whom "speculates" it into existence.
3. Despite your "speculative money" being a possible monetary representation, an actual one depends on your being aware that other people have chosen to represent money the same way as you do.

No, it is something you traded something less valuable (in your mind) for, and you speculate that you at some point can trade it for something of value (for you) again.

https://medium.com/@mideava/metarepresented-money-759cfe446d84

Keeping Ownership Decentralized

Money represents a future commodity ownership. However, the only way of keeping this ownership rightful, hence decentralized, is to price commodities in metarepresented money. Any otherwise priced future ownership will not remain rightfully decentralized. This article explains why, by deriving the concepts, first of generic money, then of privately concrete money, and finally of metarepresented money from direct commodity exchange.