Money is Imaginary

It has come to my attention after listening to the NPR broadcast that money is really in illusion. Every place in the world has some form of currency. If you really think about it anything can be used as currency if deemed acceptable. Currency can be in the form of bottle caps, gummy bears, or even rocks. All of the U.S. dollars are made from the same material, but the number on the dollar is what depicts its value. Value that we created, money/currency is really what we decide to make. Everyone has some kind of currency whether it is physical paper or coin money, or digital money. The value is created by us.

In the essay titled “The Island of Stone Money” Milton Friedman talks about the island of Yap and their currency that they use. Out in the Pacific Ocean there is an island called Yap. This island really helps you understand “What actually is money”? There is no gold or silver on this island, but hundreds of years ago, explorers from the island found lime deposits hundreds of miles off the island. They then carved these discs into large stones which are known as “Stone Money”. These large stones had holes in the middle which were there to stick long poles inside of it just in case they ever needed to be moved. The Yap people realized they needed something that everyone agrees to pay with. The Stone Money was not used for everyday purchases. It was used for important events such as a daughter’s dowry or retrieving a fallen soldier’s body. This currency obviously wasn’t used for your everyday run of the mill purchases. 

Like all things at first, the stones at a point were worth nothing. Like paper money, coins, etc. The Yap people placed value on the stones which in turn created the Yap people’s currency. Currency is made by us as people. We apply the value on things which in turn creates currency. Money isn’t really anything until we place a value on it. When buying a product on Amazon, eBay, etc. There is no physical presence of money being exchanged for the product being purchased. Just numbers going back and forth through a screen. Yet somehow, the company made money off your purchase, just not physical cash. It is a weird concept to really comprehend, but just like all things, we create the value of things. We create how special something is or can become. 

In today’s day and age there is a new digital currency taking the world by storm. The article “The bubble bursts on e-currency” gives a ton of information and really touches base about the digital currency and mainly Bitcoin as a whole. This digital currency is called Bitcoin. I never understood exactly what Bitcoin was but after reading about it, I am starting to grasp the concept a little. Back in 2013, the company experienced its first crash. Bitcoin is made by complex codes created by a raw computing power through a process called mining. Bitcoins are stored on a virtual wallet and can be sent to another person anonymously. Bitcoin users can only cash out when someone wants to buy their Bitcoin. It still leaves a question asking “What us Bitcoin”? You can’t physically see or touch it yet people have been known to score millions on it. It just goes to show that we can deem anything as valuable. It is pretty evident because if everyone decided to deem Bitcoin as useless, the value would no longer be what it currently is. Value is what you choose it to be. 

Digital currency is taking the world by storm. Direct deposit is a good example of that. Direct deposit is when money is sent straight into your account, no cash involved. Just numbers racking up into your phone. Cash App, Paypal, Zelle, etc. These are apps that are used to send and receive money. Once again, no real money involved just numbers in our phones that are deemed as valuable. My generation is fueling this whole digital transactions obsession. I am responsible as well. I rarely use cash, nor do I receive it in the form of dollar bills or even a check. Money is just sent straight into my bank account where it sits there and just goes higher and lower. I have become detached from the reality of money and I am starting to become digital only. If things keep going how they are going, money will become digital only. Currency is whatever you want it to be. NRP’s broadcast interviewed Jacob Goldstein on his book “Money: The True Story of a Made-Up Thing”. He talks about how the Chinese used iron coins as their standard currency. Then a man named the Kublai Khan arrived and made their currency into paper money. ONE man, just marched his way into China and changed the currency, which goes to show that currency is made by man and chosen by man. He changed the entire way currency was viewed in China. Their coins went from valuable to useless. Then paper money took over and became the new currency. Money doesn’t truly exist, it is made by man/woman and whoever is in charge. 

All these stories lead to one conclusion. Money is imaginary. It can be whatever you want it to be, as long as you place a value on it. The people of Yap deemed large stone disks as a currency worthy of paying for important events such as a daughter’s dowry or bringing a soldier’s body back. This was deemed by the people of Yap. In China their currency was iron coins until someone came in and changed their currency into paper money. And made people abide by that. This proves that money is imaginary and that you can deem anything as valuable. Us as people choose value and money is completely imaginary and is merely a source of trading. Whether it is buying a car, food, etc. Money is imaginary. 

References:

Friedman, M. (1991 February). The Island of Stone Money

stonemoneyessay.pdf (wordpress.com)

What is MONEY? Jacob Goldstein’s book (2020, September 8).

What Is Money? Jacob Goldstein’s Book Explains ‘Shared Fiction’ : NPR

Renaut, A. (2013, April 13) The bubble bursts on e-currency Bitcoin

The bubble bursts on e-currency Bitcoin (yahoo.com)

Renaut, A. (2013, April 13). The bubble bursts on e-currency bitcoin. Retrieved February 17, 2021, from https://sg.news.yahoo.com/bubble-bursts-e-currency-bitcoin-064913387–finance.html