Stone Money- imgoingswimming

Rock, Paper, Crypto

What is money and is it actually worth anything? When we think of money we tend to think of paper bills, or coins. What if the money actually doesn’t have any value, is it still money, and what determines if something is money? The only reason something is considered as money is because if you give it to someone then that person will recognize its worth and let you buy an object that is worth the set price. If you go to a foreign country that does not recognize the US dollar bill and try to spend your money it will most likely not be accepted and therefore be worthless. Money seems to be a concrete idea, but when we actually think about the worth of money we only really look at its worth to everyone who uses it. 

What if instead of paper money we would use rocks, actually how about a one to twelve foot tall, rounded,  flat boulders in the shape of coins. You would probably say that they are completely worthless. The people of Yap would not agree with your statement. Milton Friedman wrote an article named The Island of Stone Money. In this article he talks about an American anthropologist named Willian Henry Furness III and his exploration of the island Yap and how the people who lived there used these large rocks as currency. While this currency does not make sense to us it is because of our outside perspective. Friedman says in his article “Our own money, the money we grew up with, the system under which it is controlled, these appear “real” and “rational” to us” in which he explains how to these people this is seen as money just as we see our paper bills as money. The large rocks would be extremely heavy and many of them were unmovable once they reached a location. This would lead to rocks staying where they were and when someone was paid with this money the ownership would transfer and it would be known that it was that person’s money. The idea seems so primal to us, but this money is extremely similar to our own because it is the same exact concept. When we put our money in the bank we know that we own it and it can be seen nowadays through an app. This money is just known through the bank to be ours even though it is not in our possession. This can even be seen when we buy something online or on card as we never physically hand cash over, rather numbers are just changed in accounts and it is just understood that the money is theirs. The value of money also changes depending on the time and what these people believe the money is worth.

In the NPR podcast The Invention of Money host Jacob Goldstein ties these ideas together and talks about money’s worth and its similarities to the Yaps large coins. A topic that Goldstein brings up is Brazil’s hyperinflation issues in the 90s. The problem was that too much money was being made and the value of the money changed. The value did not change because the number on each bill changed, but rather that the people as a whole believed that their currency was worth less to them. The influx in cash made this money less rare and therefore less valuable to the people who used it. Something worth ten would be worth ten thousand a year later. The currency was extremely unstable and this problem needed to be resolved. The way in which the market was stabilized was by offering a completely new set of currency called URV. This was a stable type of currency and it would be worth a different amount of dollars depending on the day. The idea is simple but odd because you are buying something with a whole new type of currency, and some people even called it fake money. Goldstein even said that the newspaper would print the value equivalence each day so people knew. This helped as something at a store was worth one UAV it would still be worth one UAV a couple of days later. The market then stabilized over time because of these changes put in place and people became confident in their currency again. This confidence is the reason why Brazil’s currency is so stable today. 

The only reason money has value is because people believe in it, but if people are unsure of this money then it becomes unstable. An alternative to cash is crypto currency. Cryptocurrency, such as the most popular Bitcoin, was first made in 2009 after our 2008 stock market crash. This currency does not use paper, metal, or stone. Crypto is made using codes on computers and are made by being mined. A computer mines them by solving very complex puzzles of code and once it is complete you have a Bitcoin. Crypto is different depending on the coin, in bitcoins code only twenty one million coins can be made, but in XRP’s coin it’s not exactly a limited number so the worth of each coin in American dollars is much lower now. Many people are unsure in this coin though because you are not able to physically hold it and it is hard to understand. When we look at the Yap people and their coins, our current online banking system, or even the UAV in Brazil we see that we don’t need to physically hold something for it to have value. Many banks also warned against crypto currency when it first came out, but only because it hurts their own business. In the article by Anne Renaut named The Bubble Burst on e-currency Bitcoin she writes about its fluctuation of the currency and how many people really have put their trust into this form of currency. In her article she cites an economics professor named Steve Hanke who says “If private money starts to become a threat for governments, they come up with many reasons why this is a bad idea,”. Crypto currencies could be the new way to pay for items. The only way for this to happen is for us to all have trust in it.


Friedman, Milton. “The Island of Stone Money.” Diss. Hoover Institution, Stanford University , 1991.

Glass, I. (2018, February 19). The Invention of Money. Retrieved September 21, 2020, from

Renaut, A. (2013, April 13). The bubble bursts on e-currency Bitcoin. Retrieved September 21, 2020, from–finance.html

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4 Responses to Stone Money- imgoingswimming

  1. davidbdale says:

    You’re a smart class; everybody is clear on the main lesson from the broadcast and readings, that money is a fiction that helps us function. And you’re a smart student; you understand the value of an anecdote to illustrate the peculiar “local” nature of currency.

    Apparently, Rhetorical Questions are irresistible. I’m finding them in almost everyone’s introductions. But, as with everyone else’s, your are counterproductive.

    Your anecdote, though, could be very valuable indeed. Here’s a story from my travels.

    Money is a fiction represented by symbols that are surprisingly local and fragile. Egyptian cab drivers, and the day-drivers that American tourists hire from their hotel lobbies, are unimpressed with handfuls of Egyptian pounds, but they’ll drive all day for the equivalent of 20 American dollars IF it’s presented in the form of an actual US 20 dollar bill. Those same drivers will reject with derision an equivalent amount (even double the amount) in American silver dollars. They don’t recognize the currency. Their logic is the same in both cases. The merchants they want to buy from are more willing to accept the Dollars than Egyptian Pounds, and nobody will accept the silver dollars. Money seems to be a concrete idea, but when we ACTUALLY TRY TO USE IT, we HAVE TO DEPEND ON WHAT OTHER PEOPLE THINK IT’S WORTH.

    I find that use of positive anecdote several times more effective than Rhetorical Questions. The puzzles are solved while they’re being presented. You get to rely on answers given instead of questions asked.


  2. davidbdale says:

    Paragraph 2. Way too much language devoted to your perfectly serviceable ideas here, Swimming. More than one main idea also, which demands more than one paragraph. You introduce yet another main idea in your last sentence, which gets no development at all. This is evidence of poor organization. Want help with that?


  3. davidbdale says:

    Paragraph 3. You’re trying hard to explain an almost inexplicable concept here, Swimming. I admire you for trying. Most of your classmates pretended their readers didn’t need to understand. But if I hadn’t heard the broadcast myself, I’d be completely unpersuaded that reading your paragraph helped me understand. The details about publishing the equivalent values in the newspaper are particularly confounding. I know my objections don’t amount to a solution, but this isn’t working. Several techniques might, if you’re interested.

    This sentence creates a lot of confusion for an unexpected reason:

    The value did not change because the number on each bill changed, but rather that the people as a whole believed that their currency was worth less to them.

    Belief has NOTHING and EVERYTHING to do with this situation.
    1. Their currency REALLY WAS worth less to them at the end of the day, week, and month. It BOUGHT LESS BREAD.
    2. Inflation runs rampant when everybody BELIEVES that the devaluation of the currency is INEVITABLE.
    3. The REAL gave Brazilians a chance to believe that something about the currency might stabilize (bread cost 1 REAL every day for many days in a row).
    4. Once the users of a currency stop worrying that its value is rapidly reducing, they stop being in such a panic to spend it.
    5. Panic spending is what drives inflation. Stop it and inflation disappears.


  4. davidbdale says:

    Your final paragraph does not begin to coalesce around a main idea. You may be personally uncertain about Bitcoin, but your essay cannot be. You open the discussion by saying:

    An alternative to cash is crypto currency.

    and you end your paragraph having come to no conclusion more decisive than that.

    You’re thoughtful, Swimming. I’m impressed that you have tried to tackle complex conceptual situations without fear. But you haven’t come to enough conclusions, or followed a single clear thematic premise throughout your 1000 words.

    I’ve graded your post at Canvas, Swimming. No rewrite is required. But you may, for one week, respond to this feedback by revising your post for a Regrade. You will receive no further feedback since you didn’t request any before grading. But if you want to try your luck, make significant revisions and place this post into the Regrade Please category within one week starting now.


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