12-29-2008, 06:05 AM
Barter is unquestionably another part of the whole picture, but the basic issue remains that money is very convenient for exchange in a manner that goods cannot every be. If I build the case example chicken coop, I don't want to get paid all at once with 600 pounds of papayas. A local currency is in essence and "on demand hypothetical" sort of barter, and offers a lot of practical advantages.
Financing is the big one.
If for example, on other topics--not suggesting it's something I want to do, but look at how it works. It is an interesting illustration. Let's assume we had Punabucks up and running, in a manner in which labor and basic goods could be, in a reasonably conveniently manner, purchased with the script.
Suppose someone wanted to build a charcoal kiln to produce bio-char. Let's say there is a certain amount of interest in the community for someone to do this sort of thing--so the system administrators allow a "permit" for the would be charcoal manufacturer to issue bonds for Punabucks at an agreed rate. This is no different than any other sort of bond. The trust in the value of the bond is equal to the trust in Punabucks, whatever that is, and trust in the charcoal guy, whatever that is. If it doesn't exist, everyone is out of luck. No different than any other currency, but the trust element is immediate--not fictitiously contained somewhere in some authority. If the project is doubtful, or the characters involved are questionable, or whatever--it's not going to happen.
So, the charcoal guy then issues bonds, purchased in dollars, for Punabucks. He ends up with cash in dollars, and now can afford to take the risk to build the charcoal kiln. Others end up with Punabucks at some rate of exchange, and the community ends up with a charcoal kiln and the ability to purchase bio char in Punabucks.
The essence of any currency is contained in trust. And only trust. The difference in a local currency as opposed to the status quo, is the trust is wholly immediate. It is contained in my neighbor. In the status quo, it's contained at Goldman Sachs. This isn't a snarky comment--it really is.
Who do you trust more? Who should you trust more? This is the basic issue.
Financing is the big one.
If for example, on other topics--not suggesting it's something I want to do, but look at how it works. It is an interesting illustration. Let's assume we had Punabucks up and running, in a manner in which labor and basic goods could be, in a reasonably conveniently manner, purchased with the script.
Suppose someone wanted to build a charcoal kiln to produce bio-char. Let's say there is a certain amount of interest in the community for someone to do this sort of thing--so the system administrators allow a "permit" for the would be charcoal manufacturer to issue bonds for Punabucks at an agreed rate. This is no different than any other sort of bond. The trust in the value of the bond is equal to the trust in Punabucks, whatever that is, and trust in the charcoal guy, whatever that is. If it doesn't exist, everyone is out of luck. No different than any other currency, but the trust element is immediate--not fictitiously contained somewhere in some authority. If the project is doubtful, or the characters involved are questionable, or whatever--it's not going to happen.
So, the charcoal guy then issues bonds, purchased in dollars, for Punabucks. He ends up with cash in dollars, and now can afford to take the risk to build the charcoal kiln. Others end up with Punabucks at some rate of exchange, and the community ends up with a charcoal kiln and the ability to purchase bio char in Punabucks.
The essence of any currency is contained in trust. And only trust. The difference in a local currency as opposed to the status quo, is the trust is wholly immediate. It is contained in my neighbor. In the status quo, it's contained at Goldman Sachs. This isn't a snarky comment--it really is.
Who do you trust more? Who should you trust more? This is the basic issue.