Money is Unnecessarily Expensive

Kevin Cox
Kevin Cox
Jul 20, 2017 · 1 min read

Money tokens that have a value are expensive. Tokens that promise something of value but have no intrinsic value can cost nothing to produce. Tokens with intrinsic value — like gold — or interest bearing money — or BitCoins are expensive because the tokens need protection.

Our systems of money transfer are built to protect the transfer of money tokens, and transfers cost less when the item moved has no value.

If we have something of value, we always have the cost of protecting it whether or not there is a token that refers to it. Having to protect money tokens is an unnecessary expense.

The cost of giving money tokens intrinsic value with interest is the cost of interest. Removing the cost of interest is a direct saving. However, if we eliminate interest on money, we now have the problem of giving a return on loans. We can give people a return on investment if we provide them with a share in the value produced by the loan. One way to do it is to give an interest payment conditional on value created by the use of the money. The interest is only paid after value is created.

It is remarkably easy to change any loan to operate this way and save the cost of interest on money. For investments with a long, productive life and with low operating costs the savings are many times the cost of the investment. A financial system with zero value money tokens is a remarkably productive system.

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