Gold, Dirt, and The Mona Lisa
The Balance Between Rare and Abundant Objects — Post #4
If you could print money from your computer would you?
No.
That would mean that your friend could also print money from their computer, and their friend could, and so on. And if everyone could easily do that, no one would want it.
Money works when it’s hard to obtain. If someone has money, we trust they added value to society. Society returns that value by paying them money. Brain surgery is harder to perform than baking a cake, which is why surgeons have more money than bakers.
Money must be abundant enough that everyone can use it, and rare enough to be valued. There is a balance. We can’t use the Mona Lisa as money because, while rare, there is only 1. We can’t use dirt because, while abundant, it is not rare.
Gold has been the ideal balance throughout history because it is rare and also consistently found around the world. It was a great balance between rare and abundant objects that worked for thousands of years.
Now, I have a post planned for discussing the gold standard and why bitcoin is not the new gold. But that is for another day. The important thing to know is that gold was money for years because there was a limited amount (or supply).
This is post #4. The others are located here.
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