Money, Energy, and Crypto

Economist define money as having three qualities. It is a medium of exchange, a unit of accounting, and a store of value. That is all true. However, one of the most fascinating aspects of money is as a store of energy.

In the not too distant past, many families in western society lived on agriculture. That is, they cultivated the ground, planted seed, and protected that crop until harvest. At which time they would sell the commodity grown in exchange for money.

This money would go toward manufactured goods, other types of food, and raw material to make useful things such as clothing. In that aspect, it is a medium of exchange. It is also a store of energy.

During the spring when they were planting, the family labored. In the summer they pulled weeds and watered the plants. Come fall, they picked and gathered the harvest. All tasks that require energy.

Once the crop was converted from produce to money, all of the work expelled to create it and bring it to market was stored in the profits earned. If the money was greater than the work it costs then it was a profitable trade. Otherwise, it was a waste of energy.

The money earned represented many months of hard work. Once acquired, the same money could be exchanged for the labor of others. This comes in the form of manufactured goods, food from other farmers, and direct services. The goal is to have enough money to live through the next year.

Today, we mainly earn our money with labor too. Be it an office, factory, or farm — we are trading the energy of our efforts for money. We can then take this stored energy and give it to others for their labor.

Saving money is the same as saving energy. You are taking work performed in the past and using it to provide in the future. Retirement is using the labor of youth to fund the later years when we are less able to work. The only way to obtain money is to labor or sell something you purchased from labor. Including education.


Since money is a store of labor energy, education is a means to make that labor more efficient. Be it trade school or college, we become educated to make our working time more profitable.

My first job was at a pet store and my labor was worth about $4 per hour. At sixteen years old I had little in way of valuable insight to offer. Seven years later, I knew how to create software applications and analyze problems. This bumped my labor to around $20 per hour.

This means that the work required to make $20 went from 5 hours to one. Dramatically increasing the amount of energy I could generate. Ultimately this is what education does, or should do. Sometimes it fails.

If the cost of that education is greater than the increase in labor efficiency it generates then it could be a waste of energy. This could be a temporary problem due to pursuing a career that requires graduate or professional training above the initial four-year college. It could be a permanent solution where the training purchased is no longer relevant to the marketplace.

Education can and should be an investment. It is not limited to formal programs offering degrees or certificates. Reading books, watching instructional videos, and taking not-for-credit courses all count as education and may improve ones energy production over n time.


People often use the term, “making money work,” when referring to investing. This is because one can earn additional energy from the stored labor represented by their income.

Money seems to be the only non-living thing capable of generating more of itself. That means it is capable of generating labor energy. How can this be?

True, money is incapable of physical labor. However, when invested, it purchases the future labor of other people. Consider a new business venture. The founders offer a percent of the company for seed money. This seed money is used to build a product, market that product, and reach potential customers with the benefits of said product.

If that venture succeeds, the original seed investment is now worth more money than what was spent to purchase it. What just happened was the future labor of the founders was purchased during the investment. The return was part of the energy generated by their labor.

In the situation of buying an asset, we are trading our past labor for another store of energy presumed to be more valuable. This holds true for things like precious metals, houses, and collectibles. If the asset is a bond or stock then one is buying a portion of that companies collective labor with their past labor energy. This concept is similar for other investments such as futures and options.

Sometimes the investment is not profitable. This means that the future labor purchased was worth less than originally believed from the past. Now for the strange part. If debt was used to invest, the investor is using their future labor to purchase the future labor of another. When that occurs, the investor believes the future labor of someone else will be worth more than their own.


This is the opposite of investing. Here we are using our future labor to fund our present energy requirements. Meaning, we believe our current labor to be worth more than our future labor.

Some financial counselors believe all debt to be bad while others think specific debt is fine. This is not about the moral or fiscal responsibility of debt. Instead, it is a discussion on what debt actually is.

As discussed earlier, when one invests they are using their present labor to purchase someone’s future labor. With debt, one is selling their future labor or a portion of it. This means that after taking on debt, one will have less energy available from their future labor.

First, consider a mortgage. This is taking debt. Here a person is selling their future labor energy. This is investing. Here a person is buying the future labor energy of another. In a mortgage, one is selling their future labor while buying the future labor of another. In the case of Real Estate, it is buying the future labor energy of a collection of others. Meaning to take out a mortgage, one must believe that their future earnings will be less than the average of the community where they reside. If it was more, they would just purchase the house with currency.

While technical true, most take out mortgages without regard to such matters. They just want a nicer place to live than they can purchase from their current store of labor energy.

Next, consider a car loan. This is selling one’s own future labor energy for the collective past labor represented by the manufacturing process minus the maintenance and depreciation costs. It holds true for any debt acquisition of a product not expected to increase in value over time.

The point of this is to illustrate how money works in relation to one’s own labor. Next, we will discuss the mediums of labor energy storage.

Fiat Currency

There is a difference between money and currency. Money is a store. Currency is an agreed upon unit of exchange. Currency represents money. Gold also represents money. However, for money to be currency, it must allow a fair exchange of labor.

In the past, currency was based upon precious metals. One could take a unit of currency and exchange it for some amount of silver or gold at a bank. Today most currency is fiat. Meaning it is not based on anything tangible.

It is very difficult to use Gold or Silver directly as a medium of exchange in current society. This is because it is not agreed on as this purpose. Instead it has been reserved as an asset. That is a store of future labor energy. Not current. Thus currency must be a store of current labor energy.

Fiat currency is Government issued money. It‘s value is solely based upon the faith society has in the issuing Government. This faith is based less upon current supply and interest rate then it is on speculation. The Forex or Foreign Exchange market pits the world currency against each other for purposes of investing.

When news against a country is prevalent, investors may short the currency. Making it less valuable. In contrast, positive sentiment about a country will increase the value of the currency due to a rush of buyers.

Speculative price changes within fiat currency question its use as a fair exchange of labor. If speculation causes the value of the currency to change and people are only paid in that currency then they are actually getting paid less at times than they believe.

Thus fiat currency is a store of labor energy but ultimately a leaky battery. Perhaps cryptocurrencies will provide an improved store.


Today, we have a currency alternative to fiat in cryptocurrencies. Those are the blockchain network based digital currencies such as Bitcoin, Dash, and the like. While many have discussed their merits as a store of future labor, fewer have given thought on their use as a means of current labor storage. Meaning as a means to get paid for labor.

Currently, one has to first purchase Bitcoin or Ether with their fiat currency before being able to buy other cryptocurrencies. Those are the base assets. However, it does not negate the fact that one could be paid in a cryptocurrencies. The question then becomes, what does that look like?

Cryptocurrencies are mined into existence from the breaking of a hash. There are a finite number of each currency that can be created. So far, it seems pretty stable. However, there is still speculation due to crypto based exchanges that cause the price of each currency to fluctuate.

To accept payment, all one needs is a crypto wallet. A piece of software that holds their public and private keys for each peer-to-peer network they have currency in. Meaning one for Bitcoin, one for Dash, and one for all of the others.

A current problem with fiat currency as a means of labor payment is interest rates. This is the amount charged by the central bank to the country issuing the currency. Meaning that countries like the United States must pay interest on all currency placed into circulation. These interest rates act as a form of tax. Reducing the buying power of that currency.

With cryptocurrency, there is no interest rate as there is no central control. That gives a significant advantage until one realizes that he or she must convert their cryptocurrency into fiat in order to trade it for a good or service. However, it could still give people an increase in buying power.

Being paid in a cryptocurrency could mean extra income from the same amount of work. However, due to speculation, it could mean a wild ride of salary instability.


Labor takes time from our lives. Money enables us to strategically maximize the profit from that labor if used correctly. However, most people fail to understand how to best utilize their store of labor. Things like debt, bad investments, and even choice of currency have long lasting impact on our financial health.

Cryptocurrency holds promise as being a better alternative to fiat. Yet it is still very difficult to make purchases with it. Once goods and services are traded for cryptocurrency, the fiat currencies may be abandoned.