19
Jan
18

Theconversation II

Evening, you are of course correct that the market, in itself, is simply an efficient medium by which to exchange, the work done by increasing entropy.

Money, the medium of exchange, is now digital, existing as a construct. So what will you tell your child when they ask where monies come from? Is it like the milk from the store, does money come from banks?

As the medium of exchange, every transaction phases through money. Money is work, an expression of the ability to do work. Work is energy. The entire capitalistic venture is built upon the ability to make a transaction to exchange energy.

The market however, does not judge the value of a thing, based on the amount of energy consumed. The value of the thing, is dependent on demand, the want for a thing, the expectation that a thing can gain you a profit. Therefore the actual exchange of money is not a pure exchange of energy.

So money, in a non-fiat world, becomes a representation of the willingness to pay for a thing that has consumed energy. It in no way represents the potential energy of the thing itself.

In such a way has bitcoin gained value, it consumes a prodigious amount of energy and yet has no physical potential to do work. Bitcoin is postmodern money in a false economy. Based on short term demand and the assumption that the energetic economy can continue infinitely within a finite world.


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