EVOLUTION OF MONEY AND DETRIMENTS OF FIAT

Well, in the most simple terms, it’s safe to say that Money is a legal tender that is generally accepted as a medium of exchange, I mean it facilitates trade and serves as a principal measure of wealth, to be unequivocally clear I know I just wasted my time elucidating what money means to you (soft chuckle) consider it a subtle introduction or better still just an ice breaker but here’s something you don’t see every day; money cannot be touched or smelled, it’s the currency, weird much? Currency can be the coin note or object that is presented in form of money, the basic form of money is ‘numbers’ and the basic form of currency ranges from coins to paper notes to plastic cards, I’m talking about debit and credit cards, in simple terms, as I like to say, money is an intangible concept while the currency is seen as the tangible replication of money, they can be used interchangeably depending on the context

Money as we know it didn’t turn virtual overnight; it had to metamorphize from commodity money or as you know it, the ‘barter system’. Commodity money came about from the early hours of civilization, any product that was in high demand and chosen by general consent was used as money; commodities like wheat, weapons, salt, and furs were used as money. That’s how it all started, the progressiveness of civilization then gave birth to a new kind of currency; metallic money. Metals like copper, silver and gold were used as a form of money thereby making it easy to move around with. The third form that money took marked the most important stage in the development of money, ( paper money) because to be honest, no one wants to be seen migrating from one jurisdiction to the other with gold and silver, it could be perilous in most cases. Paper money has up and downsides; the good side to it is that a body regulates it and as for the downside, id come back to it. The second best form money took or has taken is the plastic form; I’m talking about debit and credit cards. We’ve sure been able to make use of fiat so much that it doesn’t even solve inflation problems, that’s the downside of paper money.

Let’s face it, printing more money seems like the right idea to combat inflation and a rapid decline of supplies, but it’s not the most logical situation, let’s go back to the basic concept of economics then you’d see how printing more money defeats the laws of economics which are based on ‘supply’ and ‘demand’ if so much fiat is in circulation there would ultimately be an over-abundance of demand (money) but the supply of goods would not increase at a similar rate, prices would drastically increase that the money in circulation will be as useless as the ‘p’ in pneumonia, a good analogy is (1923) when Weimar republic established in Germany printed an unimaginable amount of money to combat their financial turmoil, the currency became worthless that it was used as wallpapers, in a nutshell, it was cheaper than the goods you’re connecting the dots now.

The detriments are lucid, printing money rapidly will drastically will not only lead to an increase in price it’ll also lower people’s purchasing power and savings, printing money and sporadically dispersing it to the masses will lead to a crescendo in the grand schemes of things but on the long run, the money will become useless.

Poverty is inevitable and can never be eliminated in a system there will always be people with higher purchasing power than others and printing more paper money won’t solve the jigsaw, that’s why they say ‘money doesn’t grow on trees.

There’s a myriad of ways to battle inflation ranging from finding ways to reduce your expenses to continuous investment. But let’s talk about how virtual currencies can change the status quo, you’re definitely not a stranger to the term ‘crypto currencies’ if you’re reading this it means that you should know that bitcoin is the leading cryptocurrency in the world, all cryptocurrencies are digital and decentralized, it’s way different from fiat but primarily in developed countries they serve the same purpose,  cryptocurrencies aren’t subject to government regulation and other interferences that cause inflation, they are not subject to national policies that’s why it provides a better option than local or national currencies in countering inflation

Developing countries should not shy away from cryptocurrencies it offers some unique qualities that make them more convenient, stable and resistant to inflationary factors at national or local levels. The faster we tap into it, the better.

Thank you for coming to my TED talk.