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<p>[QUOTE=&quot;Neal, post: 3897409, member: 43872&quot;]The whole idea of paper vs. base metal vs. precious metal vs. crypto, etc. misses a basic point.&nbsp; All money is backed only by faith, whether it is electronic or electrum, it has always been backed ultimately by faith.&nbsp; Barter is different because an item I own seems to me to be of equal or lesser value to me than an item you own.&nbsp; If to you your item is worth less than or equal to the item I own, we trade and both are happy.&nbsp; There is no need for backing.&nbsp; But gradually a more or less recognized system of value begins to be attached to some items, let&#039;s say shiny metal stuff or cows, and suddenly there is money.&nbsp; I may not value the cow, but I have faith that someone else will, and so there is money. </p><p><br /></p><p>If a government, or anyone for that matter, issues a substitute for the item, such as paper, that substitute relies on faith that someone else will accept the substitute in exchange for something I want.&nbsp; Thus the dollar is accepted in many parts of the world today, not because they believe the US government will give you gold for it or accept it in payment of taxes but because they believe someone else will give them something of value for it.&nbsp; I doesn&#039;t matter what form that is, whether a base metal, warehouse receipt, paper bill, or even numbers in an electronic account.</p><p><br /></p><p>Precious metals have fared well over the centuries because people historically have had a certain faith in the &quot;exchangeability&quot; of gold or silver.&nbsp; This is not guaranteed in every situation.&nbsp; If your ship is sinking, how much gold would you accept in exchange for your seat on the lifeboat? Severe economic stress, such as famine and war, see the value of precious metals vastly diminish as people give more and more of it up for food or other necessities.&nbsp; But whatever value a metal has, it has it because someone has faith it can be exchanged.</p><p><br /></p><p>This faith is what backs the crypto currencies as well.&nbsp; Even less than gold, which has many industrial uses, an electronic currency has no intrinsic and it has the added risk that hackers can disrupt the market or even unlock the chain-block technology that insures its limited availability.&nbsp; But people believe someone else will give them something of value for it.&nbsp; The wildly gyrating markets only measure the strength of that faith, which changes minute by minute.</p><p><br /></p><p>To the OP&#039;s point, the form of money will certainly change over time.&nbsp; Inflation, which is also a measure of waning faith in the exchange value of that money, will eventually force change.&nbsp; Already I find many merchants that round my change to the next nickel instead of counting out three or four pennies.&nbsp; Economics will thus drive out or greatly change small change as surely as the half cent and large cent went away.&nbsp; And, as has been mentioned, there is a huge shift to electronic money, whether in dollars or not, and talk of a &quot;cashless&quot; society. </p><p><br /></p><p>There is a downside and a backlash against a cashless society, however.&nbsp; First, it is a drain on the economy much more than producing worthless cents.&nbsp; In most states, the government already takes a bite out of almost every commercial transaction.&nbsp; With electronic money the bank or credit company takes a bite out of every transaction, even non-commercial, with no benefit to the consumer other than convenience.&nbsp; Cash can eliminate that.&nbsp; Also, it discriminates against the poor and underprivileged classes who cannot afford to maintain bank accounts or to rate credit cards.&nbsp; Further, most electronic transactions leave a trail, which may be innocent enough but may betray such things political leanings or beliefs that could lead to government control or civil discrimination, as in some countries today.[/QUOTE]</p><p><br /></p>

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