Having gone to public school here in the US as a kid, I was never taught these things. Maybe a few of the ideas were mentioned here and there, but even if, I was gazing out the window daydreaming or staring at the clock counting down the seconds to when I could leave that wretched place. It just wasn't my style of learning...anyway....
If you were raised in the US public school system, or another system somewhat similar, you too may have not been taught the basics of economics. It is, but should't be, surprising to me, when my friends look at me like I'm an alien when I talk about what I think is pretty basic stuff. But then I remember I too was once like them.
I want to start off with the maybe the most important principle:
Have you ever wondered, or asked yourself "What is money?, Why do people accept it? What gives it value?" If so, then you're already ahead of the pack. Most people haven't asked those questions and thus mostly believe that money has value because government says it does. Which couldn't be further from the truth, just look at Venezuela or Zimbabwe for examples of that.
So....what is money? Simply put, money is a medium of exchange for goods and/or services. Prior to money, people would barter or trade.
A common example is one like this: One farmer would barter 3 of his goats and 2 of his chickens for his neighbors cow. It worked for the time being and everyone involved in the trade was happier because of it.
The one farmer valued the cow more than he valued his chickens and goats, the other farmer valued the chickens and goats more than his cow. Win-win for everyone. The tricky part was when there were lopsided deals that couldn't easily be made via this method.
Money now days is usually paper or in coin form. However, the transactions done under this model are not done via hand to hand exchange for the most part, but actually just data sets in computers going back and forth. But that is for another post, let's get back to value.
The money we use today has value because people believe it to have value. The fact that the US government says it has value has no real bearing on if it does or does not have any actual value, in reality. The people decide.
For example, if the US government said tomorrow that all US currency starting immediately would be phased out and in its place would be a world currency, let's call it the NWC. If you have 20K worth of dollars in your bank account, you will be given 20K NWC. Like an airdrop. Identical to the one we just experienced here on the STEEM blockchain.
The difference being that the US government is stating the the US dollar is no more, it's worthless and replacing it's perceived value is the NWC. I would gander if the government did this that a large majority of its citizens would go along with it. The dollar would be gone and a new currency would take its place.
Unlike STEEM and HIVE, however. They both currently have value, clearly, as people are buying into both of them, albeit at different rates and possible propping one of them up using not so kosher tactics.
Regardless, permission-less money (like STEEM, before TRON took over) and HIVE, have no ruler, no one person stating this or that about it. It is up to the market to decide its price and decide if it will rise or fall, be useful, or die on a failing exchange.
HIVE is worth 11 cents right now because the market says so. Currently, for reasons most of here can guess, there is more HIVE on the market than people are willing to buy, thus the price drops.
The day a majority of people stop having faith in their government, is the day that governments currency ceases to have value. If no one believes in the legitimacy of their government, how can that currency have any legitimacy either? There is a reason people are wiping their asses with a hundred trillion dollar bill in Zimbabwe.
The STEEM/HIVE hardfork and subsequent airdrop will be of interesting use case in the future regarding VALUE. If the main reason people came to STEEM to begin with is because of STEEM's initial promises of non-censorship and essentially sound money that YOU control, then HIVE will easily come out the winner of this split.
I'm betting that is the case, and while STEEMIT may not go down in oblivion, that would ruin too much credibility for a certain purveyor, HIVE will be valued much more than STEEM in the long run.
The difference imo, one is saying loud and clear: "This token has VALUE!!!!"
While the other is saying: "You tell me.....do I have value?"
I hope you enjoyed this mini-series I am writing, educating others on basic economics. I am sure there is much more I could have gone on and on about VALUE, but I hope you got the point. If there is something you would like to add about the topic, or argue against any of my points, I thoroughly encourage you to do so. Next on the agenda will be about supply & demand/inflation, hope to see you back soon!
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