Lately I participated a little bit in utopian project translating a book on money, ethics, society and it was really very exciting for me since I do consider these sciences to be of my interest.
There was a part on fiduciary money, money that doesn't have real value upon them, but are used just because people believe they have value. And also the idea was mentioned that core essence of these structures (creating new money) lies in founders making followers believe the value really exists. And then while followers buy fudiciary money from founders... founders exchange them for real assets.
...bonds...
It happens a lot of time in usual economy now with bonds. For example, if a company wants to take a loan from the money market through bonds, it issues them, and people exchange real money for those “papers”. Then they can sell them again and again. And at the end of term, fortunately, company gives back part of real value (earned during this time by the company) to paper holders.
That's why we are talking about beliefs in these type of money. Because it all depends on a company will to give their assets. And in fact, according to legislature they should do it or bancrupt (and the latter is a very good way of getting rid of any obligations).
...national currencies...
Almost same thing happens with national currencies. They are supported usually by national economies and the amount of products created or being in existence in those economies. Any decline in production doesn't need same amount of money and devaluation happens with national currency.
There's my favorite Fisher's formula
MV=PQ
that is (money) * (speed of money circulating)=(prices) * (products)
All the money should insure economy. The more non-cashed are money the more quickly they are moving in the economy.
...inflation...
For example, very high inflation can happen even with slow decline in the economy - if people are afraid to loose money and exchange all of them for products. Teacher buys bread, baker buys fish, fisher buys car, automobile company buys steel and so on. They all want to get rid of money (if they do not believe in them) raising speed of money moving in economy. And in such a way influence the prices on the other side of equation.
And here we are coming to crypto...
Aren't all of them same fudiciary money we have just a belief about. About rising, about value. One day it can happen that all of us will try to get rid of them and they will cost nothing.
Yes, we can say that now material and non-material economies are changing. And the latter gets the more and more part of the whole economy. The return on investment in real economies is more or less stable, usually on the average giving bank deposit interest +2-3%.
Non-material economies can grow much faster but according to usual classical point of view of economists one day it all can disappear. Since this speed creates fluctuations, risk, disbalance. And the new crisis can happen two or three years later as it happened with dotcoms in late 90s.
I do not advise you to get rid of tokens (I do not do it myself) but the idea should be kept in mind while making decisions. Never forget to have real assets and real business.
