WELL, in the super hot current area of discussion as to what bitcoin IS, here is a MUST READ article on currencies, exchange values and regulations. Do you remember when SALT was a form of currency? (Probably not ’cause you would be dead) Gold? Silver? Some of these former currencies are long gone, some others are now more of a store of value and now there are some new options (cryptos) to consider. And, think of this; is a dollar a share certificate? Are airline miles currency? What backs a fiat currency? (hint; nothing) So, to keep it short, HERE IS a SUPER READ.
Dr. Jemma Green
What exactly is a currency anyway, and why the regulation?
Many centuries ago, if you wanted a way to pay your soldiers or your workers, you would look no further than your local salt mine or sea shore.
For all the transactions that were too rapid or small for gold or silver, salt worked well. It had a certain intrinsic value in that people needed it to preserve food through the winter.
Salt also had two other more important properties that made it suitable for paying people.
The first was that there was a potential for it to be an expandable, quasi-limitless source of token. That’s important, because as your economy grows you will need ever increasing amounts of the whatever you’re using. If you run out, you push people into IOUs or micro divisions of the unit. Which isn’t good.
So while the currency needs a certain scarcity value, you also need to be able to expand the currency in volume or you cramp the style of your wealth creators.
The other element that makes a currency work is that it is tied to a certain amount of labour to retrieve it. Whether it was a salt mine or the sea, in the absence of any industrial processes, creating salt wasn’t easy. So some labour needed to go into creating it. And therein lay its value.
The mining process of bitcoin is reminiscent of that…”
Full Story at Forbes.com