Jeff Wang Blog

Modern money has no intrinsic value

and I think that makes it the most fascinating case study ever

The USD is the global reserve currency and 60% of world transactions are dealt in USD

That’s crazy

The USD is backed by US.

But if the country’s economy fails, like Venezuela, Ecuador, or Zimbabwe, then the currency also fails. Zimbabwe now uses the USD after their currency fell to a value of zero. Now you can get 100 trillion dollar Zimbabwe bills on eBay for roughly $80

Money has value not intrinsically, but universally is accepted as valuable because of a universal trust

This is the reason a lot of things in our world exists

Communities, religions, brands, Bitcoin and all cryptocurrencies

Even the local bar you go to, which might not intrinsically be better than the pub two doors over, will garner more people if there is a higher perceived trust of value

Certain parts of India don’t accept the 10 rupee coin because it is perceived as non-legit, despite being fully and legitimately backed by the Central Bank of India

psychologically, we want to tag along on what everyone else uses

and that’s why money is valuable: because we all deem it to be

But what if one day we don’t?

That is why money is so interesting. It is a platform for power, but also a platform subject to collapse