Many people view fiat currency as a stable and reliable form of money. However, a closer look reveals that this type of currency falls short in many aspects. In fact, there are five key factors that make it an unsustainable option in the long run. This raises the question: Is Your Money Safe?
In this blog post, we will dive into the reasons why fiat currency fails to meet the necessary criteria for a stable and enduring currency model, and why alternative forms of currency, such as time-based currency, may offer a more viable solution.
We will be discussing:
Understanding Fiat Currency
Introducing Time-Based Currency
The 5 Problems With Fiat Currency
Fiat Currency’s Inability To Hold Value
A Better Option
Understanding Fiat Currency and Its Shortcomings
…Fiat currency is a national currency that is not backed by a commodity
like gold or silver. Instead, its value is based on the public’s faith
in the government or central bank that issues it.
…A central bank is a public institution that manages a country’s currency and monetary policy.
Central banks are also known as reserve banks or monetary authorities.
…Hyperinflation is a rapid and extreme increase in inflation, usually at a rate
of more than 50% per month.
This would equal an inflation rate of about 14,000% per year.
Fiat currency, also known as paper money, is the dominant form of currency used around the world today. It is issued and regulated by central banks, and its value is not backed by a physical commodity like gold or silver. Instead, its value is based on trust and confidence in the issuing government. While fiat currency may seem like a stable and reliable form of money, it has several shortcomings that make it an unsustainable option in the long run.
One of the main shortcomings of fiat currency is its vulnerability to economic instability. The value of fiat money can fluctuate wildly, leading to economic crises and even collapses. History has shown us that economies built on fiat currency are prone to inflation, hyperinflation, and currency devaluation. These events can have devastating effects on individuals and entire nations, causing widespread poverty, unemployment, and social unrest.
Another major drawback of fiat currency is its lack of a limited supply. Central banks have the power to create new money at will, which can lead to an oversupply of currency. When there is an excess of money in circulation, its value decreases, resulting in rising prices and diminished purchasing power for consumers. This phenomenon is known as inflation, and it erodes the wealth of individuals and undermines economic stability.
Introducing Time-Based Currency
In a world where the future of money is constantly evolving, it’s essential to explore alternative currency models that can address the shortcomings of fiat currency.
One such option that holds great promise is time-based currency.
Time-based currency operates on a different principle than traditional fiat currency. Instead of being based on the trust and confidence in a central authority, time-based currency is rooted in the concept of valuing time as a universal unit of exchange. This means that individuals trade their time and skills for credits, which can then be exchanged for goods and services within a community.
The idea behind time-based currency is to create a more equitable and inclusive economy. By valuing time rather than wealth, this system allows individuals to contribute to their community based on their skills and abilities, regardless of their financial standing. It also encourages collaboration and the building of social capital, as people come together to exchange services and strengthen their local networks.
Another advantage of time-based currency is its ability to mitigate the risk of economic collapse. Because it is not tied to the fluctuations of traditional markets, time-based currency remains stable even in times of financial crisis. This makes it a reliable and resilient option for individuals and communities seeking to insulate themselves from the volatility of the global economy.
As we look to the future of money and the future of the economy, it’s important to consider alternative currency models that can provide greater stability, fairness, and resilience. Time-based currency offers a compelling solution, one that values time, fosters community, and empowers individuals to participate in the economy on their own terms. As we move away from the traditional gold standard and explore new possibilities, time-based currency may hold the key to a more sustainable and inclusive financial system.
The 5 Factors That Make Fiat Currency Worrisome
Fiat currency, while widely used, is lacking in several key factors that are essential for a stable and enduring currency model. These factors are crucial for a currency to retain its value and provide long-term stability. In this section, we will explore, very frankly, the five factors where fiat currency falls short, highlighting why it may not be a reliable option for the future of currency.
The first factor that fiat currency lacks is intrinsic value. Unlike other forms of currency, such as gold or silver, fiat currency is not backed by any physical commodity. Its value is solely based on trust and confidence in the issuing government. This lack of intrinsic value makes it susceptible to fluctuations and vulnerable to economic instability.
Secondly, fiat currency is dependent on centralized control. The creation, distribution and regulation of fiat currency is controlled by central banks; and this highly centralized control is in the hands of just a few people. This gives unimaginable control, to these few, over governments, policy, commerce and the lives of individual citizens.
The third factor is the problem of unlimited supply. It is virtually impossible to maintain stability in the value of a currency if the supply is not algorithmically regulated. Central banks use the supply of currency as a means of economic, political and social manipulation. This means that they regulate the amount of currency supply to suit their particular agendas, whatever those might be. This leaves the rest of us subject their individual wills.
The fourth factor is the inherent volatility. The volatility of fiat currency is a result of numerous factors, some already discussed. The fact that this form of currency is essentially just “theoretical” and not actually backed by anything, makes it a bit of a crap shoot in terms of maintaining value. We, as the end users of fiat currency, have absolutely no control or influence on its value.
Finally, fiat currency is dependent on the faith of those using it. Those slips of paper, coins or digital balances in your accounts only have value if the majority of people in the world believe they have value. Belief is something that is easily manipulated – especially in today’s world of social media, cancel culture, internet influencers and spin doctors. If a currency’s foundational principal is the faith of the people, it is a disaster waiting to happen.
And in addition, I would add that; fiat currency lacks the ability to foster community and promote local economies. Traditional currencies are not designed to encourage collaboration in the exchange of goods and services within a community. This limits the potential for local economic growth and development.
Overall, these five (or six) factors highlight the shortcomings of fiat currency and the need for alternative currency models. The future of currency lies in options that address these shortcomings and provide a more equitable, transparent, secure, and inclusive form of exchange.
More on Fiat Currency’s Inability to Hold Value
Fiat currency, despite its widespread use, has a glaring flaw that raises concerns about its long-term viability: its inability to hold value. Unlike other forms of currency that have intrinsic value, such as gold or silver, fiat currency relies solely on trust and confidence in the issuing government. This lack of inherent worth makes fiat currency vulnerable to fluctuations and economic instability.
One of the key issues with fiat currency’s value is its susceptibility to inflation. When central banks have the power to create new money at will, it can lead to an oversupply of currency in circulation. This excess money devalues the currency and erodes the purchasing power of individuals, resulting in rising prices. As a result, the wealth of individuals is slowly eroded, and economic stability is undermined.
Additionally, fiat currency’s value can be greatly impacted by economic crises and collapses. History has shown us that economies built on fiat currency are prone to hyperinflation and currency devaluation, leading to devastating effects such as poverty, unemployment, and social unrest.
This inability of fiat currency to hold value highlights the need for alternative currency models that can provide stability and preserve wealth. Time-based currency, for example, offers a more promising solution as it is not subject to the fluctuations of traditional markets. By valuing time as a universal unit of exchange, time-based currency provides a stable and resilient option for individuals and communities seeking to protect themselves from the volatility of the global economy.
Time-Based Currency: A Better Option
The benefits of time-based currency are numerous. It offers a more equitable and inclusive economy, where individuals can contribute based on their skills and abilities, regardless of their financial standing. It fosters collaboration and the building of social capital, as people come together to exchange services and strengthen local networks.
More important, time-based currency provides stability and resilience in times of economic crisis. Unlike traditional fiat currency, which is subject to fluctuations and economic instability, time-based currency remains stable, ensuring the preservation of value for its users.
As we consider the future of money and the need for a more sustainable and inclusive financial system, time-based currency emerges as a compelling solution. It values time, fosters community, and empowers individuals to participate in the economy on their own terms. By embracing time-based currency, we can create a more just and resilient financial system for the benefit of all.