I’m a huge fan of Terry Pratchett’s Discworld series of books.
In this fictional universe the gods get their power and divinity through the belief of their believers.
The more believers the god has, the more powerful the god.
But when their believers stop believing in them entirely, the gods disappear.
This belief/power dynamic is the perfect metaphor for today’s monetary system: Our modern cash and credit based economies are based on nothing more substantial than the effervescent power of common belief.
Think about it:Our money is no longer backed by gold or silver or any physical entity with any real, tangible value. The cash balance in our bank account only has any value because we all believe it does.
And now, the advent of fully virtual currencies, such Bitcoin, take this illusion even further. Unlike the dollar, the yen and all the other “economy” based currencies we take for granted, these new virtual monetary systems don’t even pretend to be anything other than a tenuous agreement of wealth between their “user-believers”.
The question is… What happens when enough people stop believing in our money?
Will our wealth simply disappear like Terry Pratchett’s gods?
That is the most joyful second that our cash is not, at this point upheld by gold or silver or any actual substance with any level headed, unmistakable worth. The money balance in our financial balance just has any worth since we as a whole trust it does. It saves us from numerous uncertainties. Yet at the same time, much investigates required!