What is the purpose of money? We, as a nation, have grown up thinking that money was a tool for the trading of goods and other services. For some, it is a matter of survival. How we feed each other or how we purchase clothes to keep us warm. However, if you really think about it what does a piece of paper have to do with our worth?
Out in the Pacific Ocean, there is a tiny island named Yap. Hundreds of years ago, their society agreed that they would use the limestone deposits as money. This limestone was usually only used big things and not everyday purchases. The only problem for them was that it was very hard to transport these big stones. During the first transportations, one ended up at the bottom of the ocean. Although you could not physically touch it, everyone decided that it was still good.
The limestone that was used is very similar to Bitcoin, which became popular two years ago. Bitcoin is a digital payment system which allows transactions to occur directly between users without the use of a middle man. As you can see, neither of them can be physically touched but are still extremely valuable. Bitcoin on the other hand, has some people that doubt its value. These people talk about how it has no sense of authority or a central bank. They also bring up that a bitcoin is worth whatever a random person is willing to pay, meaning that the seller will look for the person that is willing to pay the most.
In my 20 years of living, I don’t think I was ever given a straight forward answer on what money was or what the value of money truly is. One thing we know for sure is that money makes the world go round.
Work Cited
Friedman, Milton. “The Island of Stone Money.” Diss. Hoover Institution, Stanford University , 1991.
Renaut, Anne . “The bubble bursts on e-currency Bitcoin.” Yahoo.com. 13 Apr. 2013. 30 Jan. 2015. <https://sg.news.yahoo.com/bubble-bursts-e-currency-bitcoin-064913387–finance.html>.
Planet Money, By. “The Invention of Money.” This American Life. N.p., 7 Jan. 11.
Reeves, Jeff. “Bitcoin Has No Place in Your – or Any – Portfolio.” MarketWatch. MarketWatch, 31 Jan. 2015. Web. 10 Sept. 2016.
Rowan Counterintuitive 