[MUD-Dev] Reality check ...

Vincent Archer archer at frmug.org
Thu Apr 18 09:40:58 New Zealand Standard Time 2002


According to Marc Bowden:

> And your bank account? That's "just data"....linked to real-world,
> physically affective assets. If you close your account, I owe you
> the money the data represents.

Which physical assets?

The practice of backing money, which is a sheet a paper with an
artifically decided number printed on it (the cost of a $100
banknote is about the same cost of a $1), with physical assets
(namely, gold) went out of fashion in all countries at various
points, before or after the WW2.

In the modern world, only a tiny percent of all the money that
circulates has any physical materialisation (in terms of banknotes
and coins). Most of it is exactly that: bits in databases.

As for the money itself in the bank, one of the thing the Fed
regulates is the amount of "virtual money" a bank can create. Bank
routinely give away (in the form of loans) multiples of the assets
they have received.  In terms everybody recognise, they "spawn"
gold. All the time.

--
	Vincent Archer			Email:	archer at frmug.org

All men are mortal.  Socrates was mortal.  Therefore, all men are Socrates.
							(Woody Allen)
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