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Privatized Currency [Again]

SuperRobotWars
Posts: 3,906
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12/31/2011 4:06:53 PM
Posted: 4 years ago
I did a thread on this topic a while back and this is me bringing it up again.

I have recently been given statements stating that private currency is illegal as the sole reason that privatized currency is not widespread, but this is blatantly false. I explain to these individuals that privatized currency is legal and cite many modern day examples [Arcade Tokens, Ithaca Hours, Company Rewards Points, Gift Cards, etc . . . ] as well as display that there are no laws prohibiting it [just minor limitations], but then they ask me why aren't they widespread. I always give several reasons as to why and the go as the following:

1] The profits to be made off of issuing a currency are quite low. The only way to actually make money is to either print more than the backing substance [or concept] and hope your currency users do not notice [inflation that is unchecked leads to valuation issues], or one shaves off a certain portion of the backing substance [concept] as people submit said substance [concept] in order to redeem notes [this is actually how the first currency issuers made profits, people deposited grain and the people holding the grain would remove a fraction of it] but this can lead to massive marginalization of profits unless you go by the Gift Card/Reward Card deal in which your company offers the private currency in order to get out of paying change, basically the face value of the card is altogether less than whatever one tries to purchase it considering anything with the face values price is worth considerably lower amounts of money.

2] Its hard to get many companies to agree to accept the currency in question, this is especially true in our modern/globalized environment in which we have to pay other countries [and other countries pay us] in order to gain access to their goods and services, it would be highly unlikely that any foreign company would see your currency as proper tender, plus thee is also the matter of getting local companies to accept it as well [but this generally can be much easier, just check Ithaca Hours].

3] Counterfeiting, although its relatively easy to combat [copy USD system and make the price of constructing a decent counterfeit the same, more than or slightly less than it's face value] it can become sort of a pain in the arse with time to combat.

4] Trust for if people stop believing in your currency they will come back to take out whatever you took from them to back the currency, unless you have a no refunds or withdrawal policy for anything exceeding a certain amount which can still be problematic if individual companies who accept your currency often need to convert it into other forms to perform transactions with companies that do not accept your tender.

With all this said the key issue becomes the initial capital to create such a currency [you have to go through all of this planning and spend quite a large deal of money only to make marginal profits in instances that you intend the currency for mass usage and still seek profits]. Backing can also be an major issue in finding out how to make it worth something.

Now with my discourse upon why privatized currencies are not widespread I would like to pose a few questions:

1} Some wish to abolish the FR [Federal Reserve] in order to force the creation of privatized currencies, to these kinds of people why do you think this would be beneficial?

2} Some individuals think private currencies are more efficient, why do you think this is so?

3} If you disagree with the positions of the types of individuals stated in 1 and 2 why do you disagree?

Also, I would like to apologize for the sloppiness and incoherence of my post, its the first serious post I have made in a long time. Please feel free to add and remove any arguments for and against this post. [I do recognize I have left off a few reasons but at the moment my brain cannot configure them properly]
Minister Of Trolling
: At 12/6/2011 2:21:41 PM, badger wrote:
: ugly people should beat beautiful people ugly. simple! you'd be killing two birds with the one stone... women like violent men and you're making yourself more attractive, relatively. i met a blonde dude who was prettier than me not so long ago. he's not so pretty now! ha!
:
: ...and well, he wasn't really prettier than me. he just had nice hair.
16kadams
Posts: 10,497
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12/31/2011 8:29:23 PM
Posted: 4 years ago
yeah... I am undecided on this issue because the federal reserve inflates to much but provitizing it would lead to machined in garages because it wouldn't be illegal anymore, or the companis might abuse it, but the goverment always does. So it is a maybe senario that is totally awful and destructive, vs a certian slow death.
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"A trend is a trend, but the question is, will it bend? Will it alter its course through some unforeseen force and come to a premature end?" -- Alec Cairncross
SuperRobotWars
Posts: 3,906
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1/1/2012 9:03:24 AM
Posted: 4 years ago
At 12/31/2011 8:29:23 PM, 16kadams wrote:
yeah... I am undecided on this issue because the federal reserve inflates to much but provitizing it would lead to machined in garages because it wouldn't be illegal anymore, or the companis might abuse it, but the goverment always does. So it is a maybe senario that is totally awful and destructive, vs a certian slow death.

Could you please elaborate upon the bolded/underlined/italicized text?
Minister Of Trolling
: At 12/6/2011 2:21:41 PM, badger wrote:
: ugly people should beat beautiful people ugly. simple! you'd be killing two birds with the one stone... women like violent men and you're making yourself more attractive, relatively. i met a blonde dude who was prettier than me not so long ago. he's not so pretty now! ha!
:
: ...and well, he wasn't really prettier than me. he just had nice hair.
UnStupendousMan
Posts: 3,475
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1/1/2012 11:43:53 AM
Posted: 4 years ago
I personally think that privatized currency is a good idea. The main problem is that other companies may or cannot accept other company's currency. I.E.:

-Company A pays me in Company A currency
-I cannot use Company A currency to buy things at Company B, which so happens to be a supermarket.
-Therefore, I have to:
1) search for another supermarket that accepts Company A currency
2) get the goods I need from Company A, which may not be willing to get them
3) steal for my goods, which is not good.

And of course there are exchange rates. Obviously, I think that privatizing currency is a bad idea.
mongeese
Posts: 5,387
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1/1/2012 12:01:17 PM
Posted: 4 years ago
At 1/1/2012 11:43:53 AM, UnStupendousMan wrote:
I personally think that privatized currency is a good idea.
Obviously, I think that privatizing currency is a bad idea.

...

What?
UnStupendousMan
Posts: 3,475
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1/1/2012 12:01:44 PM
Posted: 4 years ago
At 1/1/2012 12:01:17 PM, mongeese wrote:
At 1/1/2012 11:43:53 AM, UnStupendousMan wrote:
I personally think that privatized currency is a good idea.
Obviously, I think that privatizing currency is a bad idea.

...

What?

I fail!