If you are a philosopher, an economist and a physicist al rolled together, it will certainly make explaining the concept a lot easier! It is in fact a very simple idea, based on fundamental principles. This is also why it is very easy to implement the idea, but difficult to explain, because not everybody is familiar with the principles involved.
I have discovered lately that it is easier to introduce the idea from the monetary side and then allow the currency to explain itself.
Imagine a currency unit designed to have the purchasing power of one unit of electricity. Lets say it is a crypto coin called bitENERGY.
We now have a crypto called bitENERGY, that has an everlasting purchasing power that enables you to buy one unit of electricity with it. And as we all know, one unit of electricity = one kilowatt-hour of energy.
So our bitENERGY coin buys one kilowatt-hour of energy now and forever, in the same way that a bitUSD SmartCoin is designed to buy one USD now and forever, or a bitGOLD is a derivative equal in value to one ounce Troy fine gold.
Now keeping in mind that most essential goods - the stuff like basic foods, energy (electricity, fuel, etc.), water and basic medicines you really need to sustain a healthy life are 'energy intensive', meaning that energy is a dominant factor in the cost of producing those, what advantages would it have for you to have bitENERGY as your currency?
Will the prices of essential stuff be more stable in bitENERGY or in USD?
Which currency will it be better to have your pension savings in, bitENERGY, or USD?
Which currency will be better to negotiate minimum wages in, bitENERGY, or USD?
Which currency will have a more stable value relative to essential goods, bitENERGY, or any of the currencies with values dependent on market sentiment?
I would love to hear your opinion on this. There are more things to discuss, some of which I have already addressed in my blog. Would be grateful if you could have look at those as well.
Regards
That is an interesting idea. Any fiat currency is unstable as it is based on confidence which could disappear overnight which it has done already for a few countries. Your example of bitENERGY is interesting. I believe pegging the value of your currency to one unit of energy would be more stable in the long-run. Don't get me wrong, prices of energy can fluctuate because of demand and supply shocks in the energy market. Improving technology should in the long-run keep the cost of energy down.
Even if costs of energy fluctuate, households would still be able to access energy at the same price so that is not a huge problem. Fluctuating energy costs could mean the prices of goods not sensitive to energy consumption could fluctuate. Again, this would most likely only be temporary.
This is definitely worth a ponder. Following my current thought process, what you propose sounds like a reasonable idea.
Thank you for your time @spectrumecons
I find the way in which virtually every aspect of the market over time adjusts itself to changes in the price of oil as a major source of energy fascinating. It shows how powerful and important that inherent relationship between energy and production really is.
A major problem with the current monetary system is that such fluctuations in the fiat price of energy creates havoc in especially the less advantaged and also less powerful sectors of the economy - the poor always lose out, whichever way it goes.
Curing the symptoms by traditional economic means is a task too big to tackle and letting it over to market forces to rectify too painful and too slow to endure, including massive labour strikes and riots, with their own negative side effects, while pensioners suffer more poverty by the day, with their losses never truly regained.
The only preemptive cure for that is a currency that somehow preserves its purchasing power for energy - in effect a price fix on energy, which is of course anathema for the financial/economic elite.
A decentralized currency, however, that tracks is value to be the price of energy in fiat, or its price in terms of some other commodity, like a rare metal, made possible by the SmartCoin/bitshares facility, and that the workers corps can insist in trading with and pensioners can convert their savings to, can render them immune to these negative effects.
The effects of a currency like this will over time be much more far reaching, in fact rendering the current financial system and the practice of charging interest something of the past. But that revolution, however advantageous it may be, is not the primary point. The prime objective is providing protection of quality of life to the disempowered, powered by a neutral, decentralized, incorruptible means, made possible by blockchain technology and the bitshares/SmartCoin software so brilliantly engineered on top of that
Kindest regards