At first as money. Money: the history of money. Money is a thing

Very interesting. The first money arose in ancient times, and has survived to this day, but in a completely different form. Wars, revolutions, changes of governments and overthrow of kings occurred because of money. Are they the engine of history? Or is their role limited only to purchasing power? To answer these questions, we will learn the history of the emergence of money, the path of its evolution and the history of its spread throughout the world.

Ancient times

It originates from the time of the existence of ancient tribes. But the money of those times was significantly different from the money of today. It was more likely not money, but a means of exchange. So, for example, in pastoral tribes money was cattle, in Pomeranian settlements money was fish, which was exchanged for bread and meat so necessary for the tribe. It is known that different nations had their own objects that served them as money:

- in Mexico, cocoa beans were money;

— in Canada, Alaska and Siberia, ancient ancestors used the skins of valuable animals as money;

- some tribes South America and on the islands of Oceania, money was seashells or pearls;

- New Zealand tribes used stones with a hole in the middle instead of money.

In some places grain or salt served as money. The use of commodity money made it possible to exchange it with other tribes or use it for its intended purpose in one’s own household. But they were extremely inconvenient to use. Therefore, there was a need for another, more practical form of payment.

Money made of metal

Gradually money becomes metallic. And in the seventh century BC, minted coins appeared. They are spreading quickly throughout the world. This is easy to explain, because... coins are convenient to store, transport, split and combine. They have high cost with low volume and weight.

In most countries, silver, copper or bronze were used as the metal for minting coins. And only in Egypt and Assyria was gold used as money two millennia BC. With the growth of commodity-production relations, it became necessary to increase the value of the exchange equivalent. From this moment on, gold and silver become the main money.

Paper money

It received a new round of development with the advent of paper money. They appeared in 910 in China. And in Russia, the first paper money was introduced under Catherine II in 1769.

With the advent of banks, they became the custodians of money and basic values. When depositing money, a person received a certificate from the bank. It indicated how much money the banker had in custody, and the bearer of this certificate was supposed to receive a certain amount of money from the bank. This made it possible to pay not with coins, but with these certificates. A little time passed, and the certificates themselves began to be equated to real money. This is the history of the appearance of paper money. And the word “banknote” itself originates from English words“bank note” and translated means “bank record”.

And if earlier economic entity paper money was the obligation to issue real money, now the banknotes themselves are the same money.

The emergence of public central banks

The first such bank appeared in Sweden in 1661. The main tasks of the state central bank there was control over banking operations in the country and responsibility for the state of the national currency, including its production.

Other countries were slow to follow Sweden's lead. For example, the central bank in France was founded 140 years later, and in Russian Empire The State Bank appeared in 1860. It was only in 1913 that the Federal Backup System. Before its introduction, dollar bills were issued by individual American banks, and differed from each other in design and size.

The beginning of globalization

In 1944, the Bretton Woods International Conference was held, at which an agreement was adopted to link the dollar exchange rate to the gold rate and this continued until 1971. It was the dollar that became the international currency on which international trade was based. At the conference, it was decided to create the World Bank and the International Monetary Fund. It was from the Bretton Woods Conference that the modern process of globalization of the whole world began.

Bank cards

In 1950, the world's first Diners Club credit card was issued to pay for restaurant visits. And in 1952, the American bank Franklin National Bank issued the first bank credit card.

Nowadays, bank cards won’t surprise anyone. continues and gains new momentum. According to statistics, the average American currently has about ten plastic cards for various purposes.

Computers at the service of financiers

The year 1972 marked the involvement of computers in the financial sector. Thus, in the USA, a centralized electronic network is being created to record bank checks. And in 1973, the Society for Worldwide Interbank Financial Telecommunication (SWIFT) was created. The creators of this system were 239 banks representing 15 countries. For the first time, the teletype was no longer used for interbank money transfers.

Since 1977, personal computers appeared in retail sales, and this marked the computerization of various sectors of the economy and life, the creation of new forms of money and the emergence of the Internet.

Internet and banks

The Internet was developed in 1991. On next year Banks showed interest in the Internet and began to place their advertisements there. And since 1996, banks have opened full-fledged representative offices on the Internet. According to available data, the cost of one transaction carried out via the Internet is 90% cheaper for the bank than the cost of the same transaction carried out in the bank’s office.

The Internet has had a huge impact on the development of various financial sectors and on money circulation. Through the Internet you can get a bank card, make any money transfer anywhere in the world, open an account, and so on. The resources of the Internet are limitless.

Digital money

In 1993, the first digital money DigiCash appeared. Using them as a basis, smart cards are created a little later. For example, in Atlanta in 1996 during Olympic Games, more than 300 thousand smart cards were sold. And in the same year, all telephone sets in Japan were transferred to smart cards.

The presence of a personal code on a smart card makes it less interesting for thieves. Modern technologies make it possible to make digital money even more personal by adding a photo of the smart card owner or his fingerprints.

In 1995 in history of money a great change is taking place. Digital money is finally defeating paper money. That year 90% of all bank transfers in the USA was carried out electronically.

In 1998, the USA created a payment system through email PayPal, and in Europe a payment system via mobile phones PhonePaid has been created. This was the first step towards the emergence of a whole range of electronic money.

The most popular internet money in the CIS countries

On November 20, 1998, the first official transaction was carried out in the popular electronic money system Webmoney, and on November 24, a press release was issued announcing the start of Webmoney Transfer. This is a very easy-to-use service; it has several versions, including for mobile phones. Using the system you can pay for goods and services, pay for mobile communications, Internet, travel, tickets different types transport. In addition, make transfers to anywhere in the world and much more. It is the most popular in the CIS countries. Constantly developing and improving the level of customer service.

On June 24, 2002, the Yandex electronic money payment system was launched. Money". Typically used to pay for goods or services online. However, the service cannot be used for any commercial activity. The system is less convenient than the previous one, and therefore less popular.

The history of money is interesting, as is the history of the development of our world. And in order to have a complete understanding of money, its functions and purposes, in order to become a rich person, you need to know this story.

The history of money is very interesting. The first money arose in ancient times, and has survived to this day, but in a completely different form. Wars, revolutions, changes of governments and overthrow of kings occurred because of money. Are they the engine of history? Or is their role limited only to purchasing power? To answer these questions, we will learn the history of the emergence of money, the path of its evolution and the history of its spread throughout the world.

Ancient times

History of money originates from the time of the existence of ancient tribes. But the money of those times was significantly different from the money of today. It was more likely not money, but a means of exchange. So, for example, in pastoral tribes money was cattle, in Pomeranian settlements money was fish, which was exchanged for bread and meat so necessary for the tribe. It is known that different nations had their own objects that served them as money:

In Mexico, cocoa beans were money;

In Canada, Alaska and Siberia, ancient ancestors used the skins of valuable animals as money;

Among some tribes of South America and on the islands of Oceania, seashells or pearls were money;

The tribes of New Zealand used stones with a hole in the middle instead of money.

Cowries. Photo from shells-of-aquarius.com

The Afars, a warlike tribe inhabiting the Danakil Desert in northeastern Ethiopia, have a legend that their land was once extremely rich in gold. The Afars, basking in luxury, became arrogant and angered God. All their gold turned to salt, and the tribe instantly became poor. To this day it lives from hand to mouth, wandering with its skinny cattle through the meager pastures of Danakil. But the Afars believe that sooner or later they will atone for their guilt and God will turn salt into gold again.

However, salt turned out to be not much worse than gold: everyone needs it and is always in price, that is, it is liquid; can be stored for as long as desired without losing essential properties; easily divided (exchanged). So for the Afars, for a whole millennium (until the twentieth century), salt became the main means of exchange. For example, an Afar who raises sheep wants to buy milk from his neighbor who raises cows. However, the sheep have not yet had time to grow wool, so barter is impossible. He exchanges the milk for salt and is all the more pleased that, unlike milk, it will not turn sour and he can put it aside in reserve.

Salt is not a conventional commodity, unlike money, but a consumed one, so it is not yet a monetary system in the classical sense. But this is no longer a completely natural exchange, since merchants can accept salt not only as a product, but also to preserve wealth (vegetables will rot, meat will rot, but nothing will happen to the salt), and for subsequent use as a means of payment.

Gold has two important advantages over salt, both stemming from its rarity. First, it delivers the same value in a much smaller package, making it much more portable. Secondly, the risk that a new huge source of gold will be discovered (deposit or import) and its value will sharply decrease is much lower.

Food as currency

In the ancient agricultural societies of Mesopotamia, three millennia BC, barley was the most important commodity. The smallest "unit of change" was shekel- 180 barley grains (usually about 11 grams). Shekels of barley could express the value of any good or service.

Over time, the shekel became a universal measure of weight; it was used, in particular, to measure silver. In the laws of the Babylonian king Hammurabi (circa 18th century BC), the oldest surviving set of written laws, fines were specified in shekels of silver. The value of barley was highly dependent on the harvest, so silver was a much more stable "currency".

In feudal Japan until the 19th century, the main, so to speak, unit of wealth was koku- the amount of rice that can feed an adult for a year (about 278 liters, or about 150 kilograms). If a landowner was said to have 30 thousand koku, this did not mean that he had that much rice. It was the total value of all his assets - productive land, livestock, labor, reduced to the most understandable unit of measurement. Koku measured the wealth of even those estates where rice was not grown at all.

Among the nomads of the Eurasian steppes, cattle played the role of a universal equivalent: with its help they paid taxes and penalties, bought brides, and exchanged bread, tar, high-quality weapons and other necessary goods with sedentary neighbors.

All of these “natural currencies” had a common problem: they were extremely volatile, that is, their value relative to other goods fluctuated greatly throughout the year and depended on many natural factors (crop could be destroyed by rain or drought, livestock could die). In this sense, minerals were much more reliable. Gold and silver turned out to be ideal: they are quite common and at the same time quite rare, they do not corrode, do not oxidize, and are easy to recognize. For small transactions, copper was most often used: it is also quite chemically stable and widespread on all continents. From the use of metals as “natural currencies” by weight (in the form of sand or bars) there was one step left to coinage.

Slaves and shells

But the most famous example of commodity money is, of course, cowrie shells. They had two important advantages. Firstly, they are almost impossible to fake. Secondly, huge margins were generated by simply moving shells from point A to point B: in, say, the Niger Delta, a major trading hub West Africa, they cost a thousand (!) times more than in the Maldives, where they were mined most of all.

Cowries were the most durable of the “natural currencies”: the first evidence of their use as a means of payment dates back to the middle of the 2nd millennium BC, and they were forced out of circulation only at the beginning of the 20th century. They were used as a means of payment throughout Africa, India, Indochina, the Pacific Islands and among North American Indians from the Pacific coast to the Great Lakes. And in China, at one time, coins were even banned (to stop counterfeiting), and cowries were the main means of payment. Even the traditional Chinese character for "money" originated from a stylized image of a seashell.

From the 16th to the 19th centuries, cowries were a key element of the slave trade system. Europeans bought them in the same Maldives for gold, for rice (which was brought from India) or for some other goods. Thousands of tons of shells were transported to Portuguese, Spanish, and Dutch ports. Ships going to slave markets in the Niger Delta or Zanzibar often carried no cargo other than cowries. Slaves were driven mainly from the interior regions of Africa (Uganda, Congo, Zaire), where cowries were the most common “currency” and, of course, were much more expensive than on the coast.

The growing cotton and sugar cane plantations in the New World required more and more slaves. Accordingly, Europeans brought more and more cowries to Africa. The natural result of this was inflation. In the second half of the 19th century, so many shells became needed to purchase a shipment of slaves in the interior of Africa that the profit from resale of slaves to planters no longer covered the cost of transporting cowries. Thus began the decline of the slave trade, and with it the “shell economy.”

About five hundred years ago you could buy a slave for a dozen cowrie shell beads in Zanzibar. Nowadays, in Zanzibar, a string of such beads can be bought as a souvenir for a dollar or a dollar and a half.

Eternal values

Commodity money as a simple and reliable means of payment arises almost inevitably in any society where there is no established banking system. A textbook example is the Soviet economy during the period of collapse, when “normal” money was rapidly becoming cheaper and there was nothing to buy with it, and people willingly used vodka, cigarettes and similar enduring values in mutual transactions. In prison, where money is simply prohibited, cigarettes usually play their role. Anyone who has read Jack London should remember that the heroes of his stories about Alaska almost never pay in dollars, preferring gold dust. The founding father of economics, Adam Smith, a Scot by birth, wrote in the 18th century that in his homeland, peasants often pay each other with nails: “ordinary” money still doesn’t have much to spend on, but they always nail something somewhere necessary.

Money made of metal

Paper money

History of money received a new round of development with the advent of paper money. They appeared in 910 in China. And in Russia, the first paper money was introduced under Catherine II in 1769.

With the advent of banks, they became the custodians of money and basic values. When depositing money, a person received a certificate from the bank. It indicated how much money the banker had in custody, and the bearer of this certificate was supposed to receive a certain amount of money from the bank. This made it possible to pay not with coins, but with these certificates. A little time passed, and the certificates themselves began to be equated to real money. This is the history of the appearance of paper money. And the word “banknote” itself originates from the English words “bank note” and translated means “bank record”.

And if earlier the economic essence of paper money was the obligation to issue real money, now the banknotes themselves are the same money.

AUSTRALIA - DOLLAR

BHUTAN - NGULTRUM

JAPAN - YEN

The emergence of public central banks

The first such bank appeared in Sweden in 1661. The main tasks of the state central bank were control over banking operations in the country and responsibility for the state of the national currency, including its production.

Other countries were slow to follow Sweden's lead. For example, the central bank in France was founded 140 years later, and in the Russian Empire the State Bank appeared in 1860. It was only in 1913 that the Federal Reserve System was founded in the United States. Before its introduction, dollar bills were issued by individual American banks, and differed from each other in design and size.

The beginning of globalization

Bank cards

In 1950, the world's first Diners Club credit card was issued to pay for restaurant visits. And in 1952, the American bank Franklin National Bank issued the first bank credit card.

Nowadays, bank cards won’t surprise anyone. History of money continues and gains new momentum. According to statistics, the average American currently has about ten plastic cards for various purposes.

Computers at the service of financiers

Beginning in 1977, personal computers became available for retail sale, heralding the computerization of various sectors of the economy and life, the creation of new forms of money, and the advent of the Internet.

What three functions of money are mentioned in the text? Using your social science knowledge, identify another function.

Usually money is assigned several roles and functions at once. First, they act as a medium of exchange, thus eliminating the disadvantages inherent in barter. As a unit of counting, they simplify evaluation and subsequent calculations. Money allows you to store value, which means it opens the way for transactions spread over time and space.

To succeed in its tasks, money must be both widely available, inexpensive to use, durable, easily divisible, easy to carry, and reliable. Gold, silver and bronze satisfy almost all requirements, which is why for thousands of years these metals were considered ideal materials for making money.

Today we are more or less happy with paper money, as well as coins in general. And they are made from real garbage. What's even more surprising is that we joyfully use money that we cannot see at all. Today's electronic money travels from the employer to our bank account, and then to our favorite stores, without ever taking a tangible form.

Money is, first of all, a matter of confidence in who pays us, who issues the money we receive, and finally, confidence that a particular institution will fulfill its obligations. Money is not metal. They are trust itself. And it doesn’t matter whether it is embodied in silver or clay, on paper or a liquid crystal display screen. Money can be anything from cowrie shells in the Maldives to huge stone discs in the Pacific Islands.

There is another point of view on the essence of money. Its supporters believe that true money is precious metals, and paper promises are accepted as money only because they are the embodiment of metal money. Otherwise they are just impostors. Therefore, the money supply must be tied to the amount of gold coins and bars in the Central Bank.
(N. Ferguson)

Money appeared much later National economy: at first, ancient tribes used means of exchange (livestock, fish, jewelry were exchanged for bread, meat, fabrics), and different peoples used various means of exchange. For example, in Mexico cocoa beans were used as “money”, on the islands of Oceania - pearls and shells, in Alaska and Canada - the skins of valuable animals.

Such commodity exchange relations were not very convenient and the need arose to create a universal exchange equivalent. This is how money appeared. At first they were metal (when manufactured in different countries materials such as copper, silver, bronze were used). Paper money appeared only in 1910 and since then has become a part of our lives.

The emergence of money

The first metal money, minted coins, appeared in the 7th century BC. They quickly spread throughout the world, as they had a high cost with low weight and volume. In addition, they could be conveniently transported, stored, combined, and crushed.

With the expansion of commodity-production relations, a need arose to increase the value of the exchange equivalent, and silver and gold became the main money. The year 910 was a turning point in the history of the development of money - it was at this time that paper money appeared in China. But if earlier their essence was simply the obligation to issue real money (of corresponding value), today paper banknotes themselves are money.

History of money in Russia

Before the advent of money in Russia, cowrie shells and necklaces made of precious metal were accepted as payment for goods and services. Around the eighth century, dirhams, silver pennies, which were called kunas, appeared in Rus'. In the 10th century, kunas were replaced by Western European money, denarii - coins made of thin silver, on the surface of which there were primitive images of kings. By the end of the 10th century, Kievan Rus launched its own minting of gold and silver coins.

As for the first paper money in Rus', they appeared under Catherine II in 1769: issued paper notes from 25 to 100 rubles could be freely exchanged for copper money. Around the same time, two banks were opened in Moscow and St. Petersburg.

Development of money

The word “banknote” itself translated from English means “bank record” - this name was not chosen by chance, this is clearly evidenced by the history of paper money.

So, the monetary system (both in Russia and in the world) began to actively improve with the advent of banks. Banks initially performed exclusively the function of custodians of valuables and money. When depositing money, a person received a certificate indicating the amount held by the bank. This made it possible to pay not with heavy coins, but with light and convenient certificates. Over time, the certificates themselves began to be equated to money.

With the growth of the economy, the inconvenience of coins in the exchange of expensive goods became apparent. To buy or sell such items, you either had to make huge coins or take a bag of coins with you. The problem was solved with the help of paper money (credit notes, banknotes, banknotes). On a small piece of paper the denomination was indicated - as large a number as desired. A small suitcase could hold a fortune. The only problem that remained was to ensure that the correct number was indicated on said piece of paper. Really, what’s stopping me from adding an extra zero and thereby increasing the denomination of the banknote by an order of magnitude? Until now, the state has been the guarantor of the correctness of money.

The development of information technology led to the emergence of electronic money (second half of the 20th century). A bank card (VISA, MasterCard, etc.) no longer contains information about the amount of money. In fact, it is only an access key to an account - a certain amount of money. Today, a bank card is the main attribute of a person’s availability of money.

But technology has already taken the next step. In 2014, the mobile payment system Apple Pay appeared. Now you don’t even need bank cards to pay for services. It is enough to have a mobile phone. Money has become just an application in mobile phone, without any specific material attributes, that is, a completely virtual entity, which is implemented using a special program at the time of purchase.

We have identified two main characteristics of money - a certain value of the measure of the price of a product and some confirmation of the correctness of this measure. Recent advances in information technology and the decoupling of money from a specific medium (gold) show that this is quite enough. Based on the above, I propose the following definition:

Money is reliable information about its quantity

Cryptocurrencies and people: “rich” and “poor”

Fitzgerald once wrote a story that began: “The rich are not like you and me.” And someone said to Fitzgerald: "That's right, they have more money."
Ernest Hemingway. Snow Kilimanjaro

Cryptocurrencies (bitcoin) were conceived as a kind of revolutionary tool that is designed to change the financial world (for example, or). However, as I have already shown, the creators of Bitcoin stepped on the rake of the gold standard, and the revolution did not happen. Let’s figure out what wealth is from a mathematical point of view, and how much cryptocurrencies can change the balance of its existing distribution.

The dividing line is not based on the amount of money. In this case, we would have to draw the boundaries quite arbitrarily. Indeed, is 1 million, expressed in some currency, already wealth or not yet? What about 10 million? And are we talking about the market value of the entire property or the ability to spend such an amount at once? Or should we focus on the car the person is driving? What if he walks at all? There are more questions than answers.

I want to offer an original basis for dividing people into so-called “rich” and “poor” based on the mathematical methods that people use when handling money.

Money is often associated with the word "a lot." So, first of all, let’s figure out what “a lot” means from a mathematical point of view. The answer to this question is complex. The ancient Greeks formulated it as the heap paradox: how much grain is already forming a heap, and how much is not yet? Let us reformulate the paradox in relation to money:

A million dollars is a lot of money
If you take one dollar away from a pile of money, the pile will still remain a pile.

Consistently applying the second rule (999999, 999998, ...) we will get to 1 dollar. And according to this rule, $1 is also a lot of money. Which is obviously not true. This is the paradox. At some point, a pile of money ceases to be a pile, but at what point? In mathematics, attempts to answer this question became one of the reasons for the emergence of fuzzy logic. However, for our reasoning, the answer from the field of probability theory and statistics is of interest - the law of large numbers.

As an illustration, I will take a simple model of enrichment and wealth distribution. Imagine the entire population of our country (approximately 146 million people) investing the equivalent of $1 in a simple game. In this game, each participant tosses a “fair” coin at each step (the probabilities of getting “heads” and “tails” are the same):

If the result is “tails”, the participant loses his bet and is eliminated from the game.
if “heads” appears, the participant receives a prize equal to the bet made and continues the game

Again, for the simplicity of the model, we assume that you cannot leave the game yourself, or withdraw part of the money from it, or add more, in addition to the initial bet. The game continues until the participant throws heads in one of the rounds or accumulates a million. In each round, the participant makes a bet with all the money that he has accumulated in the game at the moment. If we apply this model to the business world, it roughly corresponds to a closed joint stock company, in which each participant contributes the authorized capital, dividends are not paid, and only the majority shareholder can sell shares (shares).

Let's evaluate the attractiveness of the game for the participant. At each step the amount of money doubles. Having invested only 1 dollar, the participant at the next step already has two dollars, at the next 4, and so on. At the tenth step, the participant already has more than a thousand dollars, and by the twentieth round he becomes a dollar millionaire. A story that is quite consistent with the stories about people who came to America with a few dollars in their pockets and then ended up on the Forbes list. So our simple model has a certain relation to reality.

However, tossing a coin is a matter of random outcome. In each round, a participant can either double his fortune or lose everything (become bankrupt). Psychologically, the more money a participant has at the moment, the more offensive it will be to lose, although initially only one dollar was invested. What are the chances of becoming a millionaire? The answer to this question is given by the binomial distribution formula. The probability of throwing twenty heads in a row is less than 0.000001 (I used the MS Excel formula for the binomial distribution):

As we can see, the chances are slim. Only 140 people out of 146 million will become millionaires. And again, this is quite consistent with the fact that the Forbes list for Russia includes 200 people. Our model continues to show its performance in real-life applications.

In addition to the small chances of success for an individual participant, our model has another important property: it cannot be predicted in advance which of the participants will become a millionaire. The participant, entering the game, does not have any formula, scheme, or approach on how to throw a “fair” coin in order to win twenty times in a row. And this property is also true. Everyone hears stories about people who got rich. Books are written about them, films are made and legends are made. But, tellingly, no one had heard of people who got rich by reading books like Think and Grow Rich, Rich Dad Poor Dad, or Sir Richard Branson's biography. And all this because:

The basis of wealth is chance and its systematic use

At the heart of all the stories of people who became rich, like the participants in the model described above, lies a fair amount of luck and the coincidence of a huge number of circumstances, without which success would not be possible. No systematic path to wealth has yet been discovered. In the garages of sunny California, thousands of people assembled computers, but only a few became rich. And in the 1970s, no one could have said that Bill Gates or Larry Ellison would become them. However, the success stories of today's IT "rich" make heads turn and create the illusion that they can be repeated by one person. But the odds are about the same as throwing heads twenty times in a row as soon as you saw someone else do it.

How can we use randomness and probability in a systematic way? The answer to this question is precisely given by the law of large numbers. Let's put ourselves in the place of the organizers of the game used in our model. According to the terms of the game, the loser in this round loses all the game money, and the winner doubles his capital. Obviously, you can use the money of the losers to pay the winners of the round (much like in a financial pyramid). There are three options:

The number of winners is equal to the number of losers. In this case, all the money of the participants leaving the game goes to those who threw heads and remain in the game. The organizers of the game have no choice.
There are fewer winners than losers. The organizers are in the black. They receive an amount of money equal to the size of the bet multiplied by the difference between the losers and winners
There are more winners than losers. The organizers must pay winnings from their own funds, or, like the organizers of pyramids, if there is a shortage of new participants, declare themselves bankrupt

The organizers of the game are interested in ensuring that the number of losers is no less than the number of winners. In the first round of the game, the probability of this event is approximately 0.5:

In the first round, the chances of an individual participant (initially “poor”) and the organizers of the game look identical. And we need to get a systematic use of probability by the organizers (the “rich”), that is, such a game scheme so that they stably and systematically support the game and make a profit. To do this we need to find practically reliable event in this game. That is, an event whose probability is 1 or close to this value. We again use the formula for the binomial distribution in MS Excel and by selection we find that with a probability of almost 1 (accurate to four digits) the ratio of winners and losers will deviate from the equality of winners and losers by no more than 23,600 thousand participants:

In statistics, this is called a confidence interval. The idea is that with a given probability (for example, 0.9999) the value of a certain value (in this case, the number of losers) will be within a given range. In our case, we found that in the first round the organizers will receive or spend no more than $23,600.

If we know exactly the maximum possible expense, we can create a stable game. Where can the organizers get this amount? The answer is widely known: commissions (banking business), taxes (government), premiums (insurance), etc. Simply put, charge each participant a fee (for participating in the game) that is insignificant compared to the bet. The minimum required share of the bet for this is determined by the ratio of the maximum expected deviation of the number of winners from the average (23,600) to the total number of participants in the round (146 million) and is equal to:

On one of the popular cryptocurrency exchanges, livecoin, this is exactly the size of the minimum trading commission (it’s amazing how accurately we “predicted” this number using our simple model, isn’t it?). If we take from there the maximum commission size of 0.18% and apply it to our model, we find that the practically guaranteed profit of the organizers of the coin game in the first round is equal to

In subsequent rounds the situation changes for the organizers. On the tenth round, the number of players should be reduced by about a thousand times, and the bet size will already be 2 ^ 10 = $1024. The maximum expected number of winners deviating from the average is 750:

Accordingly, the minimum required commission on the tenth round will be already

On the 20th round, the minimum commission reaches 16%. It turns out that the fewer participants in a round, the more likely it is that the number of winners will deviate from the number of losers and the more unpredictable the game becomes for the organizers. This is the manifestation of the law of large numbers. The position of the game organizers (“rich”) is more stable and profitable, the more participants (“poor”) there are in the game.

In the cryptocurrency space, there are at least three groups of players already taking the “rich” approach:

cryptocurrency exchanges - charge fees for transactions, deposits and withdrawals of funds
sellers of mining equipment, incl. video cards
electricity producers

For these three groups, the Bitcoin price itself is practically unimportant. The only thing that matters is a large number of participants in the cryptocurrency game.

The described model looks almost flawless with a large number of participants. However, there is a small flaw in it - the confidence interval still does not cover a reliable event (probability 1), but a little less. Even if this is a 0.00001 chance of failure for the game organizers, it is precisely thanks to this small value that there is a constant rotation in the list of “rich”. If you look at the history of information technology, thirty years ago it was impossible to predict which IT specialists would be in the TOP 10 richest people in the world today. However, it is technology that underlies the wealth of four out of ten people in the TOP 10 for 2017. The first Forbes list of the TOP 10 was dominated by real estate, which in 2017 only reached 18th place.

Cryptocurrencies could indeed become a game changer in the global distribution of wealth, creating the opportunity for another reshuffling of the Forbes list. But the chances of an individual participant, whether he is playing on the Bitcoin course or launching another startup, are slim. Unless, of course, he comes up with a scheme." rich." And, in my opinion, the virtual economy provides great opportunities, since it is easy to create and spread mass participation.

Who deals with cryptocurrencies: amateurs, regulators and maybe professionals

In a world where humanity was becoming redundant at an unprecedented rate, we both maintained a status left over from another era: professional workers
Peter Watts. False blindness

Cryptocurrencies emerged amid the rapid development of the virtual economy. This is an economy that is created entirely by software in the human psyche. That is, the goods and services of this economy do not exist in the material world, but arise at the moment of interaction of a special software and man. First of all, this computer games. Virtual money is already widespread in this economy. This money exists and is used only in the virtual economy, but can be exchanged for conventional, so-called fiat money, that is, money whose value is guaranteed by one state or another (rubles, dollars, etc.). It is also possible to purchase virtual money using fiat money. And you can already do business in the virtual economy.

The development of the virtual economy is due not only to the rapid growth and spread of information technology. No less important factor- release large quantity people's free time. Indeed, if people spent all their time making money (in the real world), then there would simply be no time left for the virtual one. But, thanks to automation and robotization, an increasing number of people will be forced to look for an alternative occupation. And the virtual economy, with its limitless growth opportunities, is ready to offer a worthy alternative.

An interesting feature of the virtual economy for us is the low entry threshold in terms of vocational training. The same applies to cryptocurrencies. Information about what it is and how to get started (how to start mining, how to trade cryptocurrency and even get an idea for a startup) is freely available. You don’t need to graduate from college or get a diploma - you can join the game right now by spending a couple of hours on Google or any other search engine. This is exactly what is happening now in the field of cryptocurrencies. Few of the millions of participants in this sector have any specialized education.

A similar situation is observed with other information technology: programming, big data, artificial intelligence. On the Internet you will find a lot of information that you can begin to apply to practical problems without leaving home. If you don’t get tired of it, then in a couple of years you will be able to get better at it and find permanent job. And you can squeeze out a professional who didn’t get on the Internet in time to master a newfangled toy like blockchain:

The virtual economy is an amateur economy

For a virtual economy worker, the profession does not guarantee a comfortable future. Higher education, a stack of certificates and many years of experience in some branch of the virtual economy cannot protect a professional from being laid off. On the other hand, employers do not want to overpay for competencies that can be purchased much cheaper from a novice amateur.

Where should a fintech professional go? As usual, to the big players (banks) and regulators. Sooner or later, cryptocurrencies will be regulated and assimilated into daily life. And, contrary to the original idea of decentralization, cryptocurrencies will simply replace current money, which is already almost all virtual.

The creation of a self-regulating cryptocurrency seems to me an interesting task. Since one of the key problems, now solved with the help of manual manipulations with a single parameter (the refinancing rate), is maintaining the optimal amount of money in circulation, professionals can direct their efforts to this task. Unlike Bitcoin, the quantity of which is fixed, but the rate fluctuates unpredictably, the cryptocurrency of the future will itself maintain the required quantity and rate, based on the needs of the economy. If it is possible to create such a cryptocurrency, then states will be able to transfer to this technology the function of maintaining the optimal value of money and the amount of money in the economy.

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Comments 173

- - - - There you are homework, old man: describe the difference between the business entity “Tula” and the business entity “Ford”.
        Spoiler
        When delving deeper into the study, the difference between subjects blurs, remaining within the framework of the form of exercise of authority.
        So far it hasn’t worked out very well, but it’s a start. Minus one dogma flushed down the toilet - that’s not bad.
        When it dawns on you that those guys didn’t create an economic system, but a buggy SWIFT (by the way, it’s also private), which will fuck half of the users halfway through, then the dogma will merge, but for now we’re waiting for an epiphany and the moment “oh no, they fucked all the exchanges!!!” The popcorn is already there.
        Won't this not giving a damn cause some kind of cunning distortion?
        Will a change in the coefficients of reducing a multidimensional problem to a one-dimensional one cause a skew? It can't get any worse.
        In fact, there is another objection to tightly stable money.
        A stable decline in a currency leaves a currency stable. But you generally don't understand the problems with the system. And it is much simpler: the world is running faster and faster and is afraid to stop. All economies grow, even if they don't need to.
        Second homework: think about what would happen to the capitalist economy if artificial aging and chipping of consumables were universally prohibited? And why is this SO much worse for all corporations than much of what you've written here?
        
        Now explain how you can separate money from economics and jurisprudence? This is not clear to me at all.
        For example, you declare the property “transfer money via the Internet.”
        And it, in general case, does not work.
        You won't be able to transfer money over the Internet if your bank's connection is broken or if it doesn't trust your connection. You cannot transfer bitcoins if you do not have a single node connected. Again, you cannot download money to your local computer and pay for goods from a flash drive. In addition, you do not have the opportunity to use other communication channels: you cannot transfer finances either by phone or by radio, although it is quite possible to ensure the proper level of connection security.
        From this point of view, pizza or sushi will be much more affordable financial instrument: the methods for ordering them are not limited and depend only on the capabilities of a particular company.
        And, by the way, it’s clear why this is so: your card or wallet are electronic keys with which you sign your orders. The bank holds the money and carries out these transactions. That is, this is not electronic money in a vacuum, this is real money in the hands of dirty gremlins over whom you have a share of power. Or maybe, according to local security policy, “you have no power here”©, and therefore, ahem, YOU WILL NOT TRANSFER MONEY VIA THE INTERNET AHAHAHAHAHAHAHAHAHAHA!!1!!©
        The same goes for cryptocurrencies.
        
        You are declaring a lack of meaning or “sense.”
        However, above you were unable to substantively object to the definition of “unit of measurement”.
        You did not want to accept such an interpretation, based on the instability of this value. They say that prices for goods fluctuate, and exchange rates fluctuate. But you have dismissed the inconstancy of the meter or second. Although it is difficult to argue with their inconstancy on the scale of the macrocosm. They, according to the theory of relativity, depend on speed, that is, suddenly, they are expressed through themselves. You are not able to say for sure whether meters or seconds will be the same in other reporting systems. Moreover, you are not able to answer at what speed you are moving in order to set your canonical one. Automatically, you will reach your finger to your temple to twirl your finger and say “I’m standing,” but, for a second: the planet rotates around its axis (0.5 km/s) and around the Sun (30 km/s), or even around the Milky Way ( 20 km/s), which itself moves through the universe (230 km/s), the movement of which is no longer available to us for calculation.
        But, okay, I went a little in the wrong direction. According to SRT, which, by the way, is guaranteed to work and is used in geolocation and astronomy, the meter and second depend on the speed of movement of the observer relative to the observed object. That is, on Earth there are only one, on the Moon there are others, and on some E-54-63456, which revolves around a system of three stars, they will be unstable due to the intricate orbit.
        At the same time, while we are inside the Earth, intuitively all statements about the instability of the meter will seem like nonsense to us. We will not have noticeable changes until times of crisis. And as soon as we begin to explore space, it will turn out that the clocks of spacecraft will need to be adjusted regularly, corrections will need to be made in the design and trajectories, and those strange ones, from the 56th, first live 10 years for our 1 year, and then for ours 10 years age by 1, so they spend 10 years preparing the design plan, which we carry out for 10 years, and in the interim they are delivered and installed. At the same time, at the moment of acceleration of the delivery person, the crew is locked in special cells so that the impact of acceleration does not destroy the body and damage the psyche.
        It's the same with international trade. While we live in closed system, we have very stable prices of goods, which change only with technological innovations (example - the USSR). But as soon as we open up to the external market, it turns out that some of our internal goods are undervalued, some are overvalued, some are missing and need to be purchased, and some can be sold 1000 times more expensive than before, because they don’t have it. who is not there, and everyone wants it. And based on the relationship between prices, trade turnover and political momentum, one has to constantly adjust the exchange rate in one direction or another. At the same time, the cost of local products changes under the influence of external demand and supply, so the influence of money within the country also changes, and, in addition, production is adjusted to export and import, which also makes its own adjustments. And until the system stabilizes, the state is taking a variety of measures to find and establish a new exchange rate.
        The same thing, one to one. Money is simply a unit of measurement and a universal depreciation for economic activity product.
        Really, the existence and mass use of meaningless objects is very strange.
        I say this in the sense of “our whole life is a game.”
        Still a gambling addict, only, like any other psychos, he refuses to admit the presence of an illness.
        The game is called "market economy". Its global meaning is to occupy and feed the population. One of the success factors in the game is “efficient use of resources.” The local meaning is to maximize the number of chips, i.e. Receiving a profit.
        You contradict yourself three times. If this is a game, then its meaning is to win, that is, to make the others lose. (Here one could argue that there are strategies with many winners, but in conditions of limited resources everything comes down to a single winner.) If this game is life, then the price of defeat is death. That is, the goal of “employing and feeding the population” is not in the foreground, the main thing is to survive. But this is one of the behavioral strategies that contradicts another strategy, “efficient use of resources.” It is effective to use all those who are unable to work or are ineffective for fertilizer or feed. Replace effectively manual labor to automatic, and then see the previous paragraph. It is effective not to waste resources on rest for workers if preparing a new one costs less than rehabilitating the old one. In history, examples of the transition to such an “effective” strategy are quite common.