the theory now money can take a lot of forms gold coins digits on a computer paper rectangles seashells it really doesn't matter so long as people agree it has value now that value can be very abstract i'm sure there are some of you watching that will say that fiat currency which is by far the most common currency used around the world today doesn't truly have value those same viewers might advocate for a return to the gold standard because gold is a little bit more tangible as a store of value especially since it can't just be created out of thin air but even gold drives a majority of its value from people believing it has value sure it's rare and it's a great conductor and it looks kind of pretty but it's just a metal being stuck on a desert island with a gold brick is just as bad as being stuck on an island with a wad of cash and actually a quick side note is that gold scarcity is actually a major problem when trying to use it as a currency most economies around the world today try to target a low level of inflation of around one to three percent depending on the central bank they do this so people are motivated to either invest or spend their money which stimulates the economy if a finite resource like gold was used as a currency then a lot of people would just choose to sit on it knowing that the economy will grow but the supply of money won't making their holdings more valuable every year this stagnation would stifle economic growth which is why most economists see moderate inflation as preferable to deflation anyway all of this is to say that gold is not much better than paper rectangles when it comes to being a store of true value or a currency they both depend almost entirely on people agreeing they have value this is where energy is different it really does have value both in the sense that it can be used to make other things a value and because it can be used to improve your own quality of life not just humans but all life as we know it has valued energy above almost everything else trees reach for the sun to conduct photosynthesis lions hunt zebra to feed on their calories and humans fight entire wars over access to oil fields an economy that just prints lots of money isn't necessarily rich and even all the gold in the world doesn't mean much unless it can be traded for something else just ask midas but an economy that can produce lots of energy is simply wealthy not enough water oh well just use desalination plants no natural resources that's fine just import them then use your limitless supply of energy to transform those raw materials into a value-added product export that product back at a markup and then import even more raw materials this is actually basically what iceland does today to a less extreme degree so if you want to learn about how this plays out in reality go and watch that video after this one economics is a study of scarcity and theoretically any economic problem can be solved with unlimited energy what's more is that sure energy can't be created or destroyed but it can be transformed into more useful forms almost endlessly someone sitting on their life savings of kilowatt hours is likely to see the value of those savings decrease over time as an economy increases its capacity to generate energy in usable forms of course if this energy-based currency was to become a reality we wouldn't be walking around with pockets full of batteries we would likely do
START_SELFPROMO_TOKEN so if you want to learn about how this plays out in reality go and watch that video after this one END_SELFPROMO_TOKEN