Preface

Finally, the last post of MAS-Chains: The Value in a New Economy series! Unfortunately, with the hustle and bustle of daily life, I have been distracted and without much time to finish this post. However, two individuals - @matthewdavid and @scipio - indirectly influenced me to finish this series.

After reading @matthewdavid's Post and @scipio's Post, I decided to put aside some time and finally edit and post the final part to the series. If you have not done so already, I would recommend you taking the time to give both posts a quick read! Now, without further ado, I give you:

MAS-Chains: The Value in a New Economy (Part #3)

Introduction

I like to think I am not alone in saying that most people I talk to about Whaleshares and cryptocurrency in general don't take well to the concept of "fake money", as they like to call it. While I absolutely love to constantly debate the value that Whaleshares provides and how cryptocurrency has value just as the U.S. dollar has value, I figured I would make a post discussing the matter. It is my hope that this series will provide all of you a resource to show your friends, family, and any other non-believers to help educate them on how Whaleshares and other cryptocurrencies are actually valuable. As always, debating is promoted, but please keep it civil! If you have any questions or thoughts on this subject matter, please don't hesitate to comment below in the comment section. Or, if you want to have this discussion with the Morte et Tributa community, you can join the MET Discord.

This is Part #3 of the series, so if you have not already, make sure to read Part #1 and Part #2 before reading any further!

This post will cover the following topics:

1. A Brief History of Money - Covered in Part #1
2. The 3 Functions of Money - Covered in Part #1
3. The Value of Fiat Currency - Covered in Part #2
4. Factors Affecting Currencies' Exchange Rates - Covered in Part #2
5. The Federal Reserve - Covered in Part #3 (This Post)
6. The Value of MAS-Chains - Covered in Part #3 (This Post)

Key Vocabulary

First, before we begin - it may be helpful to define some key vocabulary, which follow:

1. Bartering - The act of trading one good or service for another.
2. Commodity Currency - A commodity that has been established as a medium of exchange. Some examples of this include gold, beaver pelts, wheat, etc. These are commodities that have such universal value that it is widely accepted from goods and/or services.
3. Gold Standard - A monetary system in which currency is backed by a fixed amount of gold. The currency, at any point in time, is redeemable for the underlying gold. Thus, if supply of the currency increases, the amount of gold it is redeemable for decreases. The U.S. began using the Gold Standard in 1879, initiated its removal in 1933, and ultimately severed all ties to gold by 1971.
4. Legal Tender - Currency deemed as acceptable for the payment of debts in an economy/country. This currency must be accepted as valid payment for any legally enforceable debts.
5. Fiat Currency - Currency that is deemed legal tender and is not backed by any physical commodity with intrinsic value. Instead, the currency is backed by faith in the government and the economy.
6. Time Value of Money - A concept which states that money held in the present day is worth more than the identical sum of money held in the future due to its earning capacity, provided they money can earn interest.
7. Scarcity - The gap between a limited amount of resources and theoretically limitless demand. Scarcity is required for currency to have value.
8. Exchange Rates - The amount required of one currency to purchase one unit of another currency. (i.e. it costs .87 EUROS to purchase 1 U.S. Dollar).
9. Gross Domestic Product (GDP) - The total value of goods and services provided by a country in a one-year time frame.
10. Principle - The total amount of the initial investment or loan. (i.e. if you receive a loan of $1,000,000 and ultimately pay it off with $1,800,000, only $1,000,000 is attributable to the principle).
11. Interest - The amount paid above and beyond the initial investment or loan. (i.e. if you receive a loan of $1,000,000 and ultimately pay it off with $1,800,000, only $800,000 is attributable to the interest).
12. Network Effect - The correlation between value of a good or service and number of participants that participate in the good or service; as participation increases so does the value. A great example is the internet and Facebook. With few or no participants in these services, they would be worth nothing. However, as more people start to use the service the value of the service exponentially increases.

The Federal Reserve Controls the Money!

The Fed is an interesting entity. Since they are printing money for your country's economy, they must be a part of your country's government, right?

Wrong...

The federal reserve is a centrally owned bank that maintains no ties to any country beyond the debt "investments" and influence it holds in other countries' economies. To fully explain the Fed would be a full post in it of itself - if not more - thus, we will stick to the most important element: how money is brought into existence.

How is currency brought into existence? Well, the U.S. government made a deal with the Fed. The United States issues U.S. treasury bonds to the Fed and in return the Fed "oversees" (controls) printing of the U.S. dollar supply to keep it a "stable" medium of exchange. Under the terms of the agreement the Principle and Interest of the U.S. treasury bonds must be paid back with the U.S. dollars that the Fed printed.

Now you may be thinking (and if you are not, you probably should be), "But, how will the U.S. ever pay back the Fed if interest accrues on the bonds?"

Great question - the U.S. won't ever be able to! In order to pay interest, the U.S. would require the Fed to print more money, but then the U.S. would have to issue more treasury bonds! But let's not forget that this model was replicated across the world. The U.S. is just the largest nation blessed with the Federal Reserve's services.

Thanks to the benevolent Federal Reserve, countries across the world are forever placed in debt to a system whether or not those people are willing. Historically, new currencies have arisen to compete with systems structured around high centralization of power, none of which ultimately succeeded. However, they never had the technology that we have today: blockchain. We are at a monumental point in history where we, the people of the world, can leverage blockchain technology to create our own currencies that are not fundamentally backed by debt - welcome to MAS-based cryptocurrencies!

What Makes MAS-Chains Valuable?

Hopefully, up until this point, the concept of currency makes sense. Now, establishing where the value comes from for Whaleshares and other MAS-Chains may get a little confusing. If you have ever participated in any online video games, your experience should significantly assist you in your understanding.

MAS-chains are backed by the blockchain distributed ledger technology. However, this means nothing if there is not a community built on top that takes advantage of the underlying technology. The greater the community grows, the more valuable these MAS-chains become, this is widely known as the Network Effect. Now, you may ask, "Why would one want to join a MAS-chain community?". To which I ask, "Why would someone want to join Reddit? How about Instagram? How about any other number of social media platforms?" People want to join simply to be a part of a community. If they have capital and trust the value creation and honor of the MAS community at large, they will potentially even voluntarily lock up value into the network in the form of the MAS token and leverage the chain to create further value.

Or they may be wealthy, but without the resources and they want to be a part of something bigger than themselves - to contribute time and effort while both the capital sources and creators can benefit from transparently sharing, rewarding, and growing. Furthermore, why would someone not want to join a platform that provides the same purpose as its other social media counterparts but, in addition, distributes wealth to the community who are really the ones responsible for the value of the chain.

Ultimately, the backing of a MAS-chain is the community and the value it provides. For example, the citizens of Whalesharers accept Whalestake in return for their hard work in the Whaleshares community. The community decides that each Whalestake and WLS represents a certain amount of value given. Thus, the currency has value within the Whaleshares community - coming back to value increasing as the economy participation grows.

You might be thinking that this seems somewhat similar to the U.S. economy, in which case - you are right! This is very similar, just on a much smaller scale (for the time being) and with a fundamental difference: the currency is controlled by the people.

Something very important to keep in mind is that the community collectively decides who to reward within the ecosystem for value provided. This is much different from traditional economies which are controlled by the Fed. Unlike the U.S. economy, the citizens of the MAS-chain communities are responsible for deciding where the inflation in the economy is distributed. Additionally, there is no debt agreement required to issue such currencies. Thus, the MAS-chain currency will never be backed by permanent, forced debt.

Now, you may be wondering "Where does the demand for MAS-chain tokens come from? I can play for free, no one is required to purchase the token to participate." This is true, and is a good question. The demand is derived from a couple of sources. The first factor revolves around influence. As one obtains more Whalestake, Steempower, Smoke, etc. they gain more power within the network. This power gives ultimately draws more attention to the user. It gives them a higher social status per se.

A second factor relates to speculation that the MAS-chain economy will strengthen. As the community continues to grow and more and more valuable information-sharing/goods/services are produced in the MAS-chain economy, people will want to participate in the economy, thus leading to demand for the token of said MAS-chain. This is just like with any other economy and is one of the reasons why established fiat currencies strengthen/weaken to one another.

A third factor that provides demand is the ability to participate in an economy that isn't inherently subjected debt and controlled by a third party with no stake in the economy.

Again, at the end of the day - we are the ones that provide value to the currency we use. A pebble could be worth $1,000 if we, as a society, decided that it would represent such value. But when people are willing to voluntarily commit capital through sweat or stores of value to a network and its citizens' productivity, it is likely a currency with enough stickiness to survive. This is especially true in the blockchain ecosystem where representation has more checks on power through both on-chain governance and the tech's open source nature.

Conclusion

This concludes MAS-Chains: The Value in a New Economy (Part #3). Hopefully, after reading this you have obtained enough knowledge to go own the newbs educate the ignorant on the tremendous amount of value that Whaleshares (and other MAS-chains) bring to the table. The tokens that back these chains are not fake money, but a representation of the community value at large. If there is one thing you take away from this entire series, I hope it is the following: YOU, the people, are what give these currencies value. Don't fall for the facade that the currency owns you!

As always, have a wonderful day and, if you would like to learn more about Morte et Tributa (MET), continue to read below!

What is the Morte et Tributa (MET) Community?

MET is being established to provide professionals and intellectuals with a central hub to which they can share valuable, general business-related knowledge and increase awareness of the cryptocurrency regulation that affects individuals and businesses world-wide. Furthermore, it is our hope to empower everyday people by assisting them understand the laws in their jurisdiction to better protect themselves from legal repercussions.

The @met account will be used to advocate and foster a community of individualists that will analyze and critique the current state of business, crypto and non-crypto regulation and how it affects each individual state, province, country etc. In a time of regulatory uncertainty, it is of utmost importance to advocate for a regulatory framework which incentivizes innovation. If you would like your posts promoted by the @met Whaleshares/Smoke/Steemit account, make sure to tag your posts with #met.

Who Should Join

As mentioned earlier, we are looking for forward-thinking business people who will be willing to engage and help the community grow. Startup founders and enthusiasts, business professionals, crypto enthusiasts and traders, SME business owners, and everyone that hopes simply learn about business. The @MET community is a hub where knowledge is freely shared for all by all, so we encourage members to create valuable business content that pertains to businesses or cryptocurrency. Conversations can ensue from these posts that may lead to regulations and policies.

So, MET is for everyone with a business mind, that hopes to either impart knowledge or wants to learn about the business landscape of different societies from members who reside in different parts of the world.

What You Stand to Gain

We recognize that community building can be a daunting task and, for that reason, we have put in place the right incentives as a way of rewarding individuals who create quality business content across MAS-chain platforms, using the MET tag accounts.

Also, we reward individuals who make efforts to grow our Discord community by providing MET tokens to those who invite friends to join in! Also, by engaging in tasks created/sponsored by @MET, individuals will earn more MET tokens these include: winning competitions, participating in initiatives, and by simply being being a valuable member to the MET community.

What are MET Tokens?

MET are cross-chain tokens backed by the MET account's whalestake/steempower/smoke power. These tokens provide holders the ability to reward their posts with the MET account, as well as share the post to the MET Whaleshares account feed for all the community to see. MET tokens are only given to people who: Participate in Challenges, Win Contests, and do other things of value for the community!

MET tokens are on BitShares! So, please make sure you have a BitShares/OpenLedger account to receive and send them for rewards/shares on your Whaleshares/Steemit/Smoke posts!

The MET tokens currently are only operational on the Whaleshares platform, but will soon be available on Steemit and Smoke

Join the BeyondBitcoin Communities

Please join in the discussions with us by becoming a member in ANY or ALL of the BeyondBitcoin and EOSTalk communities. We have a wealth of knowledge and information waiting for you.

Morte et Tributa Discord
MET related community and topic discussions.
https://discord.gg/9C6h2W4

EOSTalk Discord
EOS.IO related community and topic discussions.
https://discord.gg/WaN27D2

Whaleshares Discord
Steemit community discussions, contests and events.
https://discord.gg/rQ5a9w

Project Milkbox Discord [NEW]
Project Milkbox community and topic discussions.
https://discord.gg/dw58678

Bitshares Discord
Bitshares development community and discussions.
https://discord.gg/z2MSfWg

About the Author

I hold a Master’s degree in Accounting with a concentration in Information Management. This degree has given me years of exposure to topics, as it relates to the USA, such as: financial reporting, financial statement audits, information systems audits, tax regulation, business law, and overall general business knowledge. Shortly after obtaining my degree I worked for a large public accounting firm for about a year, focusing on IT audits, only deciding to leave to put more focus on cryptocurrency.

While I am not technically a Certified Public Accountant (CPA), I have met the educational requirements and passed all four sections of the CPA on the first try; the only requirement left is to obtain the required experience hours, which I am extremely close to. All of this being said, I can safely say that I am well versed in business knowledge and am more than capable of learning business related concepts.

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