14 Pages Posted: 23 Nov 2014
Date Written: November 17, 2014
The current system of frictionless convertible currencies reduces the number of money-related control variables effectively to one. I argue that this one-dimensionality is the cause of the recurrent bubbles and crashes in the financial system for thousands of years. But now we can create new, complementary forms of money that enable a better self-organization of our economy. For example, “Qualified Money” would introduce reputation-dependent conversion rates to reward investments into quality. Moreover, I discuss the roots of the EURO crisis and some ideas how to overcome it.
Keywords: Bitcoin, digital currencies, reputation system, financial architecture, unfeasible control problem, multi-dimensional money with a memory
JEL Classification: E00, G00
Suggested Citation: Suggested Citation