Creating Money in the Digital World
Since the birth of the internet, people have discussed a very intriguing idea:
Can humans create money within the digital world?
Let’s explore this question.
What Is Cyberspace?
Cyberspace refers to the new realm formed by all users connected through the internet.
It's also known as the digital world.
Originally, we could only transmit information in this digital world—such as videos, news, and chat messages.
One day, someone started wondering:
Is it possible to have an asset that is native to cyberspace?
Just like gold is a native asset of the physical world.
To explore this possibility, we first need to understand how gold became an asset.
Why did gold originally have value?
If we can understand how gold gained its value, maybe we can figure out how to create money in cyberspace!
Why Did Humans Originally Consider Gold Valuable?
According to the labor theory of value, the value of a commodity is determined by the amount of human labor embedded in it.
The process of mining, refining, and processing gold requires a great deal of manpower and time.
This labor investment gives gold its fundamental value.
As more merchants began accepting gold, its value grew through widespread consensus.
Gold's value = Labor Value + Consensus Value
Many items have value for similar reasons.
For example: If I go to the forest, cut down some wood, and bring it home,
That wood contains the value of my labor.
Some wood may be more beautiful or more durable, adding additional layers of value.
If there exists a currency in cyberspace that requires labor to obtain, and that currency is accepted by certain merchants and gradually gains consensus...
Then does this mean we can create a native currency for the digital world?
Does the consumption of electricity represent a form of computational labor?
For example, if I run my computer for a month, performing complex calculations and eventually producing a correct answer to receive a token—then that token stores the value of computational labor.
This concept was proposed even before the invention of Bitcoin.
In 1998, computer scientist Wei Dai introduced the idea in his B-money proposal:
An anonymous, decentralized electronic cash system in which participants could create money by solving computational problems.
The value of such currency would be based on the computational labor invested by the participants.
Since cyberspace uses electricity as its labor force, as long as that labor can be stored somewhere,
creating a currency native to cyberspace becomes feasible.
Q&A Time
Q: Why does the government say gold is not money and that only government-issued money is legitimate?
A: No, gold has always been money. It is divisible, fungible, and widely accepted—traits of a currency.
It's just that in the 21st century, everyone is born into a world dominated by fiat currency, so people assume money must be issued by governments.
But from the perspective of all human history, fiat currency is actually a recent anomaly.
Gold has been used for thousands of years.
Maybe in the year 3000, when students learn about the 21st century through brain-machine interfaces, they will read:
"A thousand years ago was a time when money was issued by governments. The power to mint coins was not yet separated from the state, and most people believed that only government-issued currency was legitimate..."