First off – a little introduction on money. When you think of money, what do you see? I bet you picture some coins, maybe banknotes, possibly your credit card. Think about this: in 2011 cash (the things we physically picture as money) in the US accounted for under 16% of money currently available (broad money).
As debit card and credit card adoption increases, as eCommerce grows more and more, the need for “narrow money” (coins, banknotes etc.) decreases. Most of our money exists just as bits of information in the financial system. I presume that in the future most of the currencies will disappear as we’ll move toward a more globalized approach to money, a world with one single currency. We do have a world bank, we have an international monetary fund – we will have an international currency.
We will strip money out of all their symbolic value and give them just one purpose: to enhance human collaboration and trade.
We accept and trust the financial system, not money per se
What we need is a world-wide acceptance of a certain currency, the universal ability to use that currency and a integration with the legacy financial system.
Call me crazy but I believe Facebook credits, the monetary system Facebook imposed on game developers could one day do that. If you think about it it’s not the currency we have to accept. It’s the system that’s issuing it. We trust Facebook with our personal data, our likes and dislikes, to some extent our social life. We could one day trust it with our money.
One might be skeptic about the idea of a Facebook – ran monetary system. However, Facebook is dominating the internet in terms of share of time and number of users. The Internet is dominating human communication and in the future – trade. It is a matter of time until the electronic currency will shift toward a more Internet – oriented form.
If so, maybe George Soros was not wrong to buy Facebook stocks.