
Ask HN: What are the real drawbacks of an energy based currency? - rafiki6
Fiat currencies have tremendous issues but they also serve a general purpose of allowing governments unrestricted control of their economic growth (or at the very least, money supply which has tremendous impacts or rather should be reflections on economic growth). This was done with the intention of allowing governments to be able to pay their debts, bearing in mind that if they over inflate their money supply they will suffer inflationary consequences.<p>Here&#x27;s the thing. I think it&#x27;s bupkis. We live in a global economy. The fundamental unit of exchange in nature is energy. Energy is required to change the state of all matter (either it&#x27;s consumed or released). Energy is what matters when all is said and done for human survival. Why isn&#x27;t energy or rather energy back currency the global currency of the day? I know things like electricity contracts and other energy derivatives exist but really energy is required for everything. I think by also creating intelligent derivatives of energy this currency can also assess environmental impacts. Energy is fundamental to our survival from food, to electricity, to heating and cooling to all the energy required to make all the good we consume.<p>Even cryptocurrencies are fundamentally derivatives of energy...and they consume a hell of a lot of it.<p>The biggest thing I can think of is, how does energy measure human creativity and ingenuity. The answer I have is, honestly current money doesn&#x27;t do a great job of that and we let the &quot;market&quot; decide that anyway.<p>There&#x27;s lot&#x27;s of flaws or shortcomings I haven&#x27;t considered. At the risk of starting a brutal heavily opinion based flame war, please critique and discuss!
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philipkglass
Generic "energy" is not fungible. The use-value, storability,
transportability, and exchange-value of a gigajoule differ _drastically_
depending on whether it's a gigajoule of enriched uranium, diesel fuel,
electricity, sawdust, hot water, methane...

An "energy-based currency system" is either a barter system that barters
various energy-related commodities, or it's just as arbitrary as the USD, with
the arbitrariness being set by whoever dictates standard conversion rates
between different forms of actual and potential energy.

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nitwit005
If you have a currency backed by some good, you need to be able to exchange
the currency for the good. How would it work? There's no consistent price of
energy, as it depends on the cost to get it to you and the local method of
generation.

I suppose you could give them batteries, but now you're back to tying it to a
physical good, one which has some irritating problems like toxicity and losing
the charge over time. You're probably better off choosing some arbitrary
material that's in demand, which is how gold and silver got into use.

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UK-AL
Except real currency has no real good backing it either.

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nitwit005
Which is why I started that with "If you have a currency backed by some good".

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sharemywin
for a currency to make sense it needs to be worth >>> more than what is used
to make it.

