The Value of Currency is not What You Thought

Anyone dealing with cryptocurrency needs a basic education in a few simple elements concerning currency.  What makes any currency accepted as a currency?  And is any currency is a "REPRESENTATION" of what supports it, and has no value other than the cost of paper and ink to print it.  Seen above is a U.S. dollar bill that assures anyone that it can be redeemed in silver bullion.  So, the value was not in the paper, but what it represented.

The U.S. dollar is not backed by silver or gold as it had been until 1933.  The United States abandoned the gold standard in 1933 and completely severed the link between the dollar and gold in 1971.  After that, the U.S. dollar's strength is the "Full Faith and Credit".  This begs the question, "What is the 'Full Faith and Credit" that backs up the U.S. dollar.

A dollar bill used to say, “This note is legal tender for all debts, public and private, and is redeemable in lawful money at the United States Treasury or at any Federal Reserve Bank.” Look at a dollar bill today. It simply says; “This note is legal tender for all debts, public and private.” In other words, you can’t redeem it for “lawful money.”

What the Treasury would have you believe is that GNP backs the dollar. GDP is defined as “The monetary value of all finished goods and services within a country’s borders in a specific time period It includes all of the private and public consumption, government outlays, investments and exports fewer imports that occur within a defined territory.” 

Without sounding radical, the real shift from fully supported money ended before the Internet or cryptocurrency was even conceived.  Frankly, the 1971 abandonment of the gold standard left the door wide open for whatever the government calls "legal tender" rather than lawful money that had been backed by some stable and tangible commodity.  The "Commodity" backing the currencies of many or most countries is the "Faith and Credit" of the work and assets of the people in the country.  This "commodity" is called the "Gross National Product" or GNP of the people of the country.

The goal of this course is not to criticize fiat money or government policy.  We are laying a foundation to understand the Good and Bad of any currency, including cryptocurrency.  

Essentially, the integrity of any currency is what supports it.  That support can be pure hype and enthusiastic promises, a technology breakthrough, precious metal, historic earnings, commodities, or real estate.  

Returning to our basic understanding of TROPTIONS, there is no hype or stunning technology breakthrough.  TROPTONS use a calculation based on the actual trade of "Goods and Services" within the system.  The INDEX that tracks TROPTIONS (aka XTROPTIONS.GOLD) tracks the flow of transactions which means that there is substance behind the valuation of TROPTIONS.  This valuation is based in the real "Goods and Services" that are represented by each and every transaction tied to TROPTIONS.

The xchain.io is an unbiased calculation based on daily transaction activity.  No one controls the index, and the constant valuation demonstrates that there are trades happening hundreds and thousands of times per day.  Some are quite small, and some are huge.  Finally, know that the valuation in 1997 was $11.00 when XTROPTIONS started, the fundamentals are impressive.