Posts Tagged ‘WoodShares’

WoodShares

April 16, 2015
WoodShares

WoodShares

What backs a currency?

We used to have gold coins, silver coins.

Some would say, the intrinsic value of the coin was its content, but this was not true, it was the symbol on the coin.

The symbol was the value, by common consent the value.

A ten euro note, is only ten euros by common consensus as to the value.

Symbols can be digits on a computer, can be a crypto-currency like BitCoin or StartCoin or FairCoin.

There are those who wish to revert to the gold standard, a currency backed by intrinsic value.

We could though turn this around, the gold has value because it is easily convertible.

Gold is not that useful. Try carrying around ingots of gold.

Bushels of wheat, cows, all can all be a currency.

A currency has two basic functions, two side of the coin we could say:

  • store of value
  • medium of exchange

When we wish to acquire something, we can barter, you have what I want, I have what you want, but only works if these two conditions satisfied.

With a medium of exchange, we can agree to buy or sell.

Store of value has problems, hoarding, accumulation.

Whatever our currency is based upon, we will try to maximise.

What if our currency was based upon forests? We would increase our wealth by maximising forests.

This is what WoodShares attempts to do, at least it could, only it does not.

If I go to a bank and say I want to borrow a million dollars to buy a forest, the bank will ask me what I wish to do with the forest. If I reply nothing, the bank will show me the door. If on the other hand, I say I wish to cut down the forest, sell off the timber, develop the land, show the bank what return I will make on my one million dollars investment, the bank will ask me are there any other woods I wish to buy.

WoodShares is a commercial forestry operation. Buy land, begs the question what was there before and being displaced. Participate in the discredited carbon trading operation. At the end of the cycle, when the trees have been harvested, ie clear felled, sell off the degraded land.

WoodShares therefore far from being a currency backed by a natural asset, is in reality a crowdfunded commercial forestry project. Neither is WoodShares a green project.


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