When studying many economic principles one of the first topics someone encounters is currency. Currency is understood to be the driving force behind most economic advancement, but it doesn’t need to be a coin or bill. When studying these topics One might wonder, ‘What would happen if there was a form of currency that was replenishable and was not only used for trade but also consumption and what would happen if that currency stopped being produced?’
When confronted with this question one might first think of the ancient people of Africa. They valued many things more than gold back then due to them having an abundance of gold but little resources like salt. In fact, because salt was needed to not only survive the desert but also preserve recourses one nation, who was once poor, rose to becoming one of the most influential nations in Africa, just because it had salt mines (Mingren, When Salt). This trade didn’t even make the nation trading gold for the salt poor, in fact, they were also able to increase productivity to meet, and exceed, the demand for salt. Which means that it is not inherently bad to make currency out of a consumable resource.
On the other hand, what would happen if the need for that type of currency remained, but people stopped producing it? A good example that could be used it the game Genshin Impact. In the game there is a type of coinage that is used called mora, but it is not only used for trade but also as a catalyst for refining weapons and using alchemy. Because of this, mora is constantly being used by the people and to keep up with demand it is constantly being produced to prevent deflation. A problem only arises with the world’s currency when the god who created mora stopped producing it. While the people in the game haven’t really felt the impact of the god’s decision MatPat, from Game Theory, predicts that many problems would arise from this event (Patric, Game Theory). The first thing he predicted would be that the currency would be either used until it no longer existed, which would end in a technological deceleration as well as leave the nations defenseless against monsters, or the people of the game would start hording the currency in an attempt to get better prices though deflation. Both scenarios would and in disaster and would be unavoidable. Which is why consumable currency is not a good idea for the long term but can be very good and profitable, for both parties, for the short term.
References
Mingren, W. (2019, April 28). When salt was traded for gold: The Salt Trade of West Africa that built kingdoms and spread culture. Ancient Origins. Retrieved December 4, 2021, from https://www.ancient-origins.net/history-ancient-traditions/salt-trade-0011802.
Patrick, M. (2021). Game Theory: The Hero That Broke Genshin Impact! YouTube. YouTube. Retrieved December 4, 2021, from https://www.youtube.com/watch?v=QIjASllDEu0.