Money from the Future
How does money travel in time? Here are the details.
This article is a follow-up of Time Travel: How banks make money by borrowing it from the future. Read it now, if you haven’t yet:
As I mentioned in Time Travel, most of the money in the world is made not by the government printing out notes, but by banks giving out loans.
Money travels back and forth in time, like the Kin in Neil Gaiman’s Nothing O’Clock. So, there’s many times more money in the world than what governments print.
That might seem strange at first — but who said bank-notes equals money? Even banknotes can lose their value. That’s what the book Millions by Frank Cottrell Boyce is about. In that story, the UK’s pound is going to be replaced by the Euro, so all the pound-notes will soon be invalid. People have to exchange them for euros before the deadline, or else they’ll turn overnight from valuable cash into worthless pieces of paper.
The same thing actually happened in India last year, in a more dramatic fashion, when the government declared 500 and 1000 rupee notes invalid overnight.
So if money is not in the notes, then where is it?
As David Graeber found in his book Debt: The first 5000 years, the main question about money is not where it is, but where it isn’t.
Money, the book Debt explains, is a way to measure what someone owes someone else. But it doesn’t have to be in coins and cash. In olden days, people would sometimes write down records of what other people owed them.
If you think about it, that’s also what banks and digital wallets do for us today. They have a list of how much each person owes, and give it to them in cash only when they ask for it.
How does money work, when it travels in time? Is it like Mark Zuckerberg’s virtual-reality tour, which you can see but not alter? Or is it like A Sound of Thunder, where you can actually change the past?
The answer is, of course, the latter. Money can do things even if it’s borrowed.
Here, there’s one important difference to note. Money can travel in time, but cash can’t. When money travels, it leaves behind a note and enters a new one. Take Beetle’s loan-money, for example.
The money was in Digger Wasp’s note, which went to Beetle, and then to the bank to pay back the loan. The money then skipped back to the note Beetle got, back when he took the loan in the first place. And finally, Beetle gave that note to Caddisfly.
The system works because people don’t try to withdraw all their money at once. If Aphid had tried to withdraw his money before Beetle paid back his loan, the bank wouldn’t have had enough cash to give.
In real banks, they always hove some amount of cash ready. Loans are constantly being given out, and loans are constantly being paid back — but there’s always some cash kept ready. Still, if everyone tried to withdraw their money at once, the bank would go bankrupt.
Usually, banks don’t even give their loans in cash. They give it as a transaction into a bank-account. That way, they don’t lose cash, and the money is more free to time-travel again.
There is one problem, however: not all borrowed money is from the future. Why? Because not everyone pays back their loans! Sometimes, a bank finds that the loan money it gave wasn’t from the future at all. It was money very much from the present, which the bank gave from its own pocket!
The reason banks can handle that is that they don’t work exactly the way Aphid’s bank did. They also charge interest. Interest is extra money the bank charges for its time-travel service. It’s what the bank keeps for itself, and it’s what the bank uses to make up in case a loan doesn’t get returned.
Naturally, the bank doesn’t want to spend its profits on loans that won’t get paid back. So it tries to avoid such loans — by predicting the future. More specifically, it tries to predict whether a borrower will pay back their loan or not. Banks can’t see the future any more than you or I can. But they can look at things like a person’s income to predict whether they’ll be able to pay back the loan at all.
The Dead Past is a short-story by Isaac Asimov about seeing in time. But it’s not about seeing into the future, only into the past.
Actually, everyone sees into the past. They can’t help it. That’s because light takes time to reach your eyes, and sound takes time to reach your ears. When you look at something a few metres away, you’re actually seeing how it was a few nanoseconds ago.
When you look at the Moon, you see its position a couple of seconds late. It’s like using Skype on low bandwidth, where it takes some moments for you to hear or see what the other person said or did.
Light takes eight minutes to reach you from the Sun. So when you check where the Sun is, you’re only checking where it was, eight minutes ago. Light from Saturn takes over an hour to reach you. Light from the nearest star takes years.
The further away you look, the further back in time you see. The Cosmic Background Explorer or COBE spacecraft looks so far that it can see the early days of the Universe.
But that’s not what people mean, when they speak of seeing into the past. They mean being able to control what they see, and where, and how far back in time it is.
That’s what the “chronoscope” in The Dead Past does, at least to a certain extent. Just as you see things when light bangs into your eyes, so the chronoscope detects objects with a different particle. That particle is the neutrino, which (in the story) has the special property of being able to travel in time.
The idea of a chronoscope is to have a sort of palantír — which sees places far away, not in space, but in time. And, like the palantír, the chronoscopes in the story are a closely guarded object. Only people authorised with a government permit are allowed to use it. And it even seems like the government is blocking research to make chronoscopes better.
Governments have some control over money, just like they can have some control over chronoscopes. To start with, they’re the only ones who can make money.
Of course, anyone can “make money” in the sense of earning money. But governments are the only ones allowed to actually print notes and bring new money into existence. To create money that never existed before.
Or are they?
Money is just something that everyone agrees to use because everyone else agrees to use it. As Yuval Noah Harari wrote in his book Sapiens, you don’t have to believe in money. You just have to believe that everyone else believes in it.
It works the other way too. When old ₹500 and ₹1000 notes were declared invalid in India rumours went around that 10-rupee coins would be the next to go. And, because people thought they were useless, they actually became useless for a while — because many shops stopped accepting them as payment.
Bitcoin is a modern form of money that wasn’t created by the government. In fact, nobody knows who created it. All they know is that the person used the made-up name Satoshi Nakamoto while writing about it.
Bitcoin is the first of the cryptocurrencies, a new kind of money that works on a “blockchain”. A blockchain is basically a list of all the bitcoin transactions in the world; a list of which account has how much money and whom it paid the money to. The difference is that the blockchain is decentralised. It’s not controlled by any one person, or group, or bank, or even government. Anyone in the world can have a copy of the blockchain, and everyone in the world can check that the transactions were valid.
When Bitcoin was invented, many people thought it was a good idea. So they started accepting it as payment. Because it was being accepted, more people started accepting it. And now, it’s practically a valid form of money just like anything else.
Bitcoin is not the only non-government currency. There are many others springing up around the world, both ‘crypto’ and otherwise. Many of these currencies have different ideas or themes behind them.
The Bristol Pound is a local currency from the city of Bristol. It was started to encourage people to use local products and services instead of getting them from outside. Shops can offer discounts for using Bristol Pounds, encouraging more people to use them. The money can only be used within the city, which means it keeps going round within the community instead of getting spent outside and going away.
Steemit is a social network. It works just like Twitter or Facebook, but with a difference: you actually get paid for your posts. The best or most popular posts give you some money called ‘steem’. So do your own comments and upvotes. That ‘steem’ can later be exchanged for real money, or you can use it to buy things directly.
The idea is: if you’re providing all this data for the social network, why not get paid for it?
Currencies like Ithaca Hours take this idea even further. Instead of being paid for what you do, the payment depends on how much time you spend.
In a world where many people constantly say “I don’t have enough time”, Ithaca Hours compensate you no matter what you spend your effort on. If you used up that many hours on doing something, you get paid for that many hours.
Since the first loan was given out, money has always been travelling in time. But who knew that, one day, time would start travelling in money?
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