I would add to all of this that my assertion that fiat currencies tend to exist in a "modern" economy is fundamentally flawed. Our method of borrowing and lending is unsustainable. Only commodity backed currencies are sustainable. It could have happened in 2008, but it will happen in 2030 or 2050 that the debt spiral will bring the whole system crashing down. It only persists because people can make individual fortunes from it and governments understand the hardship that will follow the crash, so put it off by quantitative easing (printing more non-existent money). Honestly, the only sensible way to run a long term economy is with commodity backed currency- but that is by-the-by. The current system will fail. Conclusion: An advanced economy is actually more likely to have commodity backed currency. But it will be organised and protected against counterfeiting.
So counterfeiting would be illegal. The currency is valuable because the government says it's valuable, not because there's anything special about the currency itself? I'm with @Pinkymcfiddle, thinking we may be talking past each other. I'm Canadian. In Canadian history, beaver pelts used to be used as currency. You want a sackful of dried cod? Great, that's two beaver pelts. A well-trained mule? That's four pelts, everybody knows that! Whatever. Anyone who could trap a beaver and tan its hide could create their own "currency". Totally legal. Not a centralized currency system, just a system based on the intrinsic value of pelts. But today we use paper money and metal coins. The paper (plastic?) itself is worth hardly anything, but the currency has value because our government says it has value. Or we don't use paper or metal at all, we just click on a computer screen or make a credit card transaction and the digital equivalent of the paper and metal is transferred. There's usually a middle step in between, in which the government stockpiles something (generally gold) and issues currency as a sort of promissory note against the government stock. It's a pain to carry gold around, so here's a piece of paper, issued by the government, that you could, if you ever wanted to, exchange for a certain value of gold at our vaults. But why would you want to? You trust us, don't you? So, the question is... what kind of government are you dealing with? A near-anarchy system, like back in the beaver-pelt days? A system where the government provides currency as promissory notes that can be exchanged for something of intrinsic value, like gold? Or a modern system in which currency is based on belief... belief that the economy of the country is strong enough for the currency to be worth what the government says it's worth? These are big questions that will tell us a lot about the world you're working with. The shape of the coins? Yeah, that's kinda cool. But what's behind it?
While I admit that handcrafted stones as currency would be pretty cool, the entire idea is ludicrous. Currency cannot be created. That's the whole point of it. Gold can't be spun out of straw and promissory notes (or stones) can't be issued and declared legal tender by any institution except a government that can guarantee their value. What you're describing with the stones is a simple object of value. They're like diamond rings, artwork, or Canadian beaver pelts. Yes, they're valuable. And, yes, they can be exchanged for goods and services as if they were currency, but that doesn't make them legal tender. If they were, the entire pursuit of wealth in your world would be reduced to the acquisition of money stone "material" and craftsmen that can render it. I understand where you're going with this, and I applaud the creativity, but making this idea work isn't worth it. Just my two cents, but if you're going to tumble down a plot hole, this one ain't it. It needs too much explanation, and the more you try to justify a plot hole the more attention gets drawn to it.
Hi Lisa Simpson, legal tender implies an overarching society. How do you think barter occurred before an over-arching government? Currency grew by degrees, and it started by exchanging goods of equal value, before that value was imposed upon one single commodity of equal value for ease. That commodity was gold formed into coins. Only in the early 20th century did bankers replace a coin with intrinsic value for a valueless piece of worthless shit so they could rip us all off. The vast majority of human history had a very sensible currency based on a value that could be measured against a finite and immutable commodity (gold). A stone that is carved in such a way by discrete and isolated craftsman could be both finite and immutable, if no-one else has the ability to repeat the design, couldn't it?
Sure it could. I'm just having trouble picturing the dragon equivalent of a federal mint "printing" these meticulously carved immutable stones fast enough. I like the idea of the stones as a cool thing of value, but as a monetary currency? Like nickels and dimes and tens and twenties that everyone carries and buys things with? I don't know. I'd think you need a shitload of these stones. Too many to be hand carved unless you have a thousand dragons working a thousand chisels around the clock. And the whole point of paper money over gold coins is that the material is inherently worthless, so if the dragons have to carve enough stones to create "money," wouldn't they need a fairly commonplace rock? I'm thinking the material these stones are carved from would have to be as rare as gold in order to be valuable. I like the idea but am having trouble buying the mechanics behind it.
I don't think that's entirely true - we dropped the gold standard because it just wasn't working any more. Fiat currency only has the value we all agree it has, true - but that's just as true of gold. I'd imagine as societies advance they're more likely to turn to fiat rather than away from it. That said, I don't think we know the relative level of advancement of the OP's society. Shifting to fiat was relatively recent for us, so it's fully possible that wouldn't yet have happened for the dragons, depending on where you'd put their society against an equivalent human timescale.
You cherry-picked mate, full quote: - I would add to all of this that my assertion that fiat currencies tend to exist in a "modern" economy is fundamentally flawed. Our method of borrowing and lending is unsustainable. Only commodity backed currencies are sustainable. It could have happened in 2008, but it will happen in 2030 or 2050 that the debt spiral will bring the whole system crashing down. It only persists because people can make individual fortunes from it and governments understand the hardship that will follow the crash, so put it off by quantitative easing (printing more non-existent money). Honestly, the only sensible way to run a long term economy is with commodity backed currency- but that is by-the-by. The current system will fail. Conclusion: An advanced economy is actually more likely to have commodity backed currency. But it will be organised and protected against counterfeiting.
I did, because that was the relevant bit. I think it should be fairly obvious when I say something like 'we dropped the gold standard because it just wasn't working any more' I also disagree with the rest of what you said, particularly: Not convinced this is really the place for that discussion, though. The relative merits of commodity-based or fiat currency don't have a huge impact on the OP's problem. What might have an impact is whether they're using fiat currency or not - so what kind of currency an advanced society might use could matter.
Probably not, but we all know that only a 10% reserve is required, and once the remaining 90% of cash is circulated several times, it means that dept can be many, many, many times greater than GDP. We all realise that is unsustainable right? If we don't we really need to read up on it, right?
I don't think it's inherently more unsustainable than any other currency system we've come up with so far. However, still not convinced this is the place for this discussion. If you fancy opening up a thread about it, we can get into it (though maybe in a few days, I'm meant to be catching up on a contract just now rather than procrastinating, and getting into an economics discussion won't help that) - but for this thread, it feels like a derail.
Honestly, it's up to you. I've worked in the industry, I don't need the debate- it has already left me tired. Carry on with the work that matters.
Some thoughts on a currency, based on semi-precious stones for dragons: - You could let them mine for a specific stone - You could make it that the different treatment of the stone (with fire, or whatever) makes for a) hardness/ability to cut it and b) weight - Based on that Dragons would have to fly, carrying weight, light-weight material would be a lot more valuable than heavier ones - That means that the bigger 'denominations' would be the light-weight stones, because they are worth more. Just my two cents.
Though I would normally be of the opinion that something like the money these people use is not going to be so big a feature as to warrant all this, a small of example from my latest reading: I just finished Storm Constantin's Wreaththu series for the umpteenth time. In the last book we follow Calanthe in his adventures from Megalithica (North America) to Almagabra (parts of Europe), and Jaddayoth (the area around the Black Sea). Money gets mentioned quite a bit as he trades and buys his way into and out of adventures and trouble. It's all the same money, called spinners. It did seem kind of a stretch that people living in what they themselves still refer to as tribes (Man has fallen, Wreaththu has risen in his place) would all be making use of a monetary system that remains stable across such a vast area. I guess it's one of those things that, as a reader, I engage differently as it becomes more prevalent in the story. Mention it a couple of times and I'm not likely to think about it too deeply. Make it an intrinsic part of the plot - like how Cal manages to finance his adventures - then yeah, I'm going to start wondering how this economy is shaped and did the writer really put any thought into this.
In the Pern books, the author had a system of "marks", coins that were issued by different guilds or lords or whatever as a token that could be exchanged for goods from that guild or estate, but that had clearly become much more universalized and standardized, so you could use a smith mark to buy something from the leather workers guild, or whatever. It's been twenty years at least since I read a Pern book, but I can still remember that detail because it told me so much about how their society was structured. What the marks were made out of? I assume metal, maybe, but... I don't really know. That detail didn't stick with me. But the overall idea obviously did.
The light novel series Spice & Wolf has a very intricate fantasy economy structure, and the main character is a merchant who has to navigate it. It's actually a really good example of the inner workings of commodity markets and currency exchange--especially in the first three volumes--not just in a fantasy setting, but in general as well.
How can a dragon society manage an economy at all? Do these beasts work and pay taxes or something? The whole reason an economy exists is because people want things. And that's it. Humans are pretty complex creatures. The most, in fact. As an animal, we're also pretty weak, physically, compared to most other animals, pound for pound. The idea is that humans have more nerve cells than muscle cells, which allow us to do highly precise things with ease. With all that precision, complexity comes naturally. For a dragon to have the same degree of appreciation for the finer things in life, they're going to have to drop a lot of that muscle strength. And that means they're going to be smaller, too. But these are dragons. And as such, you can claim license to change all of that. Personally, I would expect them to have an entirely different means of conducting commerce. Consider bitcoins. Those are just numbers. How about dragons that use orchestrated symbols, like signs that can be manipulated similar to math, as tender?
I'm still not able to accept a currency that (1) isn't backed by some organization AND (2) doesn't have an inherent value outside the context of currency. Even "pretty" isn't doing it for me, unless that prettiness is used for jewelry or other ornamentation AND is tied to substantial rarity.
Yes. What is your dragon's economy based on, @rktho ? If you are using some intrinsically valuable thing like 'gold' as a coin, then it's not much use in and of itself, because it's not going to be used for anything. It's just going to be passed around as an exchange mechanism. So its intrinsic value is more or less negated. If you're using actual practical goods as an exchange mechanism ...I'll give you a gallon of milk for half a dozen eggs (a barter system)... then the items exchanged are going to actually be used. But a gold coin will simply be passed on. It's just a symbol of something. But what? Stones? Stones are everywhere. And if they have no intrinsic value, and they can be easily crafted into particular shapes, they're not going to be impressive as currency because anybody can just go out and whack a few stones with a chisel and hammer. If they represent something else (like coins do) then you'll need to come up with an economic system to give them something to represent. And also come up with a way to prevent them being counterfeited.
If it is a civilization with VERY law-abiding citizens - you know, the kind that is convinced that very bad things happen when you don't follow the rules - you can replace the organization by the belief. Maybe these stones have been made since the dawn of this species, so by now there are a lot of them, but they are regarded as somewhat sacred, so nobody would use them irresponsibly. Nobody would dare forging money. Maybe one dragon makes one stone in their lifetime or something. Maybe the stone is like the surety for this dragon's contribution to the wealth of the entire society. (So you only get more stones aka. more money if the amount of available goods also grows.) If you are able to make your stone, you are a fully skilled adult and you will both contribute to society and are also allowed to buy now. Go, buy something with your stone. If you make a thing that is valuable and desired by others, they will give you other stones for it. Problem: Everything that is consumed, like food. But maybe the dragons live extractory. They don't buy food, they simply catch a wild bovine? I suppose there are lots of flaws in this system. I am not an economist, so it could be rubbish.
The tally stick method might be useful. Find some way to carve notches into the stone and then bang it in half. Tally sticks worked quite well over here in England even tho pieces of wood could be found everywhere. In fact, if my memory serves me well, a £25k tally stick was used to purchase some of the original shares in the Bank of England when it was founded.
From what I'm reading, the tally sticks represented value, they weren't treated as being inherently valuable. They sound a little like the marks described by Bayview--valuable because some party has agreed to their value and there is some fairly reliable mechanism of exchanging the item for goods. I'm editing my post because for some reason I read it as supporting the idea of these not-backed-by-anyone coins. But you never really said that. The tally sticks seem like a perfectly plausible idea, but they would need someone's backing. Editing yet again to add: The stone piece wouldn't get its value from "Ooh, pretty!" but from, "Here's one-tenth of a stone that Joe the Dragon promised to redeem with fifty chickens. So how much flour will you give me for something that's worth five chickens?" It also appears that the impossibility of breaking another stick to precisely match the break in the tally stick served as a guard agains counterfeiting. So the availability of wood to make more tally sticks wasn't an issue.
On (1), I don't think it's a stretch if this dragon society has figured out a way to do it differently from human society. Ditto on (2), provided we don't project humanity onto dragonkind. They are a different species, after all.
But currency is a human concept. If we're going to call it "currency" then it should in some way resemble currency.
