why people think fiat is some kind of bank note i cant figure.. its mostly digits on a banks computer.. i would guess that only a tiny fraction of whats in circulation is in the form of paper..
i dont know how typical i am but its very very rare for me to spend paper money.. its all plastic and paypal for me.. i even buy my crypto with visa plastic..
Money is not infinitely created. The supply is limited and controlled by the state that governs the currency. And you're right in the guess that only a small portion of money is in a form of paper. In XXI century we need a lot more money than we need cash.
So the concept is pretty simple and is called in a straightforward manner: "money creation".
In the basic model: the central bank provides some amount of cash and sets a so called "reserve requirement" - the amount of that cash each commercial bank has to keep in relation to deposits it has. So naturally, the amount of money circulating the economy is a multiplication of the actually existing cash.
When you hear that your state is "printing money" it's very unlikely that some actual paper colouring takes place. Usually it's just the money policy (e.g. the reserve requirement) that is changed, so that banks can lend a bit more.
The ideal currency would be something whose value is absolute...like how we base meter off of the speed of light in a vacuum or Kelvin scale off of absolute zero. I don't think such a thing exists because supply and demand always comes into play. Fiat based off a relatively stable economy (like USA) is far more stable than cryptocurrencies. It's not ideal but it's the best option right now.
Not really.
Money is not just a thing you exchange for goods. It's not just means of payment. It's also an important concept in economy. And to some extent it is important that particular states can control their currencies (their value relative to other state currencies).
So while it would be very convenient to have a global payment method - like credits in computer games, it would also have serious effects on the economies, on state competitiveness, on people well being all over the planet.
Even real money is pretty much digital to most users ,vis PayPal , Google n apple are all going to shut your banks down by being easier and better for most then your country's crypto will be your only way to pay.
Your largest mistake is that you think digital money is disconnected from the fiat state currencies. You seem to think that Google and PayPal use some different kind USD than Bank of America does. But it's the same thing.
And while you're right that Google is taking a bit of bank profits by offering a competing payment system, it's actually helping the banks, not harming them. That's because cash becomes obsolete. It's easier, cheaper and more convenient to have "electronic money". And the greatest target for each bank is to convince you to deposit your money.
Banks make little to no profit on transfers (most of the fees goes to other institutions).
Banks earn money by investing the deposits they have. So the more money bank has, the more it can earn.
The next time you're pulling cash out of ATM, think about the (usually high) fee you're paying for this. It's not for keeping the ATM operational. It's not for the guys that move cash around in armoured trucks. What you're actually paying for is taking money out of banking network. So between the moment you cash out and someone else puts it back into a bank account, a portion of money is not being invested. It just lies in your pocket, doing nothing.
