Poemander

With the currency component of money gaining momentum, the wealth component shall dwindle and become largely unreliable. The wealth is inevitably moving towards the shorter-term instruments causing assets volatility and frequented redistribution, still contained within the elite, but more often than earlier, escaping the circle in a rather haphazard manner. Generational wealth too is undergoing not only the economical but also the moral crisis. It almost causes a chaos where no one has clear idea about the values and disproportional bias so grand that the perversion becomes an absolute normal. The preservation of wealth will no longer be achievable by old trusted methods and those holding on certainty of capital assets will see values vanish in front of their eyes. Under these conditions the grassroots of fresh redefined values will start to appear.

One thing to understand here is that the 'asset investment' is ceding to 'throughput investment' because productivity moves from the asset heavy to the high throughput models. Meaning that the economic rent is no longer a parti pri to the quality of a particular type of asset, but instead, repositions itself as a direct derivative of the actual usage and the consumption. In other words, where the value used to be found in the input-output ends of the system, now the tendency is increasingly getting zoomed in the actual processing and convertibility. This evolves under condition where the input-output relationship becomes loose and at some point even immaterial, whereas the usage or the throughput of the system swells. If it sounds counterintuitive, consider the ontological aspect of such transformation: with the growing understanding of interconnectivity (social and biological ecology, networking, iot), the means and the ends blur themselves out into the infinite web of interrelations, so it gets almost impossible to quantify individual inputs and outputs, leave alone work out the ratios and make of them any economical sense. Integrated Reporting initiative is only the beginning of such realization. Eventually the means and the ends will have to be taken care of by the algorithm based on some current global understanding of an all-inclusive system; therefore, there will be left little to no room for maneuver to individual entities, who frankly will find no commercial sense in connecting the dots and would rather focus on the 'digestion' of flows within the system. Thus the value will have to move into the design of conduits and the convertibility of flows.

Concomitantly there is a looming shift in owning/renting paradigm. With the majority of transactions and dealings, projection time-scales as well as overall mentality moving towards short-term, the premise of long-term ownership will not stand same prevalent. Equally the increased divisibility of assets supported by viability of micro payments, tokenization and decentralized titles registry, shall propagate micro ownership of any asset from real estate to any appliance or service. Eventually this will not be uncommon owning say 0.1% of the house or owning share in the particular model of computers instead of owning the stock in a computer company. You may even stake an ownership on services, say particular haircuts provided by the hairdresser mentioned in the earlier example. The main theme though is the decoupling of ownership from the usage. You may be owning various assets or fractions of assets and not using it, while the ones you are using are not actually owned by you. Say the house you live in is not owned by you, but by numerous people who invested in it individually or as a group. You may as well invest in this house while still paying rent (often you wouldn't because you want to pay lesser rent while invest in a higher yield) and receive back the portion of return to set against your rent or perhaps each time increasing your portion of ownership in the house. Also, the title is transferred gradually as your ownership percentage increases. Instead of ubiquitous monthly or weekly intervals, the frequency of payments, supplemented by technology and near zero transaction costs, can approach almost perfect continuity alongside the automatic adjustment of a title record. Simultaneity of payment with the title transfer on goods or the consumption of services shall almost completely eliminate the counter-party risks and the need for extending credit/advancing payment. The just in time method of managing inventories now becomes also applicable to the receivables and payables. This effectively means freeing up the larger portion of working capital which can then be applied elsewhere. On the longer end of yield curve this means a transition from the debt based to a rent based economic model. Coming back to the example with buying a house, the gradual increase in ownership also means the total price is now averaged out across the number of years, thus spreading the settlement alongside the actual period of usage. Initially such arrangement can be viewed as contributing to risks and price uncertainty; however, the more products are structured this way the more stability will be driven on the back of saturation and market efficiency. Eventually, removing the price-value asymmetries associated with betting based on price forecasts, and effectively tying the prices to actual usage and systemic expansion.

Bringing the above scenarios together we have began outlining the path of value transition. The preposterous role of money as yardstick and a unit of account will further diminish leaving us to question the standard of quantifiable values. The monopolistic and centralized, the so called reserve currency, or the basket thereof will struggle to maintain such status due to inherent abstractness of the underlying debt instruments. Whereas the liability-free (non-enforceable) currencies and commodities do lack elasticity to nimbly adjust to the supply-demand dynamics (they hardly can or would without inheriting the very same flaws of fiat). The eventual solution and pretty much a natural consequence will be an adoption of the actual throughput as a value standard, i.e. tying the standard measurement to actual activity and usage rather than promise of a future settlement. In a similar fashion as we measure electricity usage based on number of lightbulbs on at a given time and their effective kw/h rather than estimated lifespan and power rating of a bulb. Estimation is a craft of using time factor as a plasticine, the product of which always prone to manipulation and misinterpretation. So are any of the central bank monetary policies targeting any sort of preservation of purchasing power. The purchasing power of a fiat (and any tradable currency) is dependent on at least three interconnected variables: the balance of trades, the velocity of money and the present value of the underlining debt instruments. The third variable is inherently nonobjective, and the longer is the maturity of debt, the higher is the weighted factor of the variable. In the case of commodity money and/or precious metals the third variable is so broad and presently unenforceable (debt relates to the longitivtiy and fertility of Earth as place of human habitat) that we effectively assume commodities to be liability-free. In them, mainly the first two variables are responsible for determining value. Not surprisingly, we are familiar with the connotation of gold being a better store of value throughout centuries when compared to promissory notes. Digital assets are somewhat similar to commodity money, except that the liability relates to the functionality of virtual ecosystem. Such liability too is presently unquantifiable and thus unenforceable, thus we may consider cryptocurrencies (generalized case) to be liability-free. One other difference between commodities and cryptocurrencies is the technological advantage to potentially increase the velocity (second variable) of the later to near infinity. This effectively means that the second variable can completely outweigh the first and the third and so become the sole base measure of its purchasing power. Such interpretation comes as close as possibly imaginable to our understanding of throughput-based valuation model.

The lightbulb flickers so fast that the light appears to be constant, effectively eliminating the perception of time as periodicity. Similar tendency is now becoming apparent and this lightbulb effect is strobing away the dark time-dependency of value guesswork and replacing it with the brightness of real-time independence while transforming money and value as we know it