Alternate Forms of Money

The Form of Money

In the looming eventuality beyond Legal Tender, commodities will always be front runners as dominant forms of money. As mentioned in Money Defined, which commodity transforms into or out of the category of ‘money’ is a Darwinian selection process determined by the Market. Precious metals always have, and always will, have roles as forms of money, as do most other commodities.

With that said, there is one commodity that is recent in the history of humans, and that’s electricity. Electricity is now a primary societal need; its importance is obvious. To not have electricity is, and would be, severely disruptive.

The intrinsic value of an electrical unit, measured in kilowatt-hours (kWh), is uniform and measurable. One root of all comparative valuation could be a kilowatt-hour, kWh. A 100 Watt light bulb on for 10 hours is 1 kWh. The relationship of a kilowatt-hour with its energy source would become primary societal knowledge.

Oil, natural gas, coal, nuclear, and hydro are the predominate sources of energy used in the generation of electricity. Solar, wind, bio, and storage are rapidly emerging energy sources. To ‘save money’ would be to save electricity; perhaps enough to rapidly eliminate the need for carbon-based generation.

The utility industry is currently undergoing an enormous change. The old utility model has large concentrated facilities to generate electricity (coal, nuclear, natural gas) and distributes that electricity through the grid, a one way flow. The new emerging model has many electrical sources of generation (solar, wind, bio, storage), which tend to be smaller in generation and more geographically dispersed.

The challenge is to create macro and micro grids that can integrate all the energy technologies, balance generation with demand, be dependent and resilient, and bill appropriately. In essence, the grid becomes a clearinghouse for kWh exchange, an electrical form of money, comparative with all other forms of money.

The logistical details of how an actual transaction occurs using the kWh as a form of money becomes the project deliverable. It takes a lot of people to operate and maintain the grid, and they have needs like everyone else, the basis of trade with others, the Market.