How does money gain value? Why would £100 from 100 years ago be worth more now?
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Everyone’s answering the question you didn’t ask. I’ll answer the one you did ask.
For money to gain value it would have to become more rare or more demanded.
So you could either keep the same amount of money and increase the number of people who want it and things they want it for, or you would reduce the amount of available money and keep everything else the same.
The US, for example, just tripled the amount of dollars available … which makes a dollar worth about a third of what it was worth before. (Or it will soon enough).
To make it more valuable – as you might like – you would do the opposite. You would “burn” two thirds of the available money instead, making it thrice as valuable.
Why don’t governments do this? Because if the value of money is going up, it makes more sense to save it, not spend it. If your $1,000 buys you one iPhone today but will buy you three iPhones next year… maybe you’d rather wait.
But then if everybody waits, Apple won’t make the iPhones in the first place cos no-one’s buying them. So then no-one has a job at Apple any more cos they have nothing to do. Spread this around the whole economy and no-one’s earning any money, and there’s nothing to buy.
Well then, if there’s nothing to buy, does money really have much value any more? What use is a million dollars if you’re in a desert with no shops nearby?
So, in your effort to make the money gain value, you’ve actually made it less useful… and thus less valuable. Woops!
So really the way to make money more valuable is to make it so it can do more stuff. Like Money MkII.
This is where cryptocurrency comes in.
Bitcoin has fallen into the trap of becoming useless because no-one wants to *use* it, and instead everyone wants to just hold onto it until it’s “more valuable”. Which will probably kill Bitcoin at some point.
Other cryptos (specifically “cryptocurrencies” which not all cryptos are) are in the Money MkII category and are trying to become more valuable by becoming more useful.
For example, imagine a money that tracked all your spending, did your accounts for you and paid your taxes with one click at the end of the year. Would you rather use that one than those troublesome dollars? If you would, then that crypto just went up in value for you.
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