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IEEE Spectrum Digs Into the Future of Money
New submitter ArmageddonLord writes "Small, out-of-pocket cash exchanges are still the stuff of everyday life. In 2010, cash transactions in the United States totaled $1.2 trillion (not including extralegal ones, of course). There will come a day, however, when you'll be able to transfer funds just by holding your cellphone next to someone else's and hitting a few keys — and this is just one of the ways we'll wean ourselves off cash. In 'The Last Days of Cash,' a special report on the future of money, we describe the various ways that technology is transforming how we pay for stuff; how it's boosting security by linking our biometric selves with our accounts; and how it's helping us achieve, at least in theory, an ancient ideal — money that cannot be counterfeited."
An untraceable method of paying for things has disadvantages, yes, but also serious advantages in limiting the power of government to see and control everything we do...
This timing of this report - how long ago was the BitCoin theft? a couple weeks? - seems a bit ill-planned.
Cash dropped when credit and debit cards became widely available and accepted. People who use cash now aren't going to stop because of some other gadget. Card use will drop (maybe; probably). You're not going to wave your cellphone over a stripper.
A lot of people are starting to pay in cash again simply to get out from under the oppressive thumb of the credit card cartel. It also helps with budgetary discipline, which is why guys like Dave Ramsey are preaching it to the people.
Taking guns away from the 99% gives the 1% 100% of the power.
Using a service-provider configured, jail-breakable device for financial transactions... Malware is already an issue on smart phones. Also, I guarantee that this "service" is not free. Everyone involved in the transaction is going to charge something. 3% to ATT or Verizon, 3% to the payer's bank, 3% to the recipient's bank, probably another 3% to some service provider/clearing house vendor, plus complete gov't visibility which means that all taxes are guaranteed to be charged. Yes, this may be simplified to the point where it's as easy as pulling $1.00 bill out of your pocket to buy your gum, but that $1.00 item is going to double in price to cover all the incidental charges. Call me a luddite, but I'm perfectly happy to stick with cash.
We often forget about the old lady factor...
Cash and checks are not going to go away any time soon. We're going to have to endure the rest of our lives with the old lady filling out the check in front of us. It's probably best to talk about half lives. It will take entire lifetimes for their use to stop and they will still be used. Or the government will phase them out and people will bitch.
...but able to be hacked might be worse. Look at the recent BitCoin incidents.
Electronic money can be untraceable like cash but you have to demand it.
almost all people with cash businesses do it for the tax benefits. accepting traceable payments mean they just increased their costs
its happening slowly but only because physical purchases like magazines at news stands are going digital and cash businesses are going out of business for lack of things to sell
So it's another article about bitcoin. Well I just wonder how this will turn out. So far it didn't die.
And I wonder if namecoin will come useful after IPv6 will be used widely. Heh, will IPv6 be used? We hope so. How would you DNS such a giant IP space? Maybe namecoin will come more handy that usual means...
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#\ @ ? Colonize Mars
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What they mean to say is that only official counterfeiters like the Federal Reserve can create new money.
The ancient ideal was realized centuries ago when precious metals were used as money. It was difficult to counterfeit. So much so that even kings and governments had to pass legal tender laws to force their subjects to accept the clipped, debased, or otherwise devalued coins.
I love Jesus, except for his foreign policy.
this has been "coming soon" for ages now and is unlikely to succeed.
1 Not EVERYBODY has a SmartPhone
2 Carriers treat this kind of thing as a MUST BE OUR VERSION thing
3 and want to get a cut of every transaction somehow (i would bet by at least making the info into a 8 step 50Kbyte per step process)
4 you need some way of transfering funds to UnKnown (and UnRecorded) persons (yeah i know anti-terror/anti-moneylaundering regs are a good thing but im talking about $50 range stuff and lower)
So what you would need to do is have The Phone Companies provide a basic FREE phone and then convince both Visa and MasterCard to agree and then sign off on a single solution (which they could ReBrand but...).
NOT GOING TO HAPPEN
Any person using FTFY or editing my postings agrees to a US$50.00 charge
Har. What, like VISA and other credit cards, debit cards, and Bitcoin?
The best they can do is lower the fraud rates. But "cannot be counterfeited" is probably an impossible standard.
The trouble with electronic transfers is when there's a mistake or fraud. For example, with debit cards, I see all too often folks get ripped off or some business over charging the person's account. While the victim is disputing the charges (the bank has 14 days to investigate), their account is being hit with withdraws of money like mortgages and whatnot. So while the bank is investigating, that same bank is hitting up the victim with overdraft fees and penalties. And since there wasn't enough money in the account to cover the mortgage, the mortgage company is also charging late fees and penalties long with every one else who the victim set up to automatically pay.
Usually the bank clears it up or if it's an accidental overcharge, the business who did it backs out the transaction and gives the person their money back.
Now all those penalties, fees and damage to the victim's credit rating because of a missed mortgage payment?
Bank, "Not our problem."
Business who over charged account, "Not our problem."
Basically you have to file a complaint with the OCC, sue the merchant and hope for the best.
And we all know about the bullshit with PayPal.
So until there are more protections for the consumer, electronic payments are a no go for me.
So does this mean that I'll beable to pay on my Credit Card with me Credit Card?
As long as illegal drugs remain a multi-billion dollar market, cash isn't going anywhere. Besides, think about what cash really is. It's just the most liquid monetary vehicle available due to government decree that everyone accept it. If the government were to do away with cash there will still be other highly liquid goods for people to trade with similar efficacy as cash.
As the ieee.org link suggests, and even helpfully illustrates, I agree your right hand would be optimally convenient for our "Biometric Wallet", to enabl^H^H^H^H^Hsimplify all buying and selling.
Or maybe your forehead, so you have a second alternative so you know you're free to choose your personal preferences.
Oh wait.
~ Whence do you come, slayer of men, or where are you going, conqueror of space?
We will soon be returning to various forms of specie as currency and sooner than you think.
I saw a demo in bangalore. You run an app in your android phone, and create a barcode to give out a small sum, small as in 1 rupee ~= 2 cents. The other guy has the same app that reads the bar code. Money gets transferred from one bank account to another.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
You know the Barter System is still a good way to do some business and non taxable :) Example - A friend did his plumbers website for a small bathroom installation.
How about anonimity? All of these changes seem to tie my money to my person. One of the good features of current cash money is that it is anonymous (in general).
.... when they can even create a web page that formats properly on Firefox?
Anyway , people have been predicting this since credit cards came along. Hasn't happened yet - its just a wet dream of various financial organisations so they can get that small fee everytime we use their device to pay and so they can track us. They don't like cash because in normal day to day life its untraceable.
How cute! I mean, who *doesn't* want their every financial transaction tracked and analyzed by the government and a few thousand corporations trying to sell you something. And of course, technology is so reliable! I'd trust my every dollar to that bastion of security, the cell phone. I mean, who wouldn't!
Excuse me, I have to go mop up some of that sarcasm that's been dripping all over the floor from somewhere.
Please do not read this sig. Thank you.
Cash is like the paper ballot -- it has some advantages that are very difficult to replicate with high tech. The advantages are in fact due to the simplicity and inefficiency of the system. The good thing is that with money, people can individually make the decision about when to switch
or do anything else the government doesn't like, you'll suddenly discover that, although you're not broke, :-(
you may as well be because you'll no longer be able to pay for anything
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fees, data cost, areas with poor signal, skimmers will have to be worked out and do want pay up to $0.0195/KB just for the data and no you can't use that local sim if you want use your cash.
because cash pays for pussy. But you slashtards here wouldn't know about that.
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Smart money will undoubtedly become too smart by half. Exploits, hacking, etc. etc.
Cash is king.
When Fascism comes to America, it will call itself Anti-Fascism, and tell you to give up your guns.
Banks are required, by law, to report any cash transaction over a certain amount (several thousand dollars, if I remember correctly) to the DEA. Yes, the DEA, not the IRS as one might have expected.
Palm trees and 8
"money that cannot be counterfeited."
lulz. Yeah, no one will figure out a way to copy bits, are attack a verification process.
Personally I can't wait to not carry cash. OTOH, this will cause retailer to incur an additional cost. And the default of 'you need to pay a fee to make a transaction' annoys me.
Maybe if you could charge retailers a fee to use the system, and it was controlled by the Federal reserve we would solve that problem.
The Kruger Dunning explains most post on
Does this mean panhandlers now need cell phones?
A lot of people are starting to pay in cash again simply to get out from under the oppressive thumb of the credit card cartel.
But you still need to get under the oppressive thumb of the debit card cartel if you ever want to buy anything online as of the present.
Dave Ramsey
There are a few places where I disagree with his advice. For one thing, he advises never to go into debt on a car but instead to buy a beater car. The trouble with a beater is that it is likely to require so much costly repair that going into debt for a certified pre-owned car becomes worth it. For another, if one never goes into debt, then how is one supposed to afford a place to live? And if a mortgage is the only exception, how is one supposed to qualify for a mortgage with no recent credit history?
Yes, if overnight they manage to extract and refine an amount of ore equal to all the metal that's currently in circulation.
All metal in circulation globally or just locally?
...money that cannot be counterfeited (except by the government).
Fixed that for you.
I do not like the way people are saying physical cash should be extinct, it's a good way to not live beyond your means, as in if you don't have the notes/coins then you can't do/buy X, especially if X is not an essential part of living.
When all your money is just numbers on a screen you feel some detachent that lessens the distinction that it's actual money being represented by those numbers, especially in the case of debt through credit cards and loans.
To do something right, you often have to roll up your sleeves and get busy.
There will come a day, however, when you'll be able to transfer funds just by holding your cellphone next to someone else's and hitting a few keys
Don't you mean:
"There will come a day, however, when passers-by will be able to transfer funds from you to them just by getting kinda near your cellphone and hitting a few keys."
I am officially gone from
http://www.getrichslowly.org/blog/2008/09/23/research-reveals-credit-cards-encourage-spending/ Good information. I like the part where McDonalds customers started spending dramatically more when they started accepting CC's. People weren't getting hungrier, they were using plastic instead of cash. ...OH, and you aren't getting ahead when you try to take advantage of companies with "same as cash" deals either (this one is easily researched...understand that when you come in WITH CASH, you get discounts right up front because you can now barter a better deal).
"... and how it's helping us achieve, at least in theory, an ancient ideal---money that cannot be counterfeited."
And money, and an economy, that is absolutely, 100% controlled by the government.
Liberty in your lifetime
Cell phone theft is on the rise. That trend will only increase if the phone becomes a substitute for cash.
In any case, I don't go along with the idea of having all my eggs in one basket. I don't care to be helpless if I lose my cell phone. Not that using a cell phone for financial transactions is an intrinsically bad idea, just that the idea needs a fair bit of refinement. And I don't think the "substitute for cash" idea is a credible starting point. There's a lot to like about cash. For one thing, it can take a lot more abuse than a cell phone can.
However, setting the cash idea aside, there are still many interesting possibilities. With a bit of work, the cell phone could become a very convenient terminal for strong three-factor authentication. It just needs a biometric scanner for the "something you are" and a unique cryptographic identity for the "something you have". Along with biometric authentication comes the ability to function as a "dead man switch", which would reduce the attractiveness of the phone as a target for theft.
It's also not hard to imagine enriching the "something you know" component so that the phone attaches different functions to different passphrases, so that for example if you're forced to unlock the phone at gunpoint, it unlocks all right but hides certain data and sends out a distress signal.
Parity: What to do when the weekend comes.
As long as there's an electronics industry, at least, there's still a market for a metal that's useful for electrical contacts that won't corrode.
Electric Engineers: Developing new ways to rip us off! The fraud possibilities make me drool.
If I used a sig over again, would anyone notice?
Of course the banks want this, especially when they are getting a cut of every single transaction in the form of comissions or service charges - a taxation privilege previously reserved for governments. And of course governments want this because it is much easier to keep track of who is making what and enforce income tax reporting better, not to mention the ease with which funds can be frozen or seized.
However I think the price both in service charges and loss of privacy are far too high. Unfortunately most people don't have much money, so they don't really care what form it takes so long as the monthly bills get paid, and I and others like me are a silent minority.
Seven puppies were harmed during the making of this post.
Money, hell -- let's rethink debt.
Debt: The First 5000 Years by David Graeber
Wikipedia doesn't go into Graeber's theory about the origin of money (coinage). In short, coins got invented as tokens representing the amount of food a soldier needs to survive for a given period of time. The army enslaves neighboring peoples, using coins to keep track of food requirements; conquered peoples are expected to provide food in return for coins. Enslaved by soldiers, people are kept enslaved by debt.
-kgj
You have apparently defined counterfeit as 'make currency without authorisation.' That is one current usage of the word, but the older and more stable definition is 'create debased money' - that is make a coin which uses less gold or silver than it should. Since all 'currency' is in effect fully debased money, that is with 0% actual monetary content, then you can see it doesnt really matter whether you have been officially licensed to counterfeit or not. Which makes quite a bit of sense. Contemplate two dollar bills, printed on the same paper, with the same ink, on plates that are identical twins to each other. What is the difference between them, that makes one worth more than the other? Some mystical essence uttered over one of them by the priests at the fed?
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Friends don't let friends enable ecmascript.
The previous method of transportation was likely a school bus and/or parents' car. This doesn't help the child get to work if the parents are also working.
Yes, it is disorganized and there is no Cash Central or Head Ham. You cannot determine how much of the cash floating around is in US or in foreign countries, how much people are packing or amount "banked" under Sealy Posturepedic. Although Federal Reserve Notes are sanctioned by the government but they don't "breakdown" like electronic systems. If Wells Fargo, BofA, Paypal, etc. servers go down, everybody goes down. Unlike if someone were to loose a suitcase full of cash, it is not going to impact others (except those owned with some cash). Of course if there is a complete breakdown of the nation, i.e. China in 1949, cash will not be of much use.
Amateur radio is decentralized, and cannot be broken like cellphone systems, trunked systems, broadcast networks. However it can be an organizational pain in the ass with all these hamsters with varying capabilities, there is no single person you can go to either stop all activities or assemble a Radio Army. There are ARES/RACES groups which they can organize a number of amateur radio operators but they only can get a small percentage of licensed hams in their area. However, at times things can be "stopped" such as squelching 440 repeaters in PAVE PAWS areas. Overvall, as long as hams got power to radios whether it be batteries, generators, or solar. They can keep right on yapping. Sorry I used this instead of a car analogy.
mfwright@batnet.com
I've had two credit card numbers stolen from me in the last two years due to companies getting hacked. But I've never been robbed in my entire life. In my experience cash is more secure.
On top of that, these electronic payment methods just add middlemen who skim money off the top and make everything more expensive. It's not good for the economy and I've stopped using credit cards for most purchases. I'm missing out on cash rewards but I just think of it like giving charity.
Before reforming cash, IEEE should open up it's paywalled papers. Seriously, IEEE sucks, they keep doing profit on the work of others, and hamper innovation.
aaaaaaa
At least not for most of us, anyway. The only use outside of exchange that I would have for a bar of gold is to use as a bookend. Gold only has intrinsic value as a raw material for people who make things from it. For everybody else, it's only value is in exchange. Consequently, it's not really different in kind than paper money.
And holds its value against inflation? For the past few years, sure. But if you bought gold at its peak in the seventies, you almost certain lost far more value than anyone lost due to inflation.
Most electronic payment systems have very short lives.
Pussy? Since when can't a pet shelter take debit cards as payment for adoption fees?
> money that cannot be counterfeited
Really? I expected a little better than that from IEEE Spectrum. That statement made me realize the article is not even worth reading.
I bought a 2000 Pontiac Bonneville for $2400 cash (taxes & registration included), I've barely had to put anything in to it. I had to save for a couple of months to get it
What did you drive while looking for a job and while saving for a couple of months?
The only disappointment with the entire deal is the bank would only give me $100's, because apparently bigger bills are only for drug dealers
$100 is the highest denomination of Federal Reserve Note that has been printed as long as I've been alive.
The government can still engage in counterfeiting.
IAAPIP - I Am A Payments Industry Professional
Everyone's working on doing this. For example, Visa is piloting a program with a small number of banks to do visa-to-visa payment. Much like Paypal, you can send money from your account to anyone else's, with a small interchange fee in between. Really, the first minute PayPal started being accepted outside eBay the entire industry was behind the curve.
The problem, of course, is supporting small payments of the sort that move between people profitably. If you consider that the major payments companies created networks in the 70s to handle real-time processing, you understand why their model has a significant overhead - they have their own internet to move all this, built before digital communication got big and computing got cheap.
So you know it's coming. As everyone wants to move to a model where they charge you for sips instead of buckets (per-song pricing RIAA, per-view pricing MPAA, per-item pricing Diablo 3...) there has to be a way to process small payments economically. And when you consider the amount of money movement that occurs between private citizens, you can see between the two a huge, untapped market. A way *will* be found.
That said, I'm not going to be a part of it myself. If personal wealth is never anything other than a bit switch in a computer in some big org, then it's trivially easy to take away or control. All other issues you could describe fall from that one truth. You can call me a Luddite, but I don't like it. Even if I'm helping to implement it.
Precious metals are very different than paper money. The only thing that gives paper money its value is the "faith and credit" of the printer. If that backing becomes non-credible, the money isn't worth the paper it's printed on. This has happened countless times throughout history.
The value of precious metals is intrinsic---a combination of their rarity and the labor/production costs. Gold has always been nearly universally accepted as a medium of exchange, along with silver.
Liberty in your lifetime
...how it's easier to hold up my phone and press a few buttons while someone else holds up their phone and presses a few buttons than it is to hand cash to someone. Tell me again, and tell me really really loudly.
The nature of a bank you see is to make their credit seem as good as cash. Spend it here, spend it there, spend it everywhere.
For example, you go to your bank and deposit $100. (It is legally a loan to the bank.)
The bank takes your $100 and notes in your account $100 of credit....
Did you see what just happened? The money supply increased. There is now $100 of cash which the bank can loan out and $100 worth of credit in your account to spend. The bank just created money out of thin air. Interestingly, not US dollars. This is just bank credit which represents dollars. By using credit to pay for things you are using a completely private money created by your bank.
This is why banks are heavily regulated compared to for example paypal, they manipulate the money supply. It's why they are orders of magnitude more dangerous than paypal no matter how much you may dislike them.
So. There are some regulations, banks have to retain a certain amount of money as reserve in case people ask for their money back. Around 10% in the US. In fact they could only loan out $90. Not what happens in reality mind you. They loan first and find reserves later in reality. You may note that this means they don't have your money in their vaults, they loaned it out. It also means that they can only ever pay back 10% of their depositors, in the event of a bank run 90% are going to lose out. It's why there are bank runs the first place, you have to be at the head of the queue to get any money back.
Now, the more people depend on credit rather than cash, the lower the reserve ratio can be pushed, and the higher the leverage can be pushed. In Europe, the reserve ratios are discretionary and in reality between 30 (3%) and 50:1 (2%). If nobody ever used cash, in theory the reserve could be 0 and the reserve ratio could be infinite... i.e. banks could create as much money as they wanted, they could leverage up as far as the eye can see.
This is the real reason for the constant push for credit cards, debit cards... Always trying to get rid of cash. Cash limits their ability to create money.
You would like to own a money tree? All a banker needs is a book of accounts and a pen. All this talk of counterfeiting is complete rubbish, banks already create far more credit money than there is cash. In fact orders of magnitude more. The UK: 30 times more. EU 50 times more. Only a tiny percentage of our money is cash by now.
Deleted
I try to make really major purchases as close to me as possible for a variety of reasons which have been discussed by a variety of people ad nauseam but which mostly boil down in the end to being able to walk into a store and shake my fist at someone if I am dissatisfied.
Do you make a point to avoid buying multi-hundred-dollar products that are sold only online? For example, would you avoid buying a Pandora, Archos 43, Nokia N810/N900, or other pocket computer solely because it isn't sold in any brick-and-mortar store near you?
what's stopping you from collecting money via Paypal
For one thing, others in my family prefer to pay me with payment methods other than PayPal, as does my employer.
then spending it again?
Nothing because I applied for a PayPal debit card accepted where major credit cards are accepted.
Does he really use the word "beater"?
I'm not familiar enough with Dave Ramsey's show to know what terminology he uses, but it's evident from Google dave ramsey beater that fans of his Total Money Makeover program do use the term "beater".
Yes, you need some guidance [...] Usually the difference is obvious to any vaguely trained eye but you can't blame people for not knowing about cars any more than you can blame them for not knowing about anything else, where do you draw the line?
I agree with you that first time car buyers especially need guidance.
One's parents are supposed to help them out
And sometimes they aren't willing to. Say someone went to school for a career in a given field, but his parents are intent on making sure that his job is in their home state, and there are no good jobs in this field in his parents' home state. This is the scenario that I've been trying to reason through with Slashdot user CronoCloud over the past several months.
The lack of understanding of what 'money' is, will destroy modern society.
Nations are imploding under it. Families are manipulated by it.
Fractional reserve banking allows bankers to multiply their 'investments' 100-fold, simply by tweaking numbers on their balance sheet.
There is a huge difference between 'credit'-based money (or money issued with interest associated to it -- either central banks to a government or a credit card to a consumer) and earnings- or asset-based money (like your checking/savings account -- where you have a stockpile and draw on it, or money backed by assets, like gold or something).
Until more people understand the basics, and want to return to 'sound' money that isn't manipulated on a whim, our society will be on a downhill slide.
For digital transactions: It's fine, as long as the numbers being floated around are backed by assets and are audited as such. I don't care if it's pieces of paper, pieces of metal, bits flying through the air.
But, at the end of the day, the more easily governments/banks can manipulate the basic monetary unit, and the more middle-men siphon off part of it (reducing profit for others), there will be far-reaching consequences.
Basic money concepts drive an economy. Either into miraculous (like the 1800s in the US) or disastrous (like the Weimer Republic) effects.
Don't steal. The government hates competition.
May I borrow your phone?
[quote]There will come a day, however, when you'll be able to transfer funds just by holding your cellphone next to someone else's and hitting a few keys — and this is just one of the ways we'll wean ourselves off cash.[/quote]I don't currently own a cell phone. I also don't WANT a cell phone. But now I'm going to have to get one, just so I can buy stuff? That sucks.
i still need cash to pay for illegal things. i dont think my weed guy is going to be rocking NFC payments anytime sooon ;)
Renting make a lot of sense if you cannot be tied to a location
In this era of increasingly specialized labor and unemployment figures quoted over areas the size of the United States, labor mobility becomes more important to the job hunt, and tying oneself to a location makes less and less sense.
You're confused.
``accepted as a medium of exchange'' == exchange value
``combination of their rarity and the labor/production costs'' != intrinsic value
Many things are rare and expensive to produce, for example, an autographed Donald Trump photograph from before the first time he declared bankruptcy. This does not mean that such has intrinsic value.
Having intrinsic value means that something has value for it's own sake. For example, shoes have intrinsic value because I can wear them as shoes. Gold does not have this kind of value unless you happen to be a capitalist that uses gold as an input to make some product.
Both of the items you mentioned have intrinsic value. Intrinsic means: Innate, inherent, inseparable from the thing itself, essential. The value of both of your objects is tightly connected to the object itself. People find these objects valuable based on what they are, not some outside authority's fiat. The value of fiat currency, however, is not intrinsic: The value is tied to the reputation of the backer, and is typically legally mandated by that backer. If that reputation goes down the drain (e.g., a nation-state collapses) or that law is repealed (e.g., "demonetization" of old currency), the fiat currency isn't worth the paper it's printed on... except, perhaps, in the distant future as "numismatic" value for collectors.
As for your distinction between "useful" objects like shoes vs. "useless" objects like a famous photograph, this is meaningless economically. Things have value simply because people want them, and are willing to trade what they have for what they want. To someone who doesn't wear shoes, those shoes of yours are equally as useless as a Trump photograph. Equally, to someone who collects photographs of celebrities, that Trump photo might be highly useful. If someone were collecting such photos and you tried to sell them a pair of shoes instead, they'd probably laugh at you and walk away.
You think one object is "useful" and another "useless." Other people's ideas of utility differ. There is no universal standard of "useful" that automatically translates into value, and that so many people think there is, and want to impose this concept onto free markets, is probably one of the biggest problems with modern economics and centrally-planned monetary policy.
Liberty in your lifetime
You're still confused.
Let's roll with your suggestion that intrinsic value exists because people value a thing for what it is. If this is what intrinsic value, then gold is no different than paper money. People want both for what it is, money. The vast majority of people working for money don't really care if they get paid in paper dollars vs. gold coins. For them, it spends the same. It has the same value. People want it. They do crazy things to get it. Some people want it so much that they rack up far more of it than they could even hope to spend in their lifetimes.
It is only if we separate that someone values a thing for whatever reason from the value that a thing has as what it is that the idea that intrinsic value makes sense. So the autographed picture of Donald Trump has a very low, if any, intrinsic value even though there may be some people that want it very much and are willing to pay top dollar for it. As an object, it just does not have much value in and of itself.
Exchange value, however, depends very much on people valuing a certain item. Exchange value is very much why people want money and, outside of certain industries such as jewelry making and electronics manufacturing, why people want gold. For the most part, gold only has inherent value to people who use it as a raw material to make other things. For most us, gold has little to no inherent value. It only has exchange value.
Aristotle is the first author known to have explicitly made this distinction. And this distinction has been used in most economic theories ever since.