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I have a world where there are no fossil fuel deposits. This means that biofuels - fuels artificially created out of biological matter, rather than via geological processes - are the sole hydrocarbons in this world, taking the place of substances such as coal, oil, natural gas, and the like.

Let's say that there's a nation within this world which wants to back its currency with its biofuel reserves. Is backing up a currency with biofuels a viable, functional alternative to backing a currency with things such as gold or governmental promises?

When answering, please take the following into account:

  • Provided that you have a biosphere (which, hopefully, you do), the supply never runs out; overuse might lead to a dip in reserves, but, provided that you have arable land, you can always grow more plants to turn into fuel. This means that biofuels are constantly created, unlike fossil fuels, which form on geological timescales and therefore will functionally run out eventually. As such, currencies backed by biofuels are more stable than currencies backed by fossil fuels because fossil fuels will never run out (at least, provided that civilization doesn't collapse, but in that case you have bigger things to worry about).

  • Biofuels are always being consumed, at least as long as the demand exists to do so. After all, they're constantly burnt, vaporized, and released into the atmosphere.

  • Biofuels are semi-independent of geography, in that they can be produced in any place capable of growing crops. Fossil fuels, on the other hand, are only found in certain places. You cannot "grow" crude oil in, say Hawaii, or "grow" gold in Florida, but you can grow sugar cane in those places and turn that into biodiesel.

KEY_ABRADE
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    We have previously had separate questions on the viability of using as currency: electricity, bullets, honey, donuts, salt and water. (Do a quick search on the tag "currency".) Suggest that you look at the question about bullets first, although the one advantage that biofuels have over bullets is divisibility https://worldbuilding.stackexchange.com/questions/80543/could-a-society-use-bullets-as-money – KerrAvon2055 Feb 06 '22 at 03:47
  • Please edit the question to explain what it the intended meaning of the phrase "back a currency with ". The actual meaning. There are no currencies in this world, and there have never been any, backed by fossil fuels. (For a very long time, currencies had intrinsic value such as gold or silver or copper and needed no backing up with anything. Then, for a very short time, some very few countries used paper currency backed by , usually backed by land, real estate. This experiment failed badly. Nowadays no currency is backed by anything.) – AlexP Feb 06 '22 at 06:16
  • Gold became a common medium of exchange because it was --among other properties-- 1) Storable (chemically stable), 2) Difficult to add to the supply (scarce), and 3) Easy to test for counterfeiting or adulteration (thanks to simple, cheap touchstones). Folks are more likely to choose a medium of exchange with those properties than without. – user535733 Feb 06 '22 at 13:57

1 Answers1

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The value of biofuels will fluctuate because of its use as fuel, and supply and demand.

There is no particular use for a dollar except as money. There is no particular use for gold except as money. But there is a use for biofuel aside from proposed value as money: its use as biofuel.

Suppose I want to charge 10 biofuels for my custom dancing pants (that would look great on you, Key!). That is fine. But now the weather is cold. People are burning their biofuel to keep warm. Biofuel is in demand as fuel! You only want to pay 5 biofuel for the pants. The value of biofuel is up.

Now the summer comes. You gladly pay me 10 biofuel for the pants. I want to buy chickens. But the chicken guy now wants 20 biofuel for the chickens. Biofuel is worth less.

Then people who want biofuel start collecting poop and leaves and roadkill and they make biofuel out of it. The value of biofuel well and truly tanks. Anyone can make the stuff and people are.

What you have is a barter system where the value of traded items each fluctuates according to supply and demand.

If you want a consumable to back your currency it would be better to use something where the supply is really pretty fixed - maybe refined uranium. Best though would be a nonconsumable that had worth only as money.

More here: Ideas for practical post-apocalyptic currency 100 years from now

Willk
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  • “There is no particular use for gold except as money.” Electronics: am I a joke to you? – Topcode Feb 06 '22 at 01:28
  • @Topcode Somehow I knew someone would put something about this. Yes electronics. Also capitol domes and dental work. – Willk Feb 06 '22 at 01:33
  • If you knew someone would say something about it why didn’t you just put it in the answer. – Topcode Feb 06 '22 at 01:37
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    @Topcode - I wanted you to feel like you are contributing! – Willk Feb 06 '22 at 01:47
  • Don't forget jewelry. It uses about 48% of the gold demand currently. It is typical for geek guys to overlook jewelry but it does have its uses in mating rituals. – David R Feb 06 '22 at 15:01