God of Technology: Creating the Internet in Another World-Chapter 422: Everyone Just Went Crazy!

"So what do you think the dragons should use as an anchor if they issue paper currency?" The Goddess of Magic really couldn’t figure it out, so she asked.

"After analysis, to use magic power as an anchor, we’d need to at least wait until industrialization is complete. And gold, silver, copper, and other precious metals as anchors are about to be insufficient."

Ren said with a smile, "So I think the most suitable anchor is debt—people’s debt to the dragons."

"Debt?" The Goddess of Magic didn’t understand.

"Yes, debt." Ren said very definitely. "I want to change currency issuance from top-down to bottom-up."

"In the past, no matter what currency was used—shells, grain, cloth, jade, gold, silver, copper, whatever—the core was always top-down. Those in power would produce massive amounts of currency and put it into the market. But this method is gradually becoming unsuitable for the magic-tech industrial era."

"Actually, it’s not that it’s unsuitable—it’s just that the dragons don’t have that capability yet. One mistake could lead to currency oversupply and cause a series of problems. Might as well just make it passive issuance—that way problems won’t happen."

"We just need to issue a bit more at necessary times, according to my plan."

Ren paused briefly before continuing, "To make currency increase bottom-up, we actually need to make currency no longer have one or several specific physical anchors."

"Whether it’s precious metals or anything else, we abandon them all. We make the total currency supply correspond overall with the total value of tradable assets in the magic-tech industrial era."

"Simply put, we make changes in the total value of what the industrial era produces and changes in currency stay roughly stable."

"Increases in social value and increases in currency stay stable, and naturally we’ll avoid the earlier problems."

"And how do we determine this increase? The simplest method is to base it on issued loans, bonds people buy, and the total amount of other debt behaviors."

"Of course, we definitely can’t print as much as is loaned out. This involves a lot of things. For example, the printed money can only be released by purchasing government bonds from various countries or buying bonds from Dragon Bank."

"Regular people buy national bonds or apply for loans from Dragon Bank, which then triggers the money-printing institution to increase..."

For the money-printing institution to issue currency, it must do so by purchasing bonds. What constrains the money-printing institution is that any country and Dragon Bank need to store a certain amount of currency and reserves in the money-printing institution. Printing money must consider this amount.

The Goddess of Magic felt completely lost listening to this. It was way too complicated. 𝘧𝓇ℯ𝑒𝓌𝑒𝑏𝓃𝘰𝘷𝘦𝘭.𝒸ℴ𝓂

"Can the dragons really understand such a complicated currency issuance method?" The Goddess of Magic finally asked after listening to Ren go on and on.

"Getting those blockheaded dragons to understand this and execute it perfectly is naturally super difficult. But I took time to create a mechanical life form. This mechanical life form’s operating rules are the currency increase rules and following my commands."

Ren said with a laugh, "In other words, the dragons just need to cooperate with this mechanical life form."

"This mechanical life form will analyze all the data and increase currency. Unless I intervene, it’ll only proceed in the direction I envision."

"Of course, we still need to add some fuel to the fire. Otherwise, there’s no way people will accept exchanging gold, silver, and copper coins for paper currency in a short time."

Hearing Ren’s words, the Goddess of Magic was slightly stunned. She didn’t expect Ren would use this kind of method.

But she had to admit, this method was indeed very suitable.

Making currency separate from gold, silver, and copper for issuance—the biggest problem it might face was simply issuing too much and causing a series of problems.

Eventually leading to credit collapse.

And then naturally nobody would use it anymore.

But if it’s a mechanical life form doing it, as long as the operating rules are locked in from the start, there’s absolutely no way for things to go off track.

Of course, there’s one condition—Ren needs to keep watching over this. Otherwise, if something goes wrong, there’d really be nobody who could stop it.

"This method is pretty good, but how do you plan to get them to accept paper currency?"

The Goddess of Magic asked with a smile, "If there was no Dragon Online Banking, getting people to use paper currency would actually be super simple. Now people’s transaction amounts are getting bigger and bigger. They can’t drag cart after cart of gold, silver, and copper coins to trade, right? They’d naturally use paper currency."

"But the problem is, now they all have Dragon Online Banking. For these large transactions, they just transfer money directly through Dragon Online Banking."

"In this situation, how can we get them to use paper currency?"

"This is also something I’m considering. Even today, most people actually still don’t have Magic Net rings, so most transactions still rely on physical currency."

Ren thought for a moment and said, "But these people’s transactions are often small amounts—they don’t even need to use gold coins, just silver and copper coins. No, just copper coins."

"Silver coins are usually what they get when they receive their wages, and then they have to immediately break them all into copper coins. That’s the only way they can buy what they need."

"Paper currency can actually solve this problem and make their transactions easier. But the dragons’ influence here is way too small. These people simply haven’t had any contact with the dragons’ business."

"They don’t have money stored in Dragon Bank, and they can’t buy stocks and bonds. At most they’ve heard others talk about them. In this situation, can they trust Dragon Bank’s paper currency?"

"To popularize paper currency, this is both an entry point and a difficulty. I’m still thinking about it and haven’t settled on a method."

The Goddess of Magic nodded. She understood the difficulty here too, but she couldn’t think of a good solution at the moment either.

However, her thinking was different from Ren’s. She felt paper currency replacement should still be top-down. For example, have factory owners pay wages in paper currency.

At first those workers might panic and immediately rush to Dragon Bank to exchange for gold, silver, and copper coins, but as time went by, trust should be established.

Ren and the Goddess of Magic discussed their respective ideas, time passing bit by bit.

And right now, what happened in the City of Gold also appeared on the Magic Net.

The City of Gold suddenly became even bigger, and then a huge building suddenly appeared out of nowhere. This kind of miracle appearing on the Magic Net instantly caused a huge uproar.