Social money, also known as community currency, is a type of alternative currency or complementary currency used by members of a specific economic group or geographic region. Social money is intended to increase the circulation of goods and services within an economy while creating stronger ties among its members. It can be either physical notes and coins issued by non-government organizations such as local businesses, or digital tokens created using blockchain technology.
The concept behind social money is based on the idea that individuals who live in close proximity should have access to some form of tradeable value besides legal tender (fiat), which can be exchanged locally without having to deal with high transaction fees imposed by centralized payment processors. This way, people are able to use their own resources for trading goods and services amongst themselves instead of relying solely on fiat currencies whose values may fluctuate depending on external factors such as inflation rates.
Unlike traditional government-issued paper money which has no intrinsic value beyond what it represents, social money usually has a certain level of backing from tangible assets such as commodities like gold and silver; however, not all forms of community currencies are backed up by real-world assets so it’s important for users to understand how each one works before investing in them. Additionally, since most social money systems are decentralized networks built on top of distributed ledger technology like blockchain, they offer features like low cost transactions and anonymity that aren’t available with conventional financial instruments.
Ultimately whether you decide to use traditional fiat currencies or explore alternatives such as cryptocurrency or other types of digital asset depends largely upon your personal preference; however if you’re looking for ways to build stronger connections with your local economy then considering different types of social money could be beneficial.
