Energy as Currency

Money currently is represented in every country today by a "fiat" currency, which has no value backing it (other than the perceived value of the country's economy in the aggregate. ).

But money represents a medium of exchange and a store of value. Most of us receive money (in some form) for work we do, so in a real sense money represents a measure of work or energy.

What if we actually started using actual energy credits (kwH) as a form of currency ? These could be traded between countries in lieu of dollars. We already do this in effect when we buy a barrel of oil.

The barrel of oil represents a certain amount of dollars and it's intrinsically valuable because of the energy content in it and what it can produce.

Now what is interesting is that the energy content of a barrel of oil is more or less fixed through time, assuming we are talking about the same grade. The internal revenue service defines 1 barrel of crude oil (BOE) as equal to 5.8 × 10^6 BTU.[1]. This energy content would be the same today and 100 years from now.

This is not true of a dollar or any other fiat currency. Fiat currencies tend to lose value over time and eventually become worthless.

Could we actually start trading a currency as units of energy ?

At today's prices, a barrel of oil is about $40.00, or 5.8 x 10^6 BTU. So an hour's worth of work (at $40/hr) is equivalent to 5.8x10^6 BTU.

Imagine instead of trading dollars for yen or some other currency we all traded goods and services based on a guaranteed supply of energy.

Footnotes