Would a Currency Backed by joules work?

Question

In my world I have a large group of people (like a city-state/states) that have their economy based on joules (as in energy). the setting on Mars, 50 years after society collapsed and the major planetary infrastructure ground to a halt. no major power stations, no industry or anything else left working.

Most People on the planet are living rough hard lives trying to survive back on basic skills, doing things by hand. The city-state has so far been able to maintain an almost pre-collapse way of living. they still have luxuries like AC, Clean/Hot water, local archive of the internet, tvs,computers, games, future vr, refrigerators, androids and all those other modern conveyances people like to have. the citizens of the city-state are both enthralled by tech and most of them are unable to cope without it. the city also uses power for things like the defense systems and the system to supply all the things the citizenry want.

All of that stuff requires power to keep running. at the heart of the city is a fusion reactor but they have a very limited fuel supply for it. The reactor runs on metallic hydrogen but the knowledge and equipment to manufacturer more was lost during the collapse.

Outside of the city-state there is still a large number of different vehicles, tools, computer systems, weapons, and doodads that run on electricity that can be scavenged. people will find all kinds of different salvage in the ruins and take it to the city to sell/ trade for other more worth while stuff they need. Among some of the items people find are these portable super-batteries that are about the size of a 2 liter soda bottle. these batteries, while not unlimited, are able to reach every high energy density's and store large amounts of power.

right after the collapse the city still had a large number of these fully charged batteries on hand but within a few years the supply was used and more power had to be found. as such the techno city-states economies are based on the acquiring and usage of energy. as people find more of these batteries or other means of producing power they usually take it to the city to trade. to be in the city is to be consuming power, so everyday each person is taxed a set amount of joules to be there. these taxes are collected by the Cneteral Bank to store them for the city government till the power is used. the CB is also able to give out ellectrum coinage instead of actual joules transfered to a battery.

each ellectrum is worth a set amount of joules stored in the CB batteries and at any given time the ellectrum can be exchanged for its value in joules. while the ellectrum isn't the only currency outside the city, it is one of the most recognized as a stable currency. with that stability it has gain value even far outside the city as you can always find somebody that will take it.

Here is an example. Jim goes an combs thru a ruined house and he manages to find a 12-pack of D batteries and a microwave oven. near one of those item do Jim any good as what he really needs is some food and other supplies. jim takes his loot to a near by market and trades the microwave and 10 of the batteries for 100 BS bucks and a nice flash light that takes a couple D batteries. off he goes deeper into the market.

Now the trader Sam travels for a few days and comes to the city where he trades the microwave for a few hundred ellectrum. Sam then takes the mostly full pack of batteries to an exchange to be converted to joules. well that pack of batteries is worth 216 kilo-joules. the exchange takes their cut and transfers 200 kilo-joules into Sam Battery. now a 200 kilo joules richer Sam can afford to spend a night or 2 in town at a hotel, maybe take a shower, see a movie, rent an escort bot, and go buy more stuff in the city to trade to other people outside. but once Sam Leaves the city most of those joules of power wont be very useful directly, so Sam stops by the CB and exchanges 50 kilo-joules for the equivalent amount of ellectrum to use later.

My question specifically is, would this economy function at all? I'm assuming it would work like a gold-standard economy and im trying to figure out if the mechanic are good as I want to use it in a game.

Answer 1

An energy based currency has been proposed first by Thomas Edison and then by Henry Ford. There are reasons why it would not quite work in our economy, the energy production increases (has been increasing) more rapidly than the growth of the economy and the energy prices fluctuate a lot - this would introduce a significant inflation and instability. However, in a small, (quasi) steady state economy, especially if electricity production is vital (which it would be in a colony on Mars).

This had been even tried in our past for non-electricity energy.

However, trading physical batteries or lumps of coal is so... primitive. I imagine power companies would issue scrip entitling the bearer certain amount of electricity; this could be freely tradeable, companies would pay their employees with the scrip, people would pay with the scrip for their amenities, companies producing goods or services would charge their energy budget plus some tidy profit.This assumes market economy, but the same would work in command economy (where the power generation is controlled by the state) or basic income economy (where the amount of basic income is calculated in whatever energy is expendable by the government) as well.

Eventually, after the economy improves, the value of the scrip would be decoupled from the energy itself and the energy would become just another (tradeable) commodity with free floating market prices.

Answer 2

A value holder is valuable if not just everybody can create it.

See Bitcoins, for example. If I could write a script and credit 10K bitcoins on my account out of nowhere, bitcoins would be as worth as fridges at the North Pole. Same for notes. They are trusted as value holder as they cannot be printed by any Average Joe with his printer.

Well, energy is something than anybody can produce. "Darn, I need 100 Joule to pay the rent, that nasty landlord is going to come in few hours! Let me throw down from that skyscraper some furnitures from the offices."

Answer 3

A non fiat currency backed by a standard such as the kilowatt hour would function however such an economy would be at more risk from instability.

Answer 4

Currency is a medium of trade. So that when you want a Ducky Mo Mo and someone else wants a baby rattle, you just buy them. As such the ideal value of a currency is zero.

Electricity could work as a currency but it’s really terrible at it you don’t actually want a currency that people consume.