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RE: Down The Rabbit Hole: Do Me A Favour

in #money7 years ago (edited)

Nice coincidence this article of yours. I was just thinking about the concept of money. It seems to me that the purest definition of money is "anything that works as a medium of exchange". Both metal money and a shared ledger fill that definition. Some observations:

  • Metal money is more difficult to counterfeit than a ledger, as long as it is rare metal. That was probably the strongest argument for metal money. The "intrinsic" value isn't the important thing.
  • A ledger could only be in one place at a time. Metal money could be used in complete disconnection from everything.
  • Metal money or cash is actually just real-time bookkeeping without a trace. DAG-based cryptocurrencies resemble cash in this regard.
  • A ledger would allow more divisible units of account compared to metal money.
  • Cryptocurrencies combine the best parts of both a ledger and metal money: It can't be counterfeited, it's divisible, the ledger is replicated everywhere.

Popular definitions of money tend to include "store of value" and "unit of account". I think they are just beneficial side-effects, but not entirely necessary. Of course a money that has the best properties becomes the most popular, which is why money tends to have these attributes also.

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Wow, really thought provoking!