@m0r4h3u5 @jp_koning @GeorgeSelgin This is an okay article that morphs into a bitcoin advert. For that reason, I did not leave a "like" or comment with the article.
Definitions of money are too simplified-don't sufficiently separate the utility functions: medium of exchange, unit of account, store of value +
Definitions of money are too simplified-don't sufficiently separate the utility functions: medium of exchange, unit of account, store of value +
@m0r4h3u5 @jp_koning @GeorgeSelgin 2/n
These 3 functions contain some internal conflicts that are all too frequently talked around. Such discussions can become circuitous.
Bottom line: money used today is anything accepted as a medium of exchange. As your article points out, it's most commonly fiat money. +
These 3 functions contain some internal conflicts that are all too frequently talked around. Such discussions can become circuitous.
Bottom line: money used today is anything accepted as a medium of exchange. As your article points out, it's most commonly fiat money. +
@m0r4h3u5 @jp_koning @GeorgeSelgin 3/n
The "unit of account" is almost totally redundant with "medium of exchange". The second cannot occur effectively across a large economy without the first (except for barter). The "store of value" property conflicts with "medium of exchange". +
The "unit of account" is almost totally redundant with "medium of exchange". The second cannot occur effectively across a large economy without the first (except for barter). The "store of value" property conflicts with "medium of exchange". +
@m0r4h3u5 @jp_koning @GeorgeSelgin 4/n
This conflict arises because the value of different "things" varies over time. An acre of land in Manhattan has value much greater today than a century or 2 ago, while an acre of land in rural New York may not have changed value (in $) much over the same time. +
This conflict arises because the value of different "things" varies over time. An acre of land in Manhattan has value much greater today than a century or 2 ago, while an acre of land in rural New York may not have changed value (in $) much over the same time. +
@m0r4h3u5 @jp_koning @GeorgeSelgin 5/n
Commodities rise and fall in relative value and in $ terms over time. Which acre or which commodity represents that best "store of value"?
This can be determined for the past but for the future the determination is a function of both acumen and luck. +
Commodities rise and fall in relative value and in $ terms over time. Which acre or which commodity represents that best "store of value"?
This can be determined for the past but for the future the determination is a function of both acumen and luck. +
@m0r4h3u5 @jp_koning @GeorgeSelgin 6/n
So if the $ is a medium of exchange it's "absolute value" will necessarily change over time depending on the items being exchanged.
Thus the idea that a "medium of exchange" can be a "store of value" is, at its core, a fallacy. +
So if the $ is a medium of exchange it's "absolute value" will necessarily change over time depending on the items being exchanged.
Thus the idea that a "medium of exchange" can be a "store of value" is, at its core, a fallacy. +
@m0r4h3u5 @jp_koning @GeorgeSelgin 7/7
A "store of value" will be a physical thing or a personal skill and not a "unit of account" or a "medium of exchange". The "value stored" will be a function of what is selected for "storage".
-End-
A "store of value" will be a physical thing or a personal skill and not a "unit of account" or a "medium of exchange". The "value stored" will be a function of what is selected for "storage".
-End-
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