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My mistake. I thought fungibility=spendability. Am I thinking about liquidity?
by illustrioussuit 9y ago
My mistake. I thought fungibility=spendability.
Am I thinking about liquidity?
- Bootvis 9y agoNo, liquidity is a measure of how easy and cheap an asset can be traded in the markets.
- illustrioussuit 9y agoIn economics, liquidity is often referred to as "spendability".
- Bootvis 9y agoNever seen that and when an economist says spendable income or some such he is not thinking about liquidity. Do you have a source for that?
- QML 9y agoYou're close, since fungibility affects spendability. In terms of currency, fungibility essentially means that money of the same denomination is indistinguishable. So if I had a $5 bill that I got from a marijuana dispensary, and another $5 bill that came from the Treasury, at the register both of them would be equally treated as $5. In the case of Bitcoin, fungibility is a bit harder to have since any merchant can parse the block history and find where a Bitcoin came from. Tangentially, this also relates to the notion of privacy, since if you gave me a Bitcoin, I could also find the address of your wallet, and see outgoing or processed transactions -- like, this is pretty bad if you used the same wallet to buy drugs.