5 ms·

Where then, would you draw the line between a currency and a non-currency asset?

azernik 9y ago
Liquidity, probably - how fast can you exchange how much of it. Though I do personally think there's a lot more to a currency than that.
stephengillie 9y ago
Everything is a currency, if you barter hard enough.
- librvf 9y ago
  Barter is, by definition, an exchange of goods without using money. In other words if you have to barter to get rid of it, it's not currency.
librvf 9y ago
When it hits all of: Acceptability Durability Divisibility Stability Portability (Elasticity) If you can't spend it easily, it's not a (functioning) currency. If it spoils or decays within your lifetime it's not a currency. If it's not something you can divide in order to make payments of a more-or-less arbitrary amount, it's not a currency. If you can't predict how much of the asset you will need to pay your bills next month, it's not a currency If you can't bring it with you to the place where the exchange takes place, it's not a currency. If you can't obtain capital investment in a currency because the currency itself is more valuable than anything you could produce, then it's not a (good long term) currency. This last one is in parens because it one only matters in a growing economy. A deflationary currency can still otherwise function as a viable medium of exchange, but eventually, lack of availability for new entrants will mean that entrepreneurs will begin looking to do business in alternate currencies.
- blueprint 9y ago
  Are you missing fungibility or is that covered?
  - librvf 9y ago
    Missed it. In my mind I think I lumped it in with divisibility, which is related but not quite the same thing.
    - blueprint 9y ago
      Nice. In that case, I wonder if you've ever heard of Monero? :)
- cesarb 9y ago
  > If you can't predict how much of the asset you will need to pay your bills next month, it's not a currency Back in the hyperinflation days, we couldn't predict how many Cr$ we would need to pay our bills in the next month. That didn't keep it from being a currency.
  - librvf 9y ago
    That period did not last. Yes, if you try hard enough and look narrowly enough you can find exceptions to any of these rules, but it holds as a general guideline. If hyperinflation had continued indefinitely, it's probable some other commodity would have supplanted it as a de facto currency.

Liquidity, probably - how fast can you exchange how much of it. Though I do personally think there's a lot more to a currency than that.

stephengillie 9y ago

Everything is a currency, if you barter hard enough.

librvf 9y ago
Barter is, by definition, an exchange of goods without using money. In other words if you have to barter to get rid of it, it's not currency.

librvf 9y ago

When it hits all of: Acceptability Durability Divisibility Stability Portability (Elasticity) If you can't spend it easily, it's not a (functioning) currency. If it spoils or decays within your lifetime it's not a currency. If it's not something you can divide in order to make payments of a more-or-less arbitrary amount, it's not a currency. If you can't predict how much of the asset you will need to pay your bills next month, it's not a currency If you can't bring it with you to the place where the exchange takes place, it's not a currency. If you can't obtain capital investment in a currency because the currency itself is more valuable than anything you could produce, then it's not a (good long term) currency. This last one is in parens because it one only matters in a growing economy. A deflationary currency can still otherwise function as a viable medium of exchange, but eventually, lack of availability for new entrants will mean that entrepreneurs will begin looking to do business in alternate currencies.

blueprint 9y ago
Are you missing fungibility or is that covered?
- librvf 9y ago
  Missed it. In my mind I think I lumped it in with divisibility, which is related but not quite the same thing.
  - blueprint 9y ago
    Nice. In that case, I wonder if you've ever heard of Monero? :)
cesarb 9y ago
> If you can't predict how much of the asset you will need to pay your bills next month, it's not a currency Back in the hyperinflation days, we couldn't predict how many Cr$ we would need to pay our bills in the next month. That didn't keep it from being a currency.
- librvf 9y ago
  That period did not last. Yes, if you try hard enough and look narrowly enough you can find exceptions to any of these rules, but it holds as a general guideline. If hyperinflation had continued indefinitely, it's probable some other commodity would have supplanted it as a de facto currency.