sid on Nostr: !! nostr:note104c9uzrz52ts0nshgn7acu9nv3ygult0v039gnank098raejartq06q6a3
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quoting note104c…q6a3I'm reading The Bitcoin Standard by Saif and want to leave my self some mental notes.
In The Bitcoin Standard, saifedean (nprofile…6g5h) explains that salability—the ease of exchanging money without losing value—is the ultimate measure of sound money. Historically, many forms of money failed because they lacked one or more dimensions of salability. Here’s how he frames the three attributes of salability, with examples of past monies that fell short:
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1. Salability Across Time (Store of Value)
⮕Attribute: Scarcity + Durability → Retains value over generations.
❌Example of Failure: Fiat Currencies (e.g., Continental Dollar, Zimbabwean Dollar)
❌Lacked Scarcity: Governments inflated supplies, destroying purchasing power. The Continental Dollar, printed excessively during the American Revolution, became nearly worthless (“not worth a Continental”).
❌Lacked Durability: Paper money degrades physically, and trust in issuers erodes over time. Hyperinflation in Zimbabwe (2008) rendered its currency unusable within months.
✅Contrast with Gold/Bitcoin: Gold’s scarcity and corrosion resistance made it salable across millennia. Bitcoin’s digital durability and fixed supply (21 million) replicate this in the modern era.
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2. Salability Across Space (Portability)
⮕Attribute: Easy to transport and transfer globally.
❌Example of Failure: Rai Stones (Yap Island)
❌These giant limestone disks were used as money on Yap but were immovable; ownership changed symbolically without physical movement. Their bulkiness made them impractical for trade beyond the island.
❌Other Examples: Gold’s weight made long-distance transport costly and risky before modern banking.
✅Contrast with Bitcoin: As digital money, Bitcoin can cross borders instantly at near-zero cost, solving the portability limitations of physical commodities.
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3. Salability Across Scale (Divisibility & Fungibility)
⮕Attribute: Can be used for transactions of any size, and units are interchangeable.
❌Example of Failure: Cattle (Ancient Barter Systems)
❌Lacked Divisibility: A cow cannot be split into smaller units for small purchases without destroying its value.
❌Lacked Fungibility: Individual animals vary in health, age, and quality, making them non-interchangeable.
❌Other Examples: Salt blocks or grain—while divisible, they often degraded (reducing fungibility) or were impractical for large transactions.
✅Contrast with Bitcoin: A single Bitcoin can be divided into 100 million satoshis, enabling microtransactions.
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Why These Failures Matter
Ammous argues that money must excel in all three dimensions of salability to function effectively. Historically, monies like Rai stones, cattle, or fiat failed because they were strong in one attribute (e.g., scarcity for Rai stones) but weak in others (portability, divisibility). Bitcoin’s innovation lies in combining scarcity, durability, portability, and divisibility, making it the first globally salable money without trade-offs.
#Bitcoin #TheNewStandard