Grand Unified Monetary Theory

[benjamindees]

Aristotle laid out his qualities of good money as follows:

• Durability
• Portability
• Divisibility
• Consistency
• Intrinsic Value

Those are all fine and well.  But they are all specific, physical qualities, which only provide for the aspects we truly value in money.  So what are these, more general aspects that Aristotle's qualities provide?

• Durability
  
  • Protection against loss
• Portability
  
  • Ease of transport
  • Protection against theft
• Divisibility
  
  • Ease of exchange (liquidity)
• Consistency
  
  • Protection against counterfeit
• Intrinsic Value
  
  • Protection against market failure

So, by induction, these are the major aspects that any good money should have:

• Protection against loss
• Ease of transport
• Protection against theft
• Ease of exchange (liquidity)
• Protection against counterfeit
• Protection against market failure

How, then, does Bitcoin provide for these fundamental aspects?

• Protection against loss
  
  • As digital information, Bitcoins can be copied and backed-up in multiple places at once.
• Ease of transport
  
  • Bitcoins can be transferred across the globe within minutes via the internet.
• Protection against theft
  
  • Bitcoins can have extremely high value-density, and can be protected with wallet passwords and multiple signatures.
• Ease of exchange (liquidity)
  
  • The 21 million Bitcoins can currently be divided into 2.1 quadrillion Satoshis, and theoretically near-infinitely.
• Protection against counterfeit
  
  • As a 128-bit ECDSA key pair, a Bitcoin key is nearly impossible to counterfeit; and this protection can be extended if this ever changes.
• Protection against market failure
  
  • The Bitcoin network is the largest supercomputer in existence, and would require either 51% control of this network, or extensive, coordinated internet failure to break.

[1714192573]

1714192573

[1714192573]

1714192573

[pretendo]

I don't think you are using market failure in the appropriate sense. And intrinsic value isn't necessary, it just has to have consensus value. Nothing has intrinsic value, it is just what people agree is valuable.

[benjamindees]

In the economic sense, a "failed" market is a less-than-perfectly-functional market.  Obviously Bitcoin does not provide perfect protection against market failure.  It cannot regulate externalities the same way governments do, for instance.  But it is competitive, is relatively information-transparent, is resistant to external threats, operates with a minimum of both public goods and middle-men, and enables rational self-government, which is one of the best defenses against externalities.

As a medium of exchange, Bitcoin is probably the medium most resistant to market failure in the history of money.

[hashman]

Airstotle eh, can you give more info on this reference?  Thanks  

[bobitza]

Where is scarcity? Or in other words, a limited quantity and being hard to get more.

[benjamindees]

Airstotle eh, can you give more info on this reference?  Thanks  

Oops, I mean to quote this.  I got it from this article, but the reference seems to trace back to Schumpeter's History of Economic Analysis, pp 59.

Where is scarcity? Or in other words, a limited quantity and being hard to get more.

This fourth point brings up the point of scarcity, which is in essence a matter of intrinsic value.

I see scarcity as being contained within protections against counterfeit and market failure.

[bobitza]

I see scarcity as being contained within protections against counterfeit and market failure.

I don't.

The same article says

Paper currencies only derive their "value" from what is known as legal tender laws, which are in essence a threat of legal prosecution, and or force, if they are not accepted as money for payment.  ... The governments that sponsor them have essentially unlimited power in their ability to create new supplies.

When using Bitcoin or gold/silver as currency, you don't have unlimited supply even if your life depends on it. Because of the algorithm, miners need to do the work to get new coins and same thing goes for gold coins; someone has to actually go, dig, process and mint the metal into coins.

[pretendo]

In the economic sense, a "failed" market is a less-than-perfectly-functional market. 

No, in an economic sense, a market failure is a situation that leads to less than optimal results due to the shortcomings of the concept of a market itself. Naturally these situations are very rare, but include things like pollution and other externalities. On an economics board, you'd do well to use the jargon properly.

[herzmeister]

Grand Unified Monetary Theory? That would be the essence of money:

Money is information. That's all it is. Who owes what to whom.

The perfect money is neither inflationary, nor deflationary, it is not scarce, nor is it abundant, it just is.

Any monetary approach up to date cannot reach this perfection. All have to make compromises.

A gold coin or bitcoin is just a user interface to money. A tool. That's all it is. A tool to store and transport this information.

Ideally, money would be invisible. Like any great tool that's not in the way of your workflow. Imagine a giant, all-knowing computer system that tracks all transactions and economic activity. If you tell it you want that car, it can tell you exactly how many more days you'll have to work in your current job to earn it.

Of course, such a computer system would be quite dystopian. Bitcoin is information money too, but compromises to enable better privacy by emulating a scarce commodity.

[mobodick]

So what are these, more general aspects that Aristotle's qualities provide?

• Durability
  
  • Protection against loss
• Portability
  
  • Ease of transport
  • Protection against theft
• Divisibility
  
  • Ease of exchange (liquidity)
• Consistency
  
  • Protection against counterfeit
• Intrinsic Value
  
  • Protection against market failure

Durability has to do with a currency in use and is not about loss protection. It's more about expiration. Like when the orange you traded for a brick starts to mold or the ink on your $10 bill starts running. It is about the destruction of the currency, not generally about losing it  (dropped wallet on the street, wiped bitcoin wallet).
Portability has nothing to do with protection agains theft. It is about how easy it is to have it on you and use it.
Divisibility is not about liquidity or ease of exchange, it about the possibility to use fractions of the currency.
Consistency is not about counterfeiting, it is about fungibility. That 1 unit of currency has the same value everywere and can be swapped for any other one unit of currency.
Intrinsic value is not about protection against market failure, it is about the various effects that intrinsic value has.

I think you should just make your own new list instead of shoehorning them into aristotles set of ideas.
Demand for properties of a monetary system do change you know.

[benjamindees]

Durability has to do with a currency in use and is not about loss protection. It's more about expiration. Like when the orange you traded for a brick starts to mold or the ink on your $10 bill starts running.

Okay... still sounds like loss to me.  Are you generally concerned about others destroying their Bitcoins, and the effect it has on you or "the currency"?  If so, why?

Portability has nothing to do with protection agains theft. It is about how easy it is to have it on you and use it.

And what about currencies that were not really portable at all?  Were they just bad money, or perhaps is portability not a specific requirement?

Divisibility is not about liquidity or ease of exchange, it about the possibility to use fractions of the currency.

Is there some other reason, besides liquidity or ease of exchange, that you would want to use fractions of a currency?

Intrinsic value is not about protection against market failure, it is about the various effects that intrinsic value has.

Such as?

I think you should just make your own new list instead of shoehorning them into aristotles set of ideas.
Demand for properties of a monetary system do change you know.

I am not "shoehorning" anything.  I am expanding upon and generalizing Aristotle's ideas.  I tried to make this clear.
And, no, general truths do not change.  That's the entire point of seeking them out, of studying philosophy, economics, of science even.

Money is information. That's all it is. Who owes what to whom.

So, what does my owning a Bitcoin tell me about who owes what to me?  How about a dollar?

I agree that money is information.  But it isn't information about debt.  It is information about supply and demand of scarce resources.

The perfect money is neither inflationary, nor deflationary, it is not scarce, nor is it abundant, it just is.

Yes, I agree with this.

In the economic sense, a "failed" market is a less-than-perfectly-functional market.

No, in an economic sense, a market failure is a situation that leads to less than optimal results due to the shortcomings of the concept of a market itself. Naturally these situations are very rare, but include things like pollution and other externalities. On an economics board, you'd do well to use the jargon properly.

Frankly, given the rather spectacular inconsistencies in the multiple schools of modern economic thought, I think I'd prefer to use words based on their regular, English meanings.  And since I'm making more of a philosophical, rather than economic, assertion, perhaps you can just pretend that "market failure" has a more generic meaning than the technical meaning you might usually proscribe to it?

If not, well, then here's my argument.  I disagree that "market failure" is a natural consequence of "shortcomings of the concept of a market itself."  I think, rather, that it is a natural consequence of something else, force and fraud, intentional harm, ie. crime.  In my view, calling this "market failure" is a complete abuse of the language, newspeak even.

Let's say we decide to meet at the coffee shop to exchange Bitcoins for fiat, and you decide to rob me of my fiat instead.  Would you call that a failure of the market for Bitcoins?  No.  That's crime, something "the market" doesn't even pretend to protect against.  Since we were in a coffee shop when the crime occurred, is it a failure of the coffee shop to protect against crime?  No.  The "concept of a coffee shop" doesn't include "protection against crime" any more than the concept of a market does.  It's a failure of something else, morality, government, individuals, society perhaps, but not "the market" or "the coffee shop".

So, I'd prefer to use the term "market failure" to mean exactly what it says, failure of the market, rather than failure of the concept of a market to be so expansive as to include every possible human action.  If I'm going to posit a "concept of a market" at all, it would be a complete fool's errand to try to make it dependent upon all the stars in the universe aligning in order for it to function properly and not be deemed a "failure".

That's why I tend to view the concept of a "market" as one of voluntary exchange in good faith between reasonably self-interested individuals, rather than some mystical all-encompassing pseudo-religion capable of solving all human problems.  Externalities can and should be relegated to some other mechanism, the justice system or similar, since I also disagree with your assertion that externalities are "very rare".  But that's for another post.

[herzmeister]

So, what does my owning a Bitcoin tell me about who owes what to me?  How about a dollar?

I said it already. Bitcoin would be just a user interface to money. A tool. That's all it is. A tool to store and transport this information. It's an UI instead of the OS. Many n00bs confuse these two things.  

You're right, owning a Bitcoin doesn't tell you anything about these things. That's why it is not perfect money, as I said. As soon you resort to such a commodity, you've already lost a great deal the accuracy and efficiency that the all-knowing computer-system has.

Gold would be just a commodity like any other in such a system. Same with Bitcoin as a digital commodity, it may or may not still find some purpose.

[Etlase2]

No offense benjamin, but your post does reek of shoehorning bitcoin sound bytes into the "grand unified theory". Like, for example, the concept of intrinsic value is dubious enough as it is, then you somehow manage to attribute this value arising from a viable attack on the network.

[mobodick]

Durability has to do with a currency in use and is not about loss protection. It's more about expiration. Like when the orange you traded for a brick starts to mold or the ink on your $10 bill starts running.

Okay... still sounds like loss to me.  Are you generally concerned about others destroying their Bitcoins, and the effect it has on you or "the currency"?  If so, why?

I am not concerned, this is your list.
To me, the term 'loss' would include things like theft and i'm sure that was not the direction that Aristotle was heading with this.

Portability has nothing to do with protection agains theft. It is about how easy it is to have it on you and use it.

And what about currencies that were not really portable at all?  Were they just bad money, or perhaps is portability not a specific requirement?

He WAS indeed talking about practicality and in his eyes these big coins were bad money as they would not flow easily through society.
It has nothing specific to do with theft, it applies to all uses of the currency.

Divisibility is not about liquidity or ease of exchange, it about the possibility to use fractions of the currency.

Is there some other reason, besides liquidity or ease of exchange, that you would want to use fractions of a currency?

It allows for a smooth change in price.
Today a chicken is worth 1 coin.
Tomorrow, a chicken costs 0.97 coin.
How will you pay for this chicken if the coin is not divisible into, say, cents?
Again, this is about the practical use of the currency.
Things like liquidity and ease of exchange are related to the widespreadidness of the currency and are not dictated by it's divisibility.
And to become widespread it is essential that the currency be practical in several ways, according to aristotle.
And divisibility makes the currency more practical.

Intrinsic value is not about protection against market failure, it is about the various effects that intrinsic value has.

Such as?

Such as that even if the market collapses you are left with something (the physical part of the currency) that has some value of its own.

People tend to trust such currency easier and are more eager to use such a currency.
This actually adds to liquidity and ease of exchange.

I think you should just make your own new list instead of shoehorning them into aristotles set of ideas.
Demand for properties of a monetary system do change you know.

I am not "shoehorning" anything.  I am expanding upon and generalizing Aristotle's ideas.  I tried to make this clear.
And, no, general truths do not change.  That's the entire point of seeking them out, of studying philosophy, economics, of science even.

Yes you are. You're desperately trying to distill things you think are important now from things written by aristotle.
What you do wrong is that you only consider his points without considering the direction of those points.
So i still think that you should make a list based on what is needed now instead of trying to find a way to transform these old ideas because now is a completely different situation than aristotles times.

[Mageant]

I don't think you are using market failure in the appropriate sense. And intrinsic value isn't necessary, it just has to have consensus value. Nothing has intrinsic value, it is just what people agree is valuable.

I think with instrinsic value it is meant that you can use the "money" for itself even if nobody will trade you for it.
For example, wheat has been used as money in ancient times. If nodobdy would trade your wheat you could always eat it yourself. Thus wheat as money always has a minimum intrinsic value.
Gold also has an intrinsic value. You can use it to make jewelry or electronics.

I'm not sure if Bitcoin has an intrinsic value. At the most basic level Bitcoin is a system of recording and sending unique tokens over the Internet. So it does have a core usefulness, more useful than small slips of paper with ink on them. Still, you can't really do anything with those tokens other than trade them.

[mobodick]

I don't think you are using market failure in the appropriate sense. And intrinsic value isn't necessary, it just has to have consensus value. Nothing has intrinsic value, it is just what people agree is valuable.

I think with instrinsic value it is meant that you can use the "money" for itself even if nobody will trade you for it.
For example, wheat has been used as money in ancient times. If nodobdy would trade your wheat you could always eat it yourself. Thus wheat as money always has a minimum intrinsic value.
Gold also has an intrinsic value. You can use it to make jewelry or electronics.

I'm not sure if Bitcoin has an intrinsic value. At the most basic level Bitcoin is a system of recording and sending unique tokens over the Internet. So it does have a core usefulness, more useful than small slips of paper with ink on them. Still, you can't really do anything with those tokens other than trade them.

I disagree.
When market value plummets and only the intrinsic value is left, i'd rather have a milion paper slips then a milion bitcoins.
For one, you can isolate your house with paper slips.
You can also burn them for heat.

[bobitza]

I think with instrinsic value it is meant that you can use the "money" for itself even if nobody will trade you for it.
For example, wheat has been used as money in ancient times. If nodobdy would trade your wheat you could always eat it yourself. ...

I disagree.
When market value plummets and only the intrinsic value is left, i'd rather have a milion paper slips then a milion bitcoins.
For one, you can isolate your house with paper slips. You can also burn them for heat.

Or you can wipe your a$$ for a couple of months, although not sure if they're that comfortable.

Anyways, I completely agree with Mageant definition of intrinsic value.

The interesting thing is that the intrinsic value is usually waaaay lower than the face value, therefore does it really matter? In case of a complete crash you could wipe your a$$ with your stash of $100 bills but compared with what they could have bought before the crash. Is it any comfort in having that "option"?

Same thing with Bitcoins ... they have 0 value if no more electricity or system crashed but even if I could get something out of them it, the intrinsic value would be insignificant compared to face value.

Intrinsic value? Meh, whatever ...

[Roger_Murdock]

I don't think that "intrinsic" value (i.e. a non-monetary use) is a requirement for a good currency.  It was probably important to the evolution of money, i.e. it's hard to imagine the first money not having "intrinsic" value.  And it was also important traditionally as a way to ensure scarcity (which is what really matters).  Paper notes have very little "intrinsic" value, but if they were backed by a scarce commodity like gold, that would (theoretically) operate as a constraint on the power of the issuer to debase the currency by printing ever-increasing quantities.   But you don't really care if money has a non-monetary use. In fact, having a non-monetary use almost seems inefficient, because when the commodity is being used as money it's less likely to be put to its other uses. Imagine how much cheaper gold would be for electronics applications and jewelry if there were no monetary demand driving up its price. I'm sort of making the same argument I made about whether good money should be tangible:

Why should we apologize for the fact that Bitcoin is intangible (in the sense that it's non-corporeal)? That's a huge advantage. Until we invent cheap and reliable teleportation, you can't spend corporeal things at a distance. Sorry goldbugs, but gold is not particularly well-suited for the information age. Corporealness was never important in and of itself. It was simply the price you had to pay to eliminate counter-party risk. Until now.

Having "intrinsic" value (which basically just implies that money is a commodity rather than fiat) was another one of the "prices" we had to pay to eliminate counter-party risk, but Bitcoin manages to eliminate it without paying that price. Gavin Andresen stated that Bitcoin was "almost the Platonic ideal of money." And I agree. Money is really just information. It's a way of keeping score of who has produced but not yet consumed and about the relative scarcity of particular resources, etc.  

So not only is Bitcoin "real money," it's the realest money yet.

[mobodick]

I don't think that "intrinsic" value (i.e. a non-monetary use) is a requirement for a good currency.  It was probably important to the evolution of money, i.e. it's hard to imagine the first money not having "intrinsic" value.  

I think you're quit right here.
I would like to add that in times where there was no global economy the intrinsic value of stuff like gold made it more universal.
You could always find people that valued gold and you could do that completely without regard of any face value the gold seems to carry.

[pretendo]

Intrinsic value in currencies has the benefit of preventing inflationary policies from destroying it for political purposes

[Etlase2]

Having "intrinsic" value (which basically just implies that money is a commodity rather than fiat) was another one of the "prices" we had to pay to eliminate counter-party risk, but Bitcoin manages to eliminate it without paying that price.

The intrinsic value of gold doesn't "cost" you anything to use it as currency, it's included in the value in trade. If you want to talk about the cost of mining it, you can hardly disassociate that from bitcoin. And if you imply government is a counter-party to every transaction with fiat, surely the "early adopters" are as well.

[Roger_Murdock]

Having "intrinsic" value (which basically just implies that money is a commodity rather than fiat) was another one of the "prices" we had to pay to eliminate counter-party risk, but Bitcoin manages to eliminate it without paying that price.

The intrinsic value of gold doesn't "cost" you anything to use it as currency, it's included in the value in trade. If you want to talk about the cost of mining it, you can hardly disassociate that from bitcoin. And if you imply government is a counter-party to every transaction with fiat, surely the "early adopters" are as well.

I mean that it's a "cost" in the sense that you traditionally had to use something with intrinsic value (i.e. a commodity) in order to guarantee scarcity despite the fact that the commodity might lack other features that make for a good money. I'm not sure what you mean about "early adopters" creating counter-party risk.  If you accept fiat in exchange for goods and services, you have to worry about the issuer cranking up the printing presses (thereby siphoning value away from your money).  If you accept Bitcoins, you don't have to worry about "early adopters" just giving themselves more coins because they can't do that.

[Etlase2]

I mean that it's a "cost" in the sense that you traditionally had to use something with intrinsic value (i.e. a commodity) in order to guarantee scarcity despite the fact that the commodity might lack other features that make for a good money.

Ah, that is much more clear then and I agree with you.

I'm not sure what you mean about "early adopters" creating counter-party risk.  If you accept fiat in exchange for goods and services, you have to worry about the issuer cranking up the printing presses (thereby siphoning value away from your money).  If you accept Bitcoins, you don't have to worry about "early adopters" just giving themselves more coins because they can't do that.

You do have to worry about them crashing the market and dissolving any idea of bitcoin actually being a store of wealth though. The end result is no different from cranking up the printing presses. And at least politicians are somewhat accountable for monetary problems--admittedly to a very small degree--but bitcoin users are accountable to no one.

[Richy_T]

He WAS indeed talking about practicality and in his eyes these big coins were bad money as they would not flow easily through society.
It has nothing specific to do with theft, it applies to all uses of the currency.

IMO, these stones were not the currency, it was the knowledge of who owns them that is the currency. Not really much different than gold-backed notes (which do, indeed have their own issues).

[Richy_T]

Gold also has an intrinsic value. You can use it to make jewelry or electronics.

I can make jewelry from macaroni too.

[BobbyJo]

Golds value does not stem from how useful it is.  It comes from the confidence people have in it.  This is why in a crisis the value of Gold shoots up!

[Richy_T]

Golds value does not stem from how useful it is.  It comes from the confidence people have in it.  This is why in a crisis the value of Gold shoots up!

Just because gold doesn't have much intrinsic value doesn't mean it doesn't have value as a fairly stable storage of wealth. Of course, if there's a bubble (and I believe there is) and it bursts pretty badly, all bets are off.

[BobbyJo]

That depends.  Bubble or no bubble, Gold is internationally recognised as a safe haven when the economy tanks and its tanking right now as bad if not worse than the thirtys, so I dont think youll see a serious drop in the gold price (long term) for the next 5-10 years!!

[mobodick]

He WAS indeed talking about practicality and in his eyes these big coins were bad money as they would not flow easily through society.
It has nothing specific to do with theft, it applies to all uses of the currency.

IMO, these stones were not the currency, it was the knowledge of who owns them that is the currency. Not really much different than gold-backed notes (which do, indeed have their own issues).

Well, if it was the knowledge of the possession that was the currency then that makes the currency super portable and thus practical.
So that would be exactly what he ment by portability. Stones would be impractical to use as a currency and would prevent it from being used widely in everyday life.

[Richy_T]

Well, if it was the knowledge of the possession that was the currency then that makes the currency super portable and thus practical.
So that would be exactly what he ment by portability. Stones would be impractical to use as a currency and would prevent it from being used widely in everyday life.

Yes. It was my understanding that the posting of the picture of the stone coins was made as a counter to the portability requirement. The stones themselves were red-herrings (which actually would possibly be portable enough to be used as currency but would probably violate the previously undisclosed "must not smell of fish" requirement).

[BitcoinNational]

Grand Unified Monetary Theory? That would be the essence of money:
Money is information. That's all it is. Who owes what to whom.

ARISTOT-cratic MONEY

• Durability - metal or info store Value over time, data integretity over time
• Portability - REGISTRY transport, ONLINE transfer
• Divisibility - fractional base unit

• Protection against market failure -  there is nosuch thing, trust/faith/belief that market is True & Fair & Transparent
• Intrinsic Value - there is nosuch thing, value is set at market spot discovery
• Protection against loss- cross investments/hedge
• Protection against theft - crypto encoded
• Ease of exchange (liquidity) - market goods /money changers /security options

The 21 million Bitcoins can currently be divided into 2.1 quadrillion Satoshis, and theoretically near-infinitely.

• 21,xxx,xxx Bitcoins

1==$11

• 21x,xxx,xxx dimeBitcoins

2==$1.10

• 2,1xx,,xxx,xxx centBitcoins

3==$0.11

• 21,xxx,xxx,xxx microBitcoins

4==$0.01 ... 3 microBitcoins per EARTHLING

• 21x,xxx,xxx,xxx

5==$0.001 ... 30 microBitcoins per EARTHLING

• 2,1xx,xxx,xxx,xxx

6==$0.0001 ... 300 microBitcoins per EARTHLING

• 21,xxx,xxx,xxx,xxx 100,000mB/BTC

7==$0.000.01 ... 3000 microBitcoins per EARTHLING

• 21x,xxx,xxx,xxx,xxx million/BTC

8==$0.000.001 ... 30000 microBitcoins per EARTHLING

• 2,1xx,xxx,xxx,xxx,xxx 10million/BTC

9==$0.000.000.1 ... 300,000 Satoshis?? per EARTHLING ... translation ... 3000.00 mean balance // 100.00 per day $FLOW

Protection against counterfeit

• As a 128-bit ECDSA key pair, a Bitcoin key is nearly impossible to counterfeit; and this protection can be extended if this ever changes.

Protection against accounting failure

• The Bitcoin network is the largest supercomputer in existence, and would require either 51% control of this network, or extensive, coordinated internet failure to break.

[/list]

[Richy_T]

• Divisibility - fractional base unit

This one makes no sense to me. You just define the base unit as the minimal fractional base unit (so the cent instead of the dollar etc). If your currency is infinitely sub-divisible then it's pretty much a null statement.

In short, your currency is either infinitely divisible or it's not.

[mobodick]

• Divisibility - fractional base unit

This one makes no sense to me. You just define the base unit as the minimal fractional base unit (so the cent instead of the dollar etc). If your currency is infinitely sub-divisible then it's pretty much a null statement.

In short, your currency is either infinitely divisible or it's not.

You keep forgetting that these rules are about practicality.
Bitcoin is far more finely dividable than any currency ever in existance.
There is no requirement for divisibility beyond usability.

[Richy_T]

• Divisibility - fractional base unit

This one makes no sense to me. You just define the base unit as the minimal fractional base unit (so the cent instead of the dollar etc). If your currency is infinitely sub-divisible then it's pretty much a null statement.

In short, your currency is either infinitely divisible or it's not.

You keep forgetting that these rules are about practicality.
Bitcoin is far more finely dividable than any currency ever in existance.
There is no requirement for divisibility beyond usability.

It's probably more about the wording than the implementation. "Fractional base unit" seems to imply things that are irrelevant to the point. I get the idea, I just think it should be worded differently.

Let's say for a second that The Satoshi was the base unit and not the BTC and that the bitcoin protocol was immutable such that it could not be more finely divided. The Satoshi is still such a small unit (currently) that it would be a useful currency. Alternately, let's say the dollar deflated massively (lol) such that a dollar would buy you a mansion. There is still the fractional base unit of a cent but what could you use to buy a loaf of bread?

The requirement should probably be "Fine gradations of value" or something similar.

[mobodick]

• Divisibility - fractional base unit

This one makes no sense to me. You just define the base unit as the minimal fractional base unit (so the cent instead of the dollar etc). If your currency is infinitely sub-divisible then it's pretty much a null statement.

In short, your currency is either infinitely divisible or it's not.

You keep forgetting that these rules are about practicality.
Bitcoin is far more finely dividable than any currency ever in existance.
There is no requirement for divisibility beyond usability.

It's probably more about the wording than the implementation. "Fractional base unit" seems to imply things that are irrelevant to the point. I get the idea, I just think it should be worded differently.

Let's say for a second that The Satoshi was the base unit and not the BTC and that the bitcoin protocol was immutable such that it could not be more finely divided. The Satoshi is still such a small unit (currently) that it would be a useful currency. Alternately, let's say the dollar deflated massively (lol) such that a dollar would buy you a mansion. There is still the fractional base unit of a cent but what could you use to buy a loaf of bread?

The requirement should probably be "Fine gradations of value" or something similar.

Well, you can divide a cent into still smaller units.
And in fact this has often happened in the past.
The only requirement is that it is sufficiently divisable to be usefull.
You should see the word 'divisable' from your own point of view. Is the currency divisable enough for you to use it in the current economy.
It is not nessesary that it is finely grained (like bitcoin).

[Richy_T]

Well, you can divide a cent into still smaller units.
And in fact this has often happened in the past.
The only requirement is that it is sufficiently divisable to be usefull.
You should see the word 'divisable' from your own point of view. Is the currency divisable enough for you to use it in the current economy.
It is not nessesary that it is finely grained (like bitcoin).

Sure. I guess I'm just hung up of "fractional base unit".