Economic value: benefit provided by a product or service. It is subjective.
The tool used to represent and store economic value that makes possible its transfer, exchange and measurement is called money.
It allows for social coordination.
Historically, money usually has evolved as stages:
2nd. Store of value. Medium of wealth transfer.
3rd. Medium of exchange.
4th. Standard of value.
Those stages coincide with the money functions:
1. Social representation/recognition of value: it displays verifiable economic value.
2. SoV & MoWT function: it preserves economic value across time.
3. MoE function: it transfers economic value across space.
4. Unit of account: it measures economic value. This implies the existence of a price system that facilitates economic (value) calculation.
Monetary properties are the characteristics the money needs to have to perform those functions securely:
1. + Unforgeable costliness: security against misrepresentation. The costliness in its creation implies scarcity which represents value. Its unforgeability guarantees verifiability.
+ distinguishability: security for its recognizability.
2. Unforgeable costliness , distinguishability and:
+ storability: security against theft or loss. Also security against value erosion when stored like those incurred with a non-durable money.
+ portability: security against transfer costs like those incurred with a low value-to-weight ratio physical money.
+ predictable low inflation: security against value dilution caused by a low stock-to-flow ratio
3. SoV & MoWT monetary properties and:
+ fungibility & divisibility: security through privacy and the enabling of quantification when exchanged.
+ saleability: security against value disappearance when intended to be exchanged caused by lack of social adoption.
4. MoE monetary properties and:
+ fair/smooth distribution: security against variance in value across time caused by a high concentration.
Trusted third parties are security holes, so any other characteristic that allows for trust minimization is also a monetary property.
A secure money allows for social scalability: the efficiency in social coordination.
The kind of money generally accepted as a medium of exchange is called currency.