Quote from: iamnotback on March 10, 2017, 02:09:17 PM

@toknormal, unit-of-account means everyone holds that form money as their checking and even savings (reserve) account.

Not really - only in a notional sense.

They hold a diverse range of "forms of money". It's just that they all share the same denomination. (See here: http://www.bankofengland.co.uk/statistics/Pages/iadb/notesiadb/m4.aspx).

You're mixing up collateralising assets (or stores of value), units of account and payment systems. These are three distinct aspects of a financial system that can be, and usually are, completely decoupled. All the same they all tend to have the same unbrella term "money" applied.

To illustrate, lets take something that we're familiar with - a cryptocurrency exchange (Poloniex, say).

1. You start with a collateralising asset (100 BTC, blockchain based)

2. You make a deposit.
At this point, there is 200 BTC in circulation. That's because you just "signed" a contract with the exchange to permit them to bring an additional 100 BTC of derivative tokens into existence backed by a line of credit that you give them. The original 100 BTC are still circulating on the blockchain. While you're trading, they may lend them out at interest, buy stuff with them - whatever - depending on the terms of contract for depositing on the exchange.

3. You trade. You are trading with other parties who are all using the same class of "money" (credit backed tokens) but denominated differently - Ethereum, Mooncoin, you name it. Note ! While you are trading, none of the blockchain properties of the respective coins make a damn bit of difference to the trading experience. All trades are instant, support the same level of privacy, etc. That's because your are using a payments system (SQL server in this case) which is independent of the technical properties of the collateralising asset. It's also independent of the blockchain denomination which is an important point (see below).

4. You withdraw funds.
At this point, you may have your balance denominated differently to what you started with which will allow you to exchange your balance for a different blockchain token

You can see from those two examples that price denomination, collateralising capital and payment systems are all distinct. Adopting a "currency" means no more than re-denominating the capital base. "Holding a currency" means holding an asset that's denominated in that currency. (That could just as easily be Bitcoin bonds as a private key to a bitcoin balance, so it doesn't have to be a bearer instrument). "Clearing a trade" means using a payment system to facilitate an asset exchange in an arbitrarily nominated currency. "Holding a collateralising asset" means holding a bearer token or instrument where owner and possesor are indistinct. (i.e. where the denomination is instrinsic e.g. piece of coal, diamond, pound in weight of siliver or Blockchain private key).

These three aspects of monetary media not only are distinct, but actually have conflicting priorities - which is why they are almost never the same medium. If you try to create a crypto that does these three things well it will be a crap crypto because you'd have to create nasty couplings between conflicting objectives:

Payment systems need to be currency agnostic whereas blockchains have to be currency native
good stores of value need to impose scarcity to deflate prices over time whereas good currencies need to inflate liquidity to keep prices stable
currencies must be definable against a heterogeneous background of both payment systems and collateralising assets, whereas payment systems only facilitate the clearing of a trade and represent neither a currency nor an asset

Think of it this way. If a Shakespearean play was performed in different countries around the world, then:

the language of the performance would be the currency
The village Stage would be the payment system
The literary work "Hamlet" would be the collateralising asset

Script translation...$100.
Rental of the stage...$400.
Copyright to the script ? (Priceless...!) Wink