Quote from: cypherdoc on December 04, 2014, 06:24:28 PM

how do you explain gold's SOV function while not having any real payment usage?

Gold most definitely has a payment function, it was physical transfer of coins and bars. A payment system that lasted off and on for millennium. Even in the 1800s in many areas of the US people would only accept gold or silver coins/bars as payment, and it took some time for the population to become comfortable with paper dollars. That is a payment function for gold.

Where do you think the English phrase "In cold hard cash" comes from. It is from people demanding the real payment function of physical coins/bars, not from people demanding paper notes.

Quote from: cypherdoc on December 04, 2014, 06:42:13 PM

Quote from: NewLiberty on December 04, 2014, 06:38:22 PM

The "technology" innovation of dollars vs gold was that initially dollars were tokens exchangeable for gold (actually silver, the thaler). Gradually over time this link has been progressively severed through force of law by the primary beneficiary of the dollar issuance.
The frogs have been thoroughly boiled, all that is left is to see how many meals can be made of our meat.

instead of innovation, maybe we should call it "bait and switch"?

What NL stated was the false promise given to people to make them comfortable with using paper dollars (the bait and switch). Otherwise many people would not have trusted dollars and continued to demand physical coins (in cold hard cash). Even with the government's false promise many still continued to use coins, which made FDR's executive order necessary.

That said, the payment function for dollars IS better than the payment function for gold, which I believe is why dollars won.

With gold you are limited to in-person physical transfers. This is very limited so we did have bank notes that people could transfer, but people understood bank notes were not the real thing and they could and did break promises all the time.

Comparatively the FED dollar ledger is a superior payment function over gold. With the dollar ledger physical transfer is no longer necessary, banks can move the ledger across oceans as fast as they can move information, this is much more useful than gold coins. And a big plus for most people were dollars were guaranteed by the FED and there was little risk of dollars defaulting (since after FDR's default dollars were only backed by themselves).

The point is gold has a superior SOV function, but I believe dollars "won" because they DO have a superior payment function. SOV alone is not enough, again Rai stones are superior to gold in SOV, but that does them no good since the payment function is very poor.

Bitcoin has a superior payment function over dollars PLUS a superior SOV function over dollars (and gold). It is the ability to easily transfer value that makes a SOV system valuable.