Pay With Lightning pill shaped image with orange Bitcoin Lightning logo.

Bitcoin T-shirts

Pay With Bitcoin pill shaped image with orange Bitcoin logo.

Bitcoin T-shirts

Pay With Lightning pill shaped image with orange Bitcoin Lightning logo.
Pay With Bitcoin pill shaped image with orange Bitcoin logo.

Bitcoin As Money Wins Salability and Stock-to-Flow

Salability (characteristics of money)

In the context of money, there are characteristics that make a commodity suitable for use as money. Here are the key qualities of salability in this context:

  1. Salability Across Time: This refers to the ability of money to hold its value over time. Durable and stable currencies are salable across time because they do not degrade or lose value rapidly. (Food rots. Iron rusts.)
  2. Salability Across Space: This is the ease with which money can be transported and traded over distances. Money that is widely accepted and easily transferable has high salability across space. (Buildings are difficult to move. Food perishes.)
  3. Salability Across Scale: This quality refers to the ability to divide money into smaller units or aggregate it into larger units without losing value. Good money is divisible and fungible, allowing for transactions of various sizes. (Livestock, land, and buildings are not easily divided into smaller units.)

These characteristics are essential for a commodity to function effectively as money. They ensure that the money retains its value, is easily transferable, and can be used in transactions of different sizes.

Source: ChatGPT

  • Bitcoin is more salable across space than gold because Bitcoin is transportable/transferrable across the Internet. Gold is not.
  • Bitcoin is more salable across scale because it’s easily divisible. Gold is not.

Stock-to-Flow Ratio

Stock to Flow is defined as the ratio of the current stock of a commodity (i.e. circulating Bitcoin supply) and the flow of new production (i.e. newly mined bitcoins).

  • Highest Stock-to-Flow ratio: Bitcoin (~0.8% per year, as of the Bitcoin Halving on April 19, 2024, resulting in the block reward being cut in half from 6.25 BTC to 3.125 BTC)
  • 2nd-highest Stock-to-Flow ratio: Gold (~1.5% per year)

Leave a Comment

Bitcoin Resources

The Bitcoin Standard

by Saifedean Ammous

Bitcoin Whitepaper

by Satoshi Nakamoto

Not Your Keys, Not Your Coins

by Andreas M. Antonopoulos

Pay With Lightning pill shaped image with orange Bitcoin Lightning logo.
Pay With Bitcoin pill shaped image with orange Bitcoin logo.