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Entrepreneurs need money that is a meaningful unit of account and a reliable store of value.
Brazil's real may over time develop as a reliable store of value.
Few hundreds are actually found in consumer wallets; instead of passing quickly from hand to hand, they tend to be held as a reliable store of value.
Yet, offer additional value in the form of low-cost lending and a more reliable store of value since the savings are deposited in formal banks.
So if the dollar continues to fall, China may wish to switch to a more reliable store of value and unit of account.
But as Buttonwood noted two weeks ago (see article), gold can itself be the subject of speculative excess, as it was in 1980: any asset that takes 28 years to reclaim its peak is hardly a reliable store of value.
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The Vietnamese have flocked to more reliable stores of value.
But, when the confidence underlying fiat currencies falters folks resort to recognizable and reliable stores of value and it's not that hard to manage in such a world.
As far as airlines are concerned, therefore, bitcoin has appeal as a cheap, reliable and secure medium of exchange, not a store of value.
Bitcoin has proved a volatile store of value (see chart 5), but as a cheap, reliable and transparent way to make a transfer it is a notable success.For the most part, however, the challenge is not head-on.
A store of value that fails to store value is a curious idea.
More suggestions(15)
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com