Edward Price, a former British economic official and current teacher of political economy at New York University’s Center for Global Affairs, explains why fiat currency, like crypto, struggles to fulfil its role as money. Money, we are told by the economics textbooks, serves three purposes: it is a medium of exchange, a store of value and a unit of account. This trio is ubiquitous. Economic activity (or exchange) and capital (or value) interact over time, forming GDP (that is, accounts).Simple.But the standard story doesn’t admit the inherent conflict between these roles. Money cannot serve three masters at once. For one, money can hold value only if its quantity is somehow constrained. The more there is of anything, the less it’s worth. That’s supply and demand. But, at
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Edward Price, a former British economic official and current teacher of...