The Best Digital Money — Social Voilk

What makes something a better money?

This is a question many in the cryptocurrency world have been asking ourselves, as Bitcoin Maximists think Bitcoin is the Best Money, while Eth Maxis think Ether is the best Sound Money, and others from Cardano ADA or others think their cryptocurrency token is the best money.
I think that market forces are the purest way to measure whether something is the best money, and it is helpful to throw in objective measurements to compare market participants and how they are used by the market.
So I came up with a few characteristics which distinguish digital money from analogue or paper money.

Immediate Settlement & Digital Form, Store Price/Preservation of value and cheap transaction speed.

I dont think these are definitive, but I think they are a good place to start.

Number One: Digital Form and Immediate Settlement

These two things go hand in hand in my mind, or travel together as a concept.
The only way to have settlement of debts involving legal tender right now, is to wait days to weeks for the actual paper money to exchange hands. Until then all correspondence regarding the payment of debt is just words and numbers on paper, promising to pay. The payment is a actually a debt or a promise to pay.
Paper money, Gold money, Silver Money, Cooper Money or Nickel Money is considered Real or Physical, thus it can't travel on the internet, so they can't be settled on the internet.
Let's get back to basics here and state that because only virtual constructs or non-real things can travel the Internet. So only virtual money can settle immediately.
So right now there is no official country currency, also called legal tender, except Bitcoin, and it is not a currency recognized globally as a legal tender like the US Dollar, as it is only legal tender in El Salvador.

Bitcoin is virtual, so Bitcoin could in theory settle immediately.

So unlike other paper or metal currencies, Bitcoin is virtual and can travel on the internet as a digit asset, and because Bitcoin travels on the internet, when you use Bitcoin to settle debts.
But the settlement occurs as soon as the transaction is consider final, which with bitcoin is six confirmations or about 30 minutes.
This 30 minutes is NOT really immediate, using the common definition of the term, as in taking only seconds.
But when you use Bitcoin Lightening, the centralization aspects of the network allow you to have immediate settlement, but it involves the use of centralized lightning nodes, which make you suseptible to theft of your Bitcoin. So most only use this platform for very small amounts you are willing to lose.

Other cryptocurrencies used to pay debts

Other cryptocurrency assets which can be used as mediums of exchange include Ether, which is digital, but it takes the same number of confirmations to reach settlement. So it has the same not really immediate settlement issue. Alternatively there is Litecoin and Dash, both of which are digital, and litecoin transacts faster then Bitcoin or Ether, but Litecoin needs multiple confirmations, so it is not immediate.
But then you have Dash, whose claim to fame is that it is an actual immediate settlement cryptocurrency token.
They call it fast, cash, Dash. So Dash is a better form of Digital Money then Bitcoin, Ether or Litecoin, due to it's digital nature, and it rapid confirmation leading to true immediate settlement in seconds.

Number Two : Stable Price/ Store of value.

At the risk of repeating a tired narrative; all country specific legal tender except bitcoin in El Salvador, are printed by the countries government at will to pay it's bills. The process is more complicated then actually printing money and sending it out in the mail. But the end result, by whatever process, is expansion of the money supply, which directly causes currency debasement or reduced value of the actual currency. Which leads to the fmous and predictable resultant increased price of goods and services, which is commonly called inflation.
It is a fact that all currencies suffer from debasedment, and thus all citizens suffer from inflation.

It is also true that US Dollars experience the least debasement and it's citizens the least inflation. While 2nd and 3rd world countries currencies suffer from the worst of both debasement and inflation.
Therefore worldwide, but especially in 2nd and 3rd world countires, the US Dollar is the preferred store of value and medium of exchange, for the above reasons, which make perfect sense and explain how the US Dollar can be the most hated currency and the most coveted currency at the same time.
It is hated because it's dollar supply expansion causes Dollar debasement, which debases the currencies of other countries.
The inflationary loss of buyng power in the US is magnified in other countries by the magnified debasing their currencies and resultant inflation of the prices for goods and services. This paradoxical effect makes everyone else's currencies less valuable and the US Dollar more valuable, and creates this love hate relationshipo between 2nd and 3rd world countries and the US Dollar.
In fact, as a measure of how bad the situation is, even in countries where it is illegal to price goods and services in currencies other then the countries official currency. Most of these same countries have a so called Black Market where goods and services are only priced in US Dollars and only exchanged for US Dollars.
It is therefore no surprise that the US Dollar is the preferred medium of exchange in the world, and thus referred to as the Global Currency or Medium of Exchange, which is reinforced by it's defacto medium of exchange for oil, which is the lifeblood of the worlds ecomomies, and the fact it is priced in dollars further amplifies the value of US DOllars outside the US A.

Stablecoins pegged to the US Dollar ...

... are the defacto global cryptocurrency medium of exchange, and store of value.

So it is no surprise that Stablecoins, which are backed by US Dollars, are the most prevalent or common cryptocurrency medium of exchange.
They far exceed BItcoin, Ether, Litecoin and even Dash in their use for cryptocurrency poiint of sale transactions, and as a store of value.
After all you can't send US Dollars, the most popular global storae of value, and the most popular medium of exchange globally by the internet, so you can't achieve instant settlement of dollars, unless you pay in cash.
But you can send stablecoins backed by US Dollars via the internet for immediate settlement, and you can store your labors value in stablecoins backed by the US Dollars via the internet. Thus protecting yourself from your country currency debasement and protecting your buying power against inflation.
So to reiterate; stable coins are digital, thus immediate settlement and they are pegged to the value of the dollar, thus stable in value. This is why stablecoins are the legal tender of the internet or global digital cash economy. They are based on the US Dollar, the global currency, which is debased the least and whose inflation is the smallest, so it maintains it's value the best of all global currencies.

Sorry, not sorry...

I know this will disappoint Bitcoin Maxies, Eth Maxies, Cardano Fans, and many others.
But the market doesn't care about your feelings, your hopes or your dreams.
The market just pursues thee most efficient way to exchange and store capital or cash or in this case...US Dollars.
This is why four of the top ten cryptocurrency tokens by market cap were stablecoins. USDT, USDC, BUSD and DAI. Unitl Regulators and Politicians intervened and exerted external to market forces to nearly kill BUSD.
This is the largest Use Case, thus the largest market share.
When we are not blinded by tribalism and irrational narratives, we can see the truth.

It's the market and it doesn't care about ideology

Posted Using InLeo Alpha