Ideal Properties of Digital Commodities
Inspired by the thread: http://www.bitcoin.org/smf/index.php?topic=2966.0
Ideal Properties of Decentralized Digital Commodity
If we had the ability to design and implement an ideal form of digital commodity money, what would it look like? How does Bitcoin currently compare?
| Property | Ideal Implementation | Bitcoin's Current Rating (A..F) | Notes |
|---|---|---|---|
| Decentralized | no single point of failure or issuing authority | A. | |
| Scarce | required to be a reasonable store of value | A. | |
| Divisible | should be as close to infinitely divisible as possible | B. | |
| Storage | actual commodity should be cheap and easy to physically store securely | A. | |
| Irreversible Transactions | transactions should be irreversible | A. | |
| Anonymous | untraceable transactions (if desired) | C. | currently requires some trusted third party to obsfucate transactions |
| Unspoofable | should be exceedingly difficult to counterfeit | A. | |
| Verifiable Funds | publicly auditable balances, with account holder's permission, to verify funds before making a transaction or make sure that a third party has not moved your funds | C. | since permission is not required |
| Free Transactions | transactions should be free, or nearly free, forever | B | bitcoin future tx fees are a big unkown right now |
| Unique Use-Value? | ideally a commodity should have a unique non-monetary use-value | F | currently there is nothing you can do with bitcoin that you cannot do with a national currency |
| Offline Transactions | ideally two participants should be able to safely transact without requiring internet access or trust of one another (like normal cash) | D | seems quite impossible in the current bitcoin implementation |
| Speed | ideally transactions would be instantaneous | B- | currently bitcoin is fast enough for most things, too slow for others (vending machine) |
| Scalability | usable for every transaction everywhere in the world | C | currently there is a lack of lightwieight and offline bitcoin clients (if such a thing is even possible) to replace the need for conventional cash |
\**May not be a necessary property. Thinking it would be cool if a known address could be audited via a tool like blockexplorer.com but if the coins are moved from that address, they are untraceable.