How to create a new currency

April 22, 2024

Currencies have three properties — they act as units of account, stores of value, and mediums of exchange.

Currently, modern cryptocurrencies like Bitcoin, Ethereum, and Solana effectively meet two of the three essential properties of money. They serve as excellent stores of value, having significantly outperformed all other asset classes. Additionally, they function as units of account, since pricing items in BTC, ETH, and SOL is straightforward and increasingly common.

Where I believe cryptocurrencies have not yet fully realized their potential is as mediums of exchange. Currently, most transactions are used to purchase digital, crypto-native goods, such as NFTs. If we are to refer to cryptocurrencies as "currencies," and aspire for them to become the future reserve currencies of the world, we must unlock their potential as mediums of exchange for real-world goods and services.

People should be able to purchase real-world goods and services on-chain with minimal friction.

This will first begin with high ticket items like yachts and fancy cars due to their viral nature, but eventually, we will enable crypto as a medium of exchange for all items, including something as basic as a cup of coffee.