Crypto-Currencies And The Future OF Money

chapter
1

the nature 
oF Money 
and the 
possibility 
oF    Crypto-

currency as 
Money 
By    professor    tony    Lawson,
University    of    Cambridge

A.    the    Nature    of    Money
Can    forms    of    cryptocurrency    become    money?    to    pursue    this    question,    it    
is    necessary    first    to    be    clear    on    what    is    meant    by    money,    and    on    what    
precisely    is    required    for    something    to    be,    or    to    become,    money.    the    concern    of    this    opening    chapter    is    precisely    with    this    issue,    to    identify    conditions    that    must    be    met    for    a    form    of    cryptocurrency    to    qualify    as    money.

A form of money, just like any other social phenomenon, is 
a property of a particular community, and so typically pos-

sessing various community-specific features. Many com-

munities have produced money, however, and the concern 
here is with commonalities of all the numerous forms.
In this regard, the most obvious common or shared 
feature is that by which a money can everywhere be 
identified or recognised. This is its property of being 
employed as a general means of payment, of being 
useable to discharge any debt in the community in 
which the money is produced. 
If, say, in any specific money community, an individual 
participant requests of a seller, a loaf of bread, or per-

haps a meal, then, when the bread is handed over, or 
after the meal has been consumed, the buyer is in debt 
to the seller. It is an identifying property of money that, 
in all such transactions (excepting in cases where a 
specific alternative agreement on means of payment has 
been reached in advance of a debt being occurred), the
money can be used to settle the resulting debt.
A basic condition for a general means of payment to 
exist in any community is that the latter has a system 
of value accounting that includes, as a component, a 
(community-specific) unit of value. This is simply a unit 
of value measurement or assignment -- such as pound 
sterling, US dollar, euro -- in terms of which all goods, 
services, or assets in a community will have their as-

sessed values expressed. Clearly all items of money

must also be denominated in the same units as the 
debts, if the money is to be used to cancel them. So, 
money will itself be a feature of a system of value ac-

counting that includes a unit of value (or account) as 
an additional accepted component.
If the nominal property of any money, i.e. that by which 
it is identified, lies in its being accepted as a general 
means of payment, a further more fundamental feature 
that grounds this property is the manner of the mon-

ey’s incorporation as a component of the community’s 
system of value accounting. Most social phenomena 
(not just money) are in fact constituted through pro-

cesses whereby certain kinds of things are incorporat-

ed into community systems as components. In all 
cases, the phenomena are created by processes of social 
positioning, whereby selected kinds of things are al-

located to positions, thereby constituting them as 
different types of phenomena qua system components, 
and whereupon their uses, qua positioned items or 
system components, are governed by community-ac-

cepted sets of rights and obligations. To see this, it is
enough to think of the creation and acceptable uses of 
means of transport, motorways, car parks, traffic 
lights, passports, schools and hospitals, etc.1
Money is simply a specific conforming instance of this 
general process of social reality constitution. The 

Crypto-Currencies And The Future OF Money