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Opinion
Matt Levine

Blockchain Could Use Some Help From the Dollar

It won't be easy for smart contracts to go mainstream without the lifeblood of international and U.S. commerce.

Wealth is measured in dollars, not Bitcoins.

Wealth is measured in dollars, not Bitcoins.

Photographer: Bloomberg

This post originally appeared in Money Stuff.

The U.S. dollar is a useful unit to keep track of the prices of things. A sandwich costs $8. A share of Apple Inc. stock costs $222.19. A cargo of Iranian oil costs $150 million. 

The U.S. dollar is also, conventionally, a medium of exchange, a way to actually pay those prices. But this use of the dollar is much less straightforward than the unit-of-account one. If you want the sandwich, you can give the seller eight pieces of paper marked “one dollar” and get the sandwich. If you want the Apple share, you can’t do that; you need to go through the banking system, instructing your bank to make some electronic entries in its accounts to move (purely electronic) dollars into the account of your broker, who in turn moves them into the account of the seller’s broker, etc. etc. etc.