The Absolute Smallest Possible Money Unit! When Money Crashes into the Laws of Physics

4 Pages Posted: 18 Nov 2019

See all articles by Espen Gaarder Haug

Espen Gaarder Haug

Norwegian University of Life Sciences (NMBU)

Date Written: November 7, 2019

Abstract

In this paper, we demonstrate that there is an absolute physical limit on how small the smallest money unit can be, no matter how much we are able to improve our technology. The smallest money unit seems to be directly linked to the smallest possible energy unit needed to store one bit. If the smallest money unit is smaller than the cost of energy of storing one bit then there seems to be an arbitrage, which will also constrain money producers such as central banks from issuing money with a smaller denomination than this minimum money unit.

Keywords: Money Units, Money Creation, Arbitrage, Information Theory, Launder Limit, the Planck Constant

JEL Classification: E4, E42, G00

Suggested Citation

Haug, Espen Gaarder, The Absolute Smallest Possible Money Unit! When Money Crashes into the Laws of Physics (November 7, 2019). Available at SSRN: https://ssrn.com/abstract=3482479 or http://dx.doi.org/10.2139/ssrn.3482479

Espen Gaarder Haug (Contact Author)

Norwegian University of Life Sciences (NMBU) ( email )

As
As
Oslo, Norway, 1432
Norway

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