Unit of Account
economics · intermediate
One of the three classical functions of money: the unit prices and contracts are denominated in.
The unit-of-account function is the hardest of the three for a new money to take on — it requires deep market depth and stable purchasing power relative to the goods it prices. Bitcoin is far from this for everyday goods, but progress within Bitcoin-native economies (Lightning apps, El Salvador, etc.) is the leading indicator to watch.
The "sats standard" sub-movement argues for pricing in sats (100 million per BTC) rather than BTC. The rationale is psychological: most people will never own a whole bitcoin, and sub-decimal prices feel awkward in a way whole-number prices don't. Wallets like Phoenix, Wallet of Satoshi, and Cash App default to sats display.
A common confusion: an asset can be a great store of value without being a unit of account. Gold has held value for millennia and almost nobody prices their groceries in grams of gold. Bitcoin can succeed as digital gold without ever becoming everyone's accounting unit — but for full-stack monetary displacement, all three functions eventually have to align.