Bitcoin Forum

The front page of BitCoin.org states that BitCoin is a P2P currency. Others in the forums refer to it to as an asset (e.g gold).

Both of these analogies has merits and flaws. For example, nobody knows the amount of gold in the world or when it will be found, but we know the amount of BitCoins that will be available so here the analogy with gold breaks down. Currency is related to a physical object with either intrinsic value or backed by a gov't, and BitCoin is neither.

The whole analogy thing reminds me of the movie industry comparing downloading a movie to stealing a car - the analogy breaks down pretty quickly.

My feeling is that BitCoin is neither a currency or an asset. It certainly shares properties with both but it can be misleading to push the analogy too far.

What are your thoughts?
Is my thinking flawed - is BitCoin perfectly analogous with a currency?

Oxford dictionary's definition of currency is http://oxforddictionaries.com/definition/currency?view=uk .

 noun (plural  currencies)

    *
      1 a system of money in general use in a particular country:the dollar was a strong currency[mass noun] :travellers cheques in foreign currency
    *
      2 [mass noun] the fact or quality of being generally accepted or in use:the term gained wider currency after the turn of the century
    *
      the time during which something is in use or operation:no claim had been made during the currency of the policy

Its not correct to call a global digital accounting system a currency.  Just like gold is physical proof of atom ownership, Bitcoin is a right to digital proof of ownership of a solution to a complex mathematical problem.  Bitcoin is not anonymous as well, there's a publicly available blockchain recording every transfer.  So yes, bitcoin.org need to change its description of bitcoin.  Isn't it more like digital rights to cryptographic key certificates which can be transfered, bartered, bought or sold?  But then would the general public have a knowledgable buzz word for that?  So would it be technically not a currency, but more like a very unique, secure, valuable baseball card?

Wiktionary:

1.  Money or other item used to facilitate transactions.
2.  Paper money
3.  A countable unit which symbolizes real value
4.  Acceptance or use (e.g. "The jargon's currency")
5.  The state of being current

bitcoins qualify under #1, arguably as an extension of #2, and probably under #3 (depending on what "real value" means)... the other two definitions aren't really relevant to monetary issues.

1.  In which currency do you measure your money?
2.  In which currency do you hold your paper money?
3.  In which currency are you counting your value?
4.  Which currency are you accepting?
5.  In which currency are you current?

I would rather go with: A SYSTEM of money in GENERAL use in a PARTICULAR COUNTRY

Otherwise all goods/services that can be bartered in any economy becomes currency as well.

The Roman empire used to give salt to their subjects as salary (salt -> salary).  Are you worth your salt, or are you worth your weight in gold?  :) Salt used to be traded equally in their weight for gold in Timbaktu as it was scarce and vital to the preservation of food.  The Romans however still had their currency coins with Caesar's head on it.

What does a particular country have to do with anything?  Your definitions make absolutely no logical sense.

Currency is anything with current value.  Money is anything with future value.  Investments are things which increase in value.

Bitcoin pretty clearly has current value.  It may be money, like precious metals, despite the fact that nothing guarantees it as such.  It may also be an investment, albeit a risky one.

Isn't a currency used for exchange with goods/services is backed by the central bank of a particular country?  For the us dollar the Lord's name was even added to add confidence by the early illuminatist's with the all-seeing eye and the illuminatists's pyramid side to side.  Some folks use pigs, salt, chickens, eggs, pebbles in rural areas as a barter form of exchange.  So doesn't a currency need to be backed by a government and issued by the government's central bank?  Wouldn't you have difficulty trying to tell which government's central bank is backing the currency, unless bitcoin is issued by the government of online-topia?  Isn't Bitcoin more like a digitally easily transferable good (right to a cryptographic key certificate) that has universal appeal (secure recording of ownership), that may be bartered for anything, like you would barter with water for someones caravan in the desert in exchange for one of the camels on the trade route (or water for anything else - due to its common use)?  This would not make water the saharan currency.  Water is just a very easily tradeable good in the sahara.

Ok so your house has current value, let's go buy a bread with it and get the shop keeper's house for change.  ;)

Didn't bitcoin.org already got all the attention, hype and free publicity from calling bitcoin a currency?  Shouldn't it on the front of the website rather be called a transferable right to a unique secure digital good (something similar to the unique digital licence certificate you get for software that gets unlocked by your unique code)?  And yes - it is not anonymous as well, see blockexplorer.com . That description has fortunately been omitted rightfully from the description - to not mislead the public.

No, you are confusing currency and money.

Money is any commodity that has the following characteristics...

1) durability;  it does not rot or rust.

2) divisibility; it can be split up into very small divisions without harming the value. 

3) transportability; a small amount of it has a high relative value, and can be thus transported relatively easily.

4) noncounterfeitability; it's hard to fake.

5) fungabilty; any measurable amount is of equal value to any other amount.

A currency can have some or all of these characteristics, but these are not what makes a currency.  A currency is simply a standardized unit of measurement.  It's a raw number. 

A currency can also be a money, and vice versa; but most currencies are not monies, and this is true also with Bitcoin.  Bitcoin has all of the above characteristics except it is not a commodity, as there has never been an alternative use for a bitcoin beyond it's trade value.  So, from a technical perspective, calling Bitcoin a currency is the most accurate description in English.

It is currently a currency in a very limited subset of the population, but it seeks to be a proper currency in general use with the bulk of the population.

The key value, in my mind, is that a currency is generally acceptable for trade.  That is not (yet) true.

In legal terms, I think possession is quite fundamental. So what is it that is physically possessed?

As cloud9 says, one does not physically possess a bitcoin, no one does, in the way that Yap stones were not possessed by any one individual. What is in your physical possession (the wallet.dat file) is a set of crypto-graphic keys that can be used to transfer bitcoin credit around in the block chain database, like tally-sticks were used to transfer credit.

Crypto-graphically secured, digital signing rights to a public database of limited credit tallies.

It is not largely different than a modern electronic bank account but the mental inertia associated with those allows it to be called money, currency.

Am I understanding correctly that the services that the oldest profession in the world renders, can then by this definition of the above and not being a commodity (but having usibility, but no intrinsic value) also be defined as a currency?  Isn't bitcoin just providing a very secure accounting service by means of tradeable ownership rights in cryptographic key certificates?

In prisons, war camps, post-collapse economies, etc whiskey and cigarettes get traded like a currency.

I think it is correct to call it a currency.

From the various definitions Bitcoin would qualify partly as a currency.

However to be a currency of significance in our society it has to be accepted by a large number of people and should ideally not be subject to prohibition by governments.
It is far from clear, if BTC will ever be a currency of significance (e.g. for paying my daily foodstuff at the supermarket).

Would a statement like:  Bitcoin, the Net's digital barter good ...  be an accurate description of what bitcoin is?  Does it not just give the holder of a cryptographic key solution (digital data goods) the right of ownership to transfer that right of ownership to anyone who whish to acquire this in exchange/barter for anything else?  This serves as a useful digital accounting system like gold is a physical accounting system.

The word used in English for a "barter good" is "money".  Bitcoin is not a "good" beyond the context of third party exchange and accounting, and is therefore not a "good".

Definitions may vary depending on who is defining!

Dictionary may have 1 defintion, judges/lawyers another, day-to-day speech a third, lawmakers a fourth etc. etc.

It's going to be quite interesting to see how the law in different jurisdictions see BTC!

Not really. Currencies are generally political instruments, historically issued as "warehouse receipts" against specie (precious metal), but recently not connected to specie at all.

But is there a better word for it? As a medium of exchange it is actually a money. But people are scared to death of the word "money", seeing how it is "the root of all evil" (though that saying is a misquotation of a Biblical proverb and has absolutely no logical basis whatsoever).

Bitcoin is only currency if you consider the internet to be a sovereign entity... Which I do... Then again I'm kind of an odd guy so...

Realistically it's more like a very specialized form of stock. I imagine each bitcoin to be a "share" of stock in the bitcoin movement. It's backed by the same thing stocks are backed by: faith in the behavior of those running the show. In this case the "show" is bring run partially by an automated system, which we're trusting is secure, and partially by the value created within the bitcoin community, striving to see it as an accepted commodity.

At the end of the day, it's really just a stupidly semantic argument. If I go to a faire and buy ride tickets, which I then exchange for goods and services, I would personally consider those tickets to be the "currency" of the fair. I think the dictionary definitions no longer match common usage for this term and we're wasting time nitpicking over semantics that we could be using to build the community.

I have a scientist friend who corrects people who say "I have a theory" to "No, you have a hypothesis" constantly. Not only is it annoying and semantic but it's arrogant of the scientific community. When 99% of people are using the word "theory" one way and 1% are insisting the majority is wrong, who is the one who really needs to change their phrasing? The same applies to economists and the Oxford English dictionary arguing over words like "currency" or "money." Words are not a product of dictionaries, they are a product of human use. If the use changes, the meaning of the word changes. Dictionaries do not have the right to decide what a word means, their job is to report on what we believe a word means.

Semantics can be important, though. Consider the ability of the government to define the murder of noncombatants as "collateral damage", or to call whomever they damn well please a "terrorist". Words have meanings for a reason, and words related to political economy can cause damage when their meanings start to slip.

Sovereignty isn't a requirement for a currency.  Market currencies have arisen from defacto standards in the past.  The (original) dollar is one such standard, before the Federal Reserve stole the term and corrupted it.  The "dollar" was, prior to the US revolution, a mispronuncation of a "Thaler"; which was a silver coin minted by a particular private mint in present day Germany.  The "Thaler" was uncommon in the colonies, as the Spanish silver coins dominated, but they were all roughly based upon the troy ounce as the unit of weight.  So a "dollar" wasn't a particular sovereign's coin, it was a common reference to a particular weight in silver.  That unit of weight was the defacto standard, and any silver coin minted to that weight was such a currency.  The silver content was money, but the currency was the standardized unit of measurement.  Once again, a currency is just an arbitrary unit of measurement that is widely accepted; while money is a commodity with certain characteristics.  The two things overlap in practice, but not in their core meaning.

Trade, money and currencies have all existed prior to and in the absence of a sovereign government of any kind.  A government is certainly not a requirement.

I agree, but it seems to be a requirement if you ask some of the previous posters. I think that money and currencies are what we decide them to be, not what a dictionary or government tells us they are. Isn't that part of the appeal of bitcoin, really? That we're choosing how to run our financial world instead of a government, bank, etc?

Bitcoin's durability comes from the hardware and electricity.

It's divisibility and transferability are obvious.

Bitcoin is not a currency yet. Only when it bitcoin can pay for its electricity and hardware in bitcoin will bitcoin be a currency that can stand on its own.


Bitcoin needs to support Open Source Ecology and work on getting The Zeitgeist Movement to see that this is a currency that is not issued by a central authority.

The zeitgeist movement has the numbers of people who are thinking critically.

Open source ecology has the production equipment to change manufacture of houses and machines.

Bitcoin can put it all together and make it flow.

Ecological political "movements", like Zeitgeist have debatable political under-pinnings.

Bitcoin can be said to "put it all together" for any number of political movements, since money is simply a tool.

If A bartered/traded a goat for six chickens from B, does that make goats and chickens barter/tradeable goods, currency or money?  If A bartered/traded a goat for six bitcoins from C, and C bartered/traded six chickens from B for six bitcoins, does that make goats, chickens, and bitcoins barter/tradeable goods, currency or money?

Is the understanding that if whiskey or cigarettes is in common use among the population under consideration, giving it fluid tradeability as goods, as it has universal appeal; is it a good (although maybe universally tradeable) or a currency/money; or is the understanding that it can be used in the way that a currency can be used due to its universal tradeability due to common use?  Could common use examples of tradeable goods (not currency receipts which get issued by governments and used to be backed by central banks by the value of gold it represents and not goldsmiths anymore) be salt in the Roman empire, pebbles of islanders, silver in the colonies, bitcoin (transferable secure right of ownership to scarce unique digital cryptographic keyed certificate data communicated over a network?) etc., etc.?  Can any legally produced, legal goods still be bartered/traded directly for any other legally produced, legal goods or does everything legally HAVE to go through a middle non-goods utility of exchange?

Guys, please! There are people who have studied monetary systems for all their life, and they have come to pretty solid conclusions. So dont speculate here, or worse, dont say that definitions dosent matter. Pure speculation and guessing here doesnt helps.

So, this is the correct definition!

Currency and money are very similar and many people think that they are one of the same. However, there is one major difference that separates the two. First, let's obtain a firm grasp of how they are similar. Both currency and money have to be:

-A unit of account
-A medium of exchange
-Portable
-Divisible
-Durable
-Fungible (one coin in my hand has the same value as one coin in your hand)

Money must be all of the above, but has to also be a "store of value" over long periods of time.

Paper is never a store of value  in the long term, because it can be printed at will and only has the value given to it as determined by the issuing government. Also, all paper currencies have failed in the past, that means they have gone to its intrinsic value of zero. Gold and silver have been used as "money" for over 5000 years because it satisfies every requirement stated previously. Once upon a time, the U.S. was on a gold standard. This meant that for every dollar printed, there had to be gold to back it up. Our dollar was considered "money" because of this gold backing. Thus, the phrase "good as gold" was coined (you could redeem your dollars for gold). Gold has to be mined and that process takes time and physical effort.


So by all means, BitCoin could become MONEY! Alas, dollars are not money, only currency! Of course, to become money, Bitcoin still needs prove two things:
-To withstand the test of time (and by so doing becoming a store of value in the long term).
-To become a medium of exchange (it has the potential to be one, but it is still not widely accepted as a medium of exchange in the world).

People, if the technical aspects of Bitcoin prove to be solid, and it becomes a widely accepted medium of exchange, it could not only become MONEY, but the best money the world has known so far, because of its capability to be managed digitally which allows the instant transfer allover the world without any centralized authority.

Of course precious metals will be preferred for more long term security, as bitcoins could be made inoperative worldwide in minutes with any massive attack to the internet, like a nuclear EMP (electromagnetic pulse), or Obamas internet kill switch, for example. Even if we return to the stone age after a nuclear catastrophe, gold and silver would still be money accepted by people, as it does not requiere technology to fulfill its function.

But Bitcoin runs far ahead of gold and other PMs in portability (try to carry a gold bar in your pockets), divisibility (try to cut a gold coin), and the most important one: as medium of exchange (try to send gold overseas in minutes with a click of a button using P2P).

Regards.

Is gold just a physical accounting book - crediting the physical/LEGALLY entitled atom holder?
Is bitcoin just a digital accounting book - crediting the physical/LEGALLY entitled key holder?

Yes, and it is very good already, some might say the premier, in these areas particularly;

portable
divisible
durable

thnks icecoins for spelling that all out cogently.

Exactly~!!!!!!!!!!!!!



BUT ~!!!! This is my point with this whole post.....

COULD BECOME MONEY

I am arguing it will only become money in and of itself when it can pay for its own electricity.

I feel like it's being traded almost like a stock in a stock market. I don't see people buying and selling goods with Bitcoins nearly as much as I see people trading for USD on Mt. Gox. In fact, that's how the price is set, not by what you can buy with it. There is also way more supply than demand in the Marketplace forum, as far as I've seen.

Total Bitcoins sent last 24h is 600,727.92 BTC (Source www.bitcoinwatch.com), total traded for fiat currency on major exchange (MtGox) last 24h is 56,604.96 (Source bitcoincharts.com)

There is a breakdown of transactions, blocks created, and currency traded at  http://bitcoinmonitor.com/

For a list of goods/services that are listed as available for trade for bitcoins see https://en.bitcoin.it/wiki/Trade

If you have a good/service that you would like to add to the wiki list, you can create a wiki account and add it at https://en.bitcoin.it/wiki/Trade


If you would like to compare the ratios to the global decentralized forex market see http://en.wikipedia.org/wiki/Forex_trading
"...as of April 2010, average daily turnover in global foreign exchange markets is estimated at $3.98 trillion..."

as a ratio to

Global GDP see https://www.cia.gov/library/publications/the-world-factbook/fields/2195.html?countryName=&countryCode=&regionCode=%3E
"... World       GWP (gross world product): $62.27 trillion (2010 est.) " - that's for the year.

That is the bias of this forum.  There is some market trading on this forum, but for the most part that doesn't really happen here, as there are many other better market sites for that purpose.

Yes of course.  What a silly question.