Bitcoin Forum

The biggest misconception is that it is currency... it's not.

I have been harping on this for a while now, but here it is from the owner of  second largest exchange BTC-china.

 

"China has been known as a nation of savers, who are always saving for a rainy day,” says Lee.  ”Bitcoin is a digital asset, like real estate, gold, or stock. It is just one more option now. With Bitcoin hard-coded to be limited, it’s like a collectible.”"

It isnt currency.
It is a digital collectible.

Bitcoin is alot, and its ALSO a collectible.
Now just look what people pay for magic cards or baseball cards, stamps, old hardware, whatever, if its rare, there are people "hoarding" it ;)

More and more companies are adopting bitcoin. Just a matter of time before it becomes a good currency.

Currency= a system of money

Money = store of value, medium of exchange, and UNIT of account.

Unit's are definable in objective terms and are a constant. Bitcoin is not a UNIT so it is not a UNIT of account.

It isn't currency.

The reason Bitcoin has become an asset was that it is the better currency

hoping my cabbagepatchdolls4bitcoin.com takes off. I was really burnt badly on beaniebaby4bitcoins.com scam tbh

It's not a currency in the same way that email is not mail and html is not text.

Right now most people don't even realize that the basic "currency" function is just a small subset of things that Bitcoin can do.  Once distributed contracts take off,  things are going to get really interesting.  There is nothing even remotely comparable in existence right now. No currency, no commodity, no collectible.

The biggest misconception in Bitcoin is that is fits into some historical asset class.  The truth is that is has created a whole new asset class of its own.

+1

Not to mention all the special things that altcoins can do / will be able to do.

Yes store of value and medium of exchange just like a baseball card.

Stop calling it currency  :)

people use it to buy beer or a laptop... why can't we call it a bit of both?

I thought it was already universally agreed that Bitcoins are digital gizmos

Na I said it doesnt make sense as a store of value. A cell phone is a store of value, but every tech is guaranteed to fall in the wake of a new better tech. 

Because if you can realize that bitcoin is not currency because it is not a UNIT then you can realize that the US dollar is not currency because it is not a UNIT.

That is what Ron Paul is really asking Ben when he asks can you define a dollar for me. He is really asking what is the UNIT called a dollar equal too?

I didnt say it was a good store of value.

Nintendo games were not a good store of value either, but wait another 100 years and see how much people are willing to pay for a contra game.   

In my opinion, I see Bitcoin as both a stock and a currency. But at the moment i see it as a stock, as who would buy something with an asset that is increasing in value when you could use something stable like fiat to buy the goods. Later when Bitcoin stabelises i will see it as a currency  ;)

Fine call them assets.. I dont care what you call them.. The point is they are not currency.

The owner of the second largest soon to be the largest exchange would disagree.

http://www.forbes.com/sites/kashmirhill/2013/11/08/from-walmart-to-bitcoin-the-ceo-behind-the-chinese-exchange-sending-bitcoin-to-new-highs/?fb_action_ids=194121050772391&fb_action_types=forbessocial%3Acomment&fb_source=other_multiline&action_object_map=%7B%221941210



"China has been known as a nation of savers, who are always saving for a rainy day,” says Lee.  ”Bitcoin is a digital asset, like real estate, gold, or stock. It is just one more option now. With Bitcoin hard-coded to be limited, it’s like a collectible.”"

You cant define things in terms of themselves. When you say bitcoin is x about of satoshi it is like defining an inch as a millionth of an inch

how about we call it by what it is? a quasi currency. it would be silly to buy a beer with gold, but it definitely wouldn't be silly to buy a beer with BTC.

I can go with that, a quasi currency like the dollar. I disagree with beer for gold being silly.

you brought this up before and it was as pointless then as it is now...

Does it really matter what word you use to describe it, whether you call it money, a currency, a commodity, a technology? Who cares whether it is a 'unit' of something or not? That has nothing to do with the actual function that bitcoin provides and you are basically just starting a pedantic argument over an insignificant semantic issue.

Also, whether the word 'currency' is correct or not is hardly the misconception of the century and I think there are far more significant misconceptions you could concern yourself over (such as the misconception that Bitcoin can easily be shut down, etc.)

how would you give change in gold, especially when an ounce trades at $1300+? you certainly can't cut the coins/bars up..

It is computer data and as such, should not be considered currency and/or a means to build wealth/prosperity.

It is being used to fool us into going cashless.

What will you do if they turn your power and/or chip off ?

 

It is hugely important. It causes asset price inflation and distortion of the global economy.

http://howestreet.com/2012/12/wake-up-investors-money-is-imaginary/

Sublime, you may be trolling, but I'll engage in discussing this train of thought.

I think your underestimating the potential intrinsic value of bitcoin.  You compare them to baseball cards,  yet a baseball card can not be traded nearly instantly with high security anywhere in the world.

Bitcoin's value is that it allows you to accomplish something that previously has required the might if an entire nation to do.  Money only has value because there are laws in place that encourage you to honor it's value.   

The very nature of bitcoin however is that the security of your store of value does not depend on expensive anti-counterfieting technology, millions of highly paid bankers, politicians, and the backing of the largest military in the world. See where I'm going with this?

Really think about all that goes into what allows the fairly common event of being able to hand a complete stranger a piece of cloth-paper with some fancy ink on it and that stranger transfer to you a valuable item such as food, clothing, shelter, transportation, or entertainment. That every day occurrence is possible due to the massive financial and governmental industries.

Now think about how much of that store of value is needed simply to guarantee its own value.  Traditional currencies require a massive middleman, imagine what the world would look like if you could utilize all the benefits of a traditional currency at a fraction of the cost.

Now, will bitcoin ever become the sole currency of the world? No, but the feature sets of of a variety of crypto currencies could eventually replace a significant portion of fiat currency.  You can see around you how many fiat systems are collapsing under thier own weight.

No one could have predicted how the ability to send information nearly instantly and with high security anywhere in the world would change it.  I'm speaking of the Internet of course.

Bitcoin simply adds the ability to guarantee uniqueness and ownership to a piece of information, but as with currency, these attributes are highly valuable.  Who knows how bitcoin may (or may not) change the world?

Dont get me wrong. The protocol is a great tech innovation, and will no doubt influence the world going forward.

But it wont destroy banks or replace government issued fiat.

That is my goal. 

It doesn't have to destroy them to have a major impact. Just competing with them would be game-changing.  If Bitcoin or an even better iteration of the technology does eventually supplant fiat systems, all the better.

Okay Einstein, why don't you enlighten us and give us an example of something that is a currency?

What is a definable in objective terms and is constant. Nothing is constant. What I'll charge for my time isn't constant, what you'll charge for your time isn't constant, what I'll charge for gold, silver, copper, bitcoin, lumber, corn, or armchairs isn't constant.

That doesn't work as a definition for money because money by definition isn't constant, its affected by the money supply & money volatility, neither of which are constant. Its also affected by people's psychological want for that form of money.

A unit of account is any method of expressing the worth of account. In other words, I can't use armchairs as a unit of account because 3 armchairs doesn't mean anything to anyone. 3 Bitcoins, however, does, because it means something somewhat standard to most people.

My point Sublime is who cares if it's "currency" or not, if it does the job which people want it to do, then who cares what it is.

So what IS a currency, then, you think? (Just an example will do)

Sure. Just like email didn't replace postal services.

Obviously they will still exist in 5-10 years. But they'll play a much smaller (only marginal) role.

What happens to your dollars when we run out of trees? Seems about as likely.

Funny to see how people STILL don't realize that your precious U.S. Dollars are just as digital.

This is 2013, there is hardly any paper / coin money left (less than 1%). Virtually ALL dollars are only numbers in your bank's computer.

By whom, exactly? :)

By the way, Bitcoin is cash. Digital cash.

They won't, cause that would immediately kill all regular bank&money transactions, online banking, credit cards, paypal, western union traffic, stock markets, everything.

Seriously, wake up. We live in the information age. Every currency and form of payment is digital these days.

bytes, kilowatts, the dollar in 1970,oil, metals they can all  be currency. Because they all can be mediums of exchange, stores of value, and a UNIT of account.   

I am awake. lol  I never implied that the status quo is or was any different. That plug can and will be pulled just as easily. eg. austerity measures, bank bailouts, sanctions, ect..

Who ? The ruling elite .. http://youtu.be/aZYB_IOqeOE

bitcoin is the honey badger of money  ;)

This. It is both everything and nothing at the same time. Thats why it will change the world!

Hi sublime

This unit thing is dragging on a bit, eh? I think I've figured out where your confusion lies.

You assert that Bitcoin is not a unit. Have a look at one definition of a unit, and it seems that you are correct:

http://en.wikipedia.org/wiki/Units_of_measurement

Units of measurement are used to measure physical things which are 'objectively real'. Therefore Bitcoin is not a unit of measurement.

It is, however, a unit of account:

http://en.wikipedia.org/wiki/Unit_of_account

Units of account are used to measure monetary value, e.g. the amount of wealth/value stored in $1000.

Value is an abstract and subjective concept which doesn't exist physically. You seem to be confusing units of measurement with units of account. Some things may fit both definitions, for example an ounce of gold: as a unit of measurement, a 1oz gold coin represents the amount of mass which people have agreed upon to be equal to 1oz. It also has value (an abstract/subjective quantity) and can be used to represent 'the amount of value contained in 1oz of gold'. Value is not physical/objectively real and is therefore subject to change as dictated by the market.

Does this help at all?

EDIT:

Also see here:

http://en.wikipedia.org/wiki/Currency


So by the general/colloquial use of the term 'currency', Bitcoin fits the definition as it is (or can be) used as a medium of exchange.

Bytes and kilowatts aren't scarce.  The dollar in 1970 was just a piece of paper that was supposedly backed by gold.  Of course Nixon let the world know in 1971 that the backing of paper with gold can be undone with the simple stroke of a pen.  Oil is a consumable commodity.  Precious metals are the only form of sound money the world has had before Bitcoin, but now the bankers have scammed the people into using their paper and managed to hoard most of the gold for themselves.  That rules out everything on your list.  Please try again.

Glad I'm hanging onto my VHS tapes.

Sublime is actually right that thinking of Bitcoin as a currency now is the biggest misconception in Bitcoin. The "collectible" thing and many of his other arguments are silly, but he is spot-on that this is a crucial misconception. I reality, at present, something like 1% of Bitcoin's usefulness is as a currency, maybe 9% is as a way of sending money, and 90% is as a store of value based on the future promise of the other two functions (as well as others, like contracts, stocks, escrow, etc.).

Mandatory reading, the best explanation of this I've found on this subtle concept: http://www.reddit.com/r/Bitcoin/comments/1mb27q/bitcoins_vast_overvaluation_appears_caused_by/cc7i6y8 (http://www.reddit.com/r/Bitcoin/comments/1mb27q/bitcoins_vast_overvaluation_appears_caused_by/cc7i6y8)

Without a precise understanding of this it is really hard to understand why Bitcoin is so highly valued today. It's Gold 2.0 and the ultimate investment because of ultimate future promise not yet realized today for reasons that are only temporary. That Bitcoin should be judged on its present-day utility as a currency is truly the most widespread misconception in Bitcoin, and it's a pivotal one to get right.

I've read that post, and I think its the best summary of the current situation in bitcoin that there is. Everyone should read it, especially the 'I think bitcoin is overvalued because I can't spend it anywhere' crowd.

whynotbothmeme.jpg

 ;D I love you guys

Dictionary definition of 'currency'


currency
  Use Currency in a sentence
cur·ren·cy
[kur-uhn-see, kuhr-] Show IPA
noun, plural cur·ren·cies.
1.
something that is used as a medium of exchange; money.
2.
general acceptance; prevalence; vogue.
3.
a time or period during which something is widely accepted and circulated.
4.
the fact or quality of being widely accepted and circulated from person to person.
5.
circulation, as of coin.


In my mind Bitcoin is fast becomming a fully fledged currency.

Especially with news stories such as:

http://www.coindesk.com/netherlands-food-delivery-network-bitcoin/
and
http://www.coindesk.com/shopify-integrates-bitcoin-payments/

Its becoming a currency. It's like an infant. What can an infant do when its a couple of years old? Crap on itself. That's about it.

How about when the infant is 20 years old. It can change the world.

You're just butthurt because you wanted the infant Bitcoin to be a way for you to have a currency on your ebay company. And bitcoin crapped on you. Or rather, the people that you used bitcoin with.

So get over it already.

Let's revisit this thread in 10 years.

i agree more on the subject http://www.youtube.com/watch?v=oHg5SJYRHA0

Sweet video.

http://www.financialsense.com/contributors/ron-hera/fifteen-fundamental-problems-with-fiat-currencies

couldn't help myself