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I love and use bitcoin regularly.   Prior to discovering, bitcoin, I could be considered a gold/silver bug.  I'm convinced about the quality of the aforementioned metals but would like your opinion on bitcoin. 

Is it money?

For any medium of exchange to be considered money, it must possess the following qualities:

1. General Acceptability

The material of which money is made should be acceptable to all without any hesitation.

2. Portability

Money should be easily carried or transferred from one place to another.

3. Durability

Money material must last for a long time without losing its value.

4. Divisibility

Money material must be easily sub-divided to allow for the purchase of smaller units of the commodities.

5. Homogeneity

Money should be homogeneous. Its units should be identical; they should be of equal quality and physically indistinguishable.

6. Cognisability

Money should be easily recognized.

7. Stability

The value of money should remain stable and should not change for a long period of time.

8. Malleability

The money material should be capable of being melted and put to different forms. Gold, silver, copper, etc., have this quality.

The precious metals, gold and silver by and large, possess the above mentioned qualities of good money material. It is because of this reason, that these metals have been used as money for a considerably long period of time.  Government printed money, on the other hand, is not very durable(tears easily), it is not recognized outside of specific borders but might be be capable of being put to different forms(toilet paper)

Is Bitcoin money?

Bitcoin lacks numbers 1 7 and 8.

I don't know that malleability is really a big factor now that we are in the digital age.  I think we live in a world that deals with a lot more intangible objects than thousands of years ago when gold, silver, etc. were used as a form of money. 

I think it fits 1, 7, and 8 as well.

1.) You use a debit card right? Plenty of people accept online payments today. I think the vast majority of people do... Bitcoin is made of the same binary data type.

7.) Stability isn't inborn to the material used in money, it's a relative factor compared with the scale of the user base. The value of gold is determined by social networking (bartering is social networking when you scale it to an economy). The stability is affected by supply; Bitcoin does have a fixed supply.

8.) Bitcoin can't be melted but it can serve other purposes; colored coins for instance just being one other purpose. The root of why number 8 is important isn't the melting of metal, rather the practical use of precious metal outside of money. Bitcoin doesn't have manufacturing use outside of money but it does meet the root requirement that the material be useful for a purpose outside of money.

I thought about this last night, and I think it's important everyone understands this.

You started with "I know gold and silver are money. Is bitcoin money?"

The question is, why do you KNOW gold and silver are money? What makes them have VALUE to YOU?

It can't easily be spent, you won't know how much in spendable currency you truly have until someone offers to pay that amount to you.

It cannot be easily split into smaller pieces of currency, so owning it isn't feasible for the regular person.

It cannot be spent readily, (how many grocery stores accept gold as a form of payment?)

Stability, well it's gone from very mediocre to extremely valuable due to the world economy in the past 8 years.

So you have to ask yourself, why is GOLD money?

Gold is money because we know it is limited, it has rarity, and because we say so.
Sand is NOT money because it's too plentiful, it is easily obtained by everyone.

Bitcoin, IS money because we say so, just like gold.
But it is better than gold.

Like gold, Bitcoin has rarity, except we know exactly how rare it is (the total maximum number of bitcoins.)
Like gold, it is not easily spent at a grocery store, but that can change, unlike gold, which will not be accepted by your local grocery store.
Like gold, even though you can't eat it, or make a viable shelter out of it, it has value because of it's rarity. It's a "because we say so" store of value.

Unlike gold:
You can store all of it you own in a secure location in your house.
You can spend part of the amount stored in your house, and keep it safe. (You can have it all on a USB, put some on a phone, and if your phone is stolen, your phone has a secure password and you can withdraw the bitcoins from a backup of the phone's wallet, so you don't actually lose your money.)
There is no weight to bitcoins, so you can have an unlimited amount in your possession.


Although blockchain would like to use the term, "Be your own bank", I don't agree with your usage, but it does apply to bitcoin.
My usage of "Bitcoin: Be Your Own Bank" is more like,

You can store ALL of your bitcoin in your home, and withdraw and deposit as you feel like. So the trip to the bank is as simple as taking out the USB from your safe and putting it in your laptop to send some money to a hot wallet. Then returning it to storage.

So with bitcoin, you really can BE YOUR OWN BANK!

Thanks.

Bitcoin certainly isn't money according to this definition and it never will be.  It cannot melt and therefore fails 8.

However, I don't think this concept of "money" is interesting or useful.  May I introduce a related but far more relevant term: "minney".

A "minney" is anything which is used as a medium of exchange, store of value, and unit of account.  The "success" of a minney is simply a measure of the degree to which it is used for these purposes.

Bitcoin is certainly a minney (as are many of the altcoins) but is not a very successful one at present.  I believe it has the potential to be a very successful minney in the future.

Why must money melt? Ask yourself the purpose of the requirement and then ask if Bitcoin fulfills the reason behind the purpose.

Bitcoin does fit the reason behind the purpose.

wait, who made up those criteria? Because according to those criteria, USD is not money. Neither is pretty much any of the fiat currencies.

When I was in the Amazon jungle, paper bills were worthless, but there were only two units of exchange: alcohol & coca leaves. If alcohol is consider money, then certainly bitcoin can be considered money.

money is different than currency

people get these two mixed up

currency is like fiat, usd

money is like gold, silver

i would say bitcoin is money not currency

I don't agree with most of those requirements and your interpretations of them -- especially #8.

Gold and silver doesn't meet requirement #1 so I don't know why you are even posting.

I think Bitcoin fails #1, #7 and #8, but no money is universally accepted, the necessity of #7 is a matter of opinion, and #8 is ridiculous.

I don't mind if someone doesn't consider Bitcoin as money because it is not universally accepted. At least they have a legitimate reason.

Regarding 8 (Malleability) - 174,100,000,000 grams of gold have been mined. Total future BTC will "melt" into 2,100,000,000,000,000 satoshis. It's not a straight comparison (a gram of gold can obviously melt down further) but I'd suggest Bitcoin trumps gold for malleability.

I reject the premise of defining "money" in terms of concepts such as "fungibility" and "transportability".  Certainly, the study of such properties is useful (indeed, such study guided satoshi in the design of Bitcoin), but they do not constitute a satisfactory definition.

Whether or not Bitcoin is money will not be established by such definitions.  Instead, time will tell us if Bitcoin is money, and if so, the definitions that claim otherwise will become obsolete.

Exactly my point.  USD or Fiat is not money.  They are currencies

My biggest question was always how will the "unbanked" use bitcoin without a smartphone?

I was drawing a parallel between tangible "money" which must "melt". I broke the requirement down to the basis for why it is a requirement to "melt" and came to the conclusion that money must serve a secondary purpose besides just that of money; it must be valuable when used for an actual purpose. Gold is used in manufacturing as a secondary function and melting is an industrial process. Bitcoin can serve a multitude of additional purposes besides that of money; it can be used for legal contracts, property deeds, voting, etc... Bitcoin and gold are both useful when not being used as "money" and so Bitcoin fits the purpose behind why reason number 8 was determined to be necessary.

I agree that fungibility and transportability are benefits, and I think Bitcoin will be considered real money.

That list is not the list of fundamentals, as many people assume.

The root premise for money is: a minimum of 2 parties agree that one object (abstract or physical) can be used as a medium of exchange (maybe you might think that cryptocurrency is the first abstract currency, but it is preceded by knots in ropes, gravings on a wall, or marks in clay)


So that can go from two people who are butterfly collectors agreeing on using their shared interest (butterflys) as an exchange item, all the way up to something like gold or bitcoin. And it's all subjective, I don't care what anyone says. Whatever "objective" property one medium has that another doesn't isn't necessarily eternal. Gold could be synthesized using fusion, or made less chemically stable with a different isotope, or made less physically verifiable with tungsten, or displaced from monetary use due to it's physical properties being more highly valued for some specific industrial or commercial use. Bitcoin could have it's persistance affected by widespread EMP, draconian ban campaigns or the development of a successful attack on the SHA-2 algorithm.

State of the art technology has always been used to enable different monetary paradigms; precious metals, printing techniques and cryptocurrency are a testament to that. Cryptocurrency may well not be the last time this will happen.

Gold and Silver are not money at least not anymore.   They fail #1 on your list.

What % of merchants accept gold and silver as payment for goods and services.  Please compile a list.  Would that % constitute "general acceptance" to you.  The number and scope of merchants which accepts Bitcoin is incredibly small but is far larger than gold and silver.

Is Bitcoin "money"?  I don't know I guess it depends on who's definition you use (there is no universal standard) but I think based on the properties you laid out in the OP that Bitcoin is closer to the definition of money than gold and silver are TODAY.  Now 500 years ago yeah Gold and Silver were money.  Maybe in 500 years they will be money again but they aren't today.

Of the eight properties you described Bitcoin is only inferior to gold or silver on one of them (#7) and for a currency that is less than six years old that isn't too bad.  If Bitcoin continues to gain traction and the markets get deeper and more liquid I would expect that #7 will improve as well.

Bitcoin is not useful as money.   Neither is gold or silver

Money needs to be elastic in order to be useful in modern economies.   As economic activity expands,  the money supply needs to expand to meet demand.   Liquidity is one important aspect of money.

Read about Modern Money Theory L. Randall Wray if you want to know more.   Money should be approached as stock and flow rather than commodity

If you can divide the unit "1" infinitely, I can assure you that "1" is very liquid.

You forgot the most important property - scarcity. Gazillions of crypto 'currencies' can be created at basically no cost, having identical properties and serving the same function as bitcoin. Infinite digits on a computer screen, yeah sounds a little like the USD.
Gold on the other hand is limited in supply and unique in color, shine and other physical properties.

We've already got enough properties to ensure that nothing satisfies the definition.


Stating that a clonecoin can serve the same function as Bitcoin is like claiming that "telti" can serve the same function as the word "water".

The currency so far no one can do to guarantee its value, is a kind of no practical credit support of virtual currency, the real value is that we all believe it, it is worth, you would not believe it, it is not to be worth a hair.
Of course, the selling point is the hype "no inflation, but inflation", not the absolute a limited number of currency is not, because the original price can not be any guarantee any price changes in people's confidence, this is tantamount to saying inflation changes can occur with any currency as it is difficult to control.
Gold without monetary function at least retain ornaments and metal functional value, then it can be used in any currency exists in society through the value exchange and to become a real money.
However, any pure forms of credit are defined virtual currency amount, whether it is a national currency, electronic money or the so-called, must have certain amounts of real wealth can start to get the real value into the form of the credit guarantee and credit assignment, can have the value true. Any lack this injection value process and obtains the guarantee of the so-called credit money, credit money is 0.
As long as the currency is not any social entity with economic credit (such as a government) for the injection of the actual value and make a formal guarantee, will just be a legal credit only equal to 0 of the nominal currency. Any country may take the form of electronic money to improve the currency put false function and other management functions, but this kind of electronic money purely itself can't from a credit currency itself attributes and forms, such as the dollar or yuan can take the form of this kind of electronic currency issue management, but this is not equal to said the dollar and the renminbi itself from an actual credit guarantee forms and assignment procedure becomes the real value of money.
A certain amount of any currency, can be diluted decentralization in more number of other "non equivalent wealth assignment nominal money" and suffer devaluation, for example, said the central bank from issuing currency to the market to use; and in another logic, any fixed number of credit currency dominance value wealth assignment, also can in the reality of the change and change, when it abandoned its itself was the original credit support, the actual value of the wealth of the credit right is terminated, for example, an economic expenditure on the bankrupt country, even if the quantity of money is fixed, it will fall the bottom, because of the currency itself has lost the original normal amounts of wealth dominating right. When a currency is not a formal political entity assignment in legal form and process, its value can only be equal to is empty.

No other coin can be Bitcoin, though, in the same way that tungsten isn't gold. Bitcoin has its own data, its own protections, and its own rules. You can't create an infinite supply of bitcoins (that is, you can't print yourself to a higher %total ownership), and I don't think you can lump all cryptocurrencies together for the same reason we don't lump all metal together. They all have unique properties and uses.

If you mean 'money' as a payment instrument, then, yes, it is.

Fuck these "qualities".

Gold and silver supply is centralised, the market totally controlled and transactions highly taxed by states.

A money that is not a cryptocurrency is worthless to me.

bitcoin is money

yeah it lacks 1 and 8. but 1 will come in due time and 8 well thats just not possible with bitcoin ya know since its a crypto currency.

but to me money is something that has value and will hold that value .

this is bitcoin

It might even come down to two things?

1. Hard or impossible to counterfeit.
2. Believed to hold value.

It helps to be fungible, scarce and portable; but there have been types of money in the past that did not have these additional characteristics.  Bitcoin is certainly hard to counterfeit. While not universally accepted to hold value, it is more broadly accepted than almost any world currency.   

Bitcoin is money,it been stable as a value and is going to stabilize more because people believe in it,also bitcoin code can be printed on paper ,as most of our money this days are made of paper.

1. Not yet (but growing by the day)
2. Yes, Definitely
3. Yes, Definitely
4. Yes, more than anything (infinitely divisible, as the 8 decimals can be increased if needed)
5. Yes.
6. Yes.
7. Not yet (but that's to be expected of a technology this new, considering the circumstances it is relatively stable.
8. Irrelevant, if something serves a purpose and serves it well, i don't care about what it can't do. As long as it does what it is designed to do.

All in all, it looks good for bitcoin, and i'd say bitcoin could become a form of true money, and it could even outperform gold and silver, but it's not yet there.

1.5 billion persons have no bank account but they do have internet and smartphones.

It will still not include everyone, but at least it will reach a large population of persons who have never been able to use banks.


no, when the harvest is good and production is high, everyone's bitcoins will become worth more, and gold and silver will become worth more. Because the amount of gold, silver and bitcoin is stable, but the amount of products available on the market is not. So more products available means a lower price, and less products available means a higher price.

There's no need to inflate currency. That's only the propaganda the capitalist government wants you to believe, so that they have an excuse to keep up the inflation, and making you believe it is a good thing. But inflation is just a way for the government to steal away your money, and the money of everyone else! By inflating the currency by 2% a year, they are stealing 2% of the national GDP per year, on top of all the taxes they already demand.

All currencies lack 1 if you're applying this universally. Some people find no value in money or luxury resources at all.

Bitcoins lacks 7 and 8, although 7 can be attained given time

I think I've come to the conclusion that these kind of debates are meaningless with Bitcoin, it was designed to be a currency, therefore it is and it is now also being used as a currency, the arguments about Bitcoin I've seen in regards to whether it's a currency or not usually revolve around what people like about a currency rather than whether it actually is one.

Simple Explanation of my answer: If people use it to trade with, it's a currency

http://dictionary.reference.com/browse/Currency?s=t

This makes sense to me. Anyone saying bitcoin is "not a currency" definitely has an ulterior motive (they probably feel threatened that bitcoin will take over and their own portfolio will go down). As long as you can by "stuff" with bitcoin, it remains a currency.

Thats not what liquidity means.   Liquidity means you want the money to flow.   If people are saving you create inflation so they spend it.   Thats why we have Central Banks

The duck test:

If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck.

Its sold to speculators as a replacement currency. But its useless as curency because you have to "mine" it.

If you need several trillion dollars to prevent some banks from going insolvent to avoid another Great Depression.   Easiest way is just to magically make it appear and put it on balance sheet as debt.

Can't do this w bitcoin.   Or gold for that matter.   Study the Great Depression for god's sake

I don't know if somebody already gave that answer but to me gold and silver are not money they are (metals obviously and) commodities.

Eventually we can trasform gold or silver into commodity monney by making for example gold or silver coins.

Yet again, all you're doing is listing the things you don't like about it and claiming because it doesn't match your preferences for a currency it isn't a currency, that's what these arguments are really about, if people buy stuff with it and trade it amongst themselves for goods or services then it is a currency, whether you like it or not.

The only difference between currency and money is that money can be used as a store of value, because it is backed by something. Take gold for example : it can not be created out of thin air and is scarce. Additionally and due to the previously stated properties, it has been proven again and again to be a very strong hedge against inflation, due to the fact that the total amount of gold is limited, and that is publicly known. Bitcoin has those properties too: it is scarce, hard-limited, it cannot be created out of thin air, so it must follow that due to its scarcity and acceptance it will maintain its value against inflation, that is, as long as people trade in bitcoin.

Just as the old dollar was backed by gold which was redeemable via a bank, the bitcoin is (sort of) backed by the processing power that was spent to create it, and the knowledge that is scarce and cannot be inflated. It's not a rock solid comparison, but it is an example against unbacked fiat currency nevertheless.

So bitcon, and the old dollar, and gold, and precious metals etc can be considered money. They have all the properties of currency ( interchangeable, every unit is worth the same, divisible, durable etc etc) but with the added bonus of real value backing. Fiat money in contrast is backed by no real commodity, so it's currency, not money.

All the above is my opinion and my opinion only. So take this post with a pinch of salt.

Bitcoin is way better than a simple money or currency. It actually make them obsolete.

Cryptocurrency is freedom in the world of FIAT.

Bitcoin can and should be used as digital/internet currency

How we can trade with Bitcoin?

Go to coindesk.com and read.

No other coin can be Bitcoin, though, in the same way that tungsten isn't gold. Bitcoin has its own data, its own protections, and its own rules. You can't create an infinite supply of bitcoins (that is, you can't print yourself to a higher %total ownership), and I don't think you can lump all cryptocurrencies together for the same reason we don't lump all metal together. They all have unique properties and uses.
The value of money should remain stable, but the value of bitcoins is unstable.

You're right，Bitcoin value must be stabilized before it could become a currency.

It depends on how you look on it !
If you look on Bitcoin as an instrument of payent (on of main role of money is to be payment instrument) when it is money, but on the other hand it is so unstable and the prices change as if it was shares of the company !