Bitcoin Forum

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Today ,People’s Bank of China has released the report about stabilize Chinese finance ,talking about bitcoin on a paragraph .”From the attribute,bitcoin is not currency in real sense .First ,without national trust support ,legality and compulsion ,its circulating range is limit and unstable .Second ,bitcoin exists scale ceiling which is difficult to adapt to economic development.If bitcoin becomes currency ,it may cause deflation ,preventing economic development .Third ,bitcoin lacks efficient system ,so it’s easy to be over hyped .Thus ,bitcoin price may change drastically so that it cant become currency and medium of circulation .At present ,what accepts bitcoin payment most is marked price by the mainstream currency in the countries .Forth ,with strong replacement ,bitcoin is difficult to be currency .Thus ,bitcoin is a speculation tool not payment tool in physical economy.Those who own bitcoin are willing to collect it rather than purchase other goods .”The word in the report is very cautious ,I basically support its parlance .

Bitcoin is currency
In the report ,it hasn’t said bitcoin is not currency.It only said bitcoin is not currency in real sense .why ?Let us know how to define currency in <Economic principle >.
“Currency is a series of funds that people usually purchase goods and service in economy .There are three function of currency : medium of exchange,valuation unit and value saving. ”
Obviously ,according to the definition ,bitcoin belongs to currency .Because it satisfy all the currency function .

However ,bitcoin is not commercial currency or legal currency .
Traditional currency has two kinds :commercial currency and legal currency .Commercial currency owns inner value ,such as gold .Legal currency has the law guarantee ,such as CNY .Obviously ,bitcoin is not commercial currency or legal currency .It’s too strange .However ,the strangeness has appeared before called “Swiss Dinar ”.

After the Gulf war in 1999,Iraq was divided into two parts :the South ruled by Saddam and the North ruled by Kurdish .At that time ,what currency Iraqi used is Swiss Dinar .Saddam announced to publish new currency “Saddam Dinar ”in 1993,and its citizens had three weeks to exchange their ‘Swiss Dinar ’into “Saddam Dinar ”.People in South began to use legal currency “Saddam Dinar ”from then on ,while the northern citizens didn’t .Therefore ,with limit amount ,”Swiss Dinar ”has lost nation trust support since 1993.It wasn’t commercial currency or legal currency again .More strangely ,after 10 years ,it not only circulates well ,but also becomes an excellent collection .Because Saddam government published cash crazily,”Saddam Dinar ”depreciated crazily .Before America overran iraq ,1 Swiss Dinar could exchange into 300 Saddam Dinar .

Bitcoin is not currency in real sense .
Though bitcoin is currency ,we can say it is currency in real sense .Because it depends on how to define the phrase“in real sense ”

According to the logicality of People’s Bank of China ,the real sense is :1)national trust support .2)without scale ceiling .3)stable price .(4)without replacement
Bitcoin is not a good currency
As individual ,bitcoin is not a good currency .Though it owns three currency positions :medium of exchange ,valuation unit and value saving .But it cant exert them well with the changeable price .Thus ,if bitcoin wants to be a good currency ,its price must be quite stable .
Many people owe bitcoin changeable price to speculation .Actually ,the main reason is not speculation but without a big market .

Finally ,we read the sentence again “Bitcoin is not currency in real sense .We have to admit that the word on the report is cautious .Black in white from official organization should not be miataken .So it hasn’t said bitcoin is not currency .However ,it cant said bitcoin is currency which may cause a new round suds .Thus ,it only says bitcoin is not currency in real sense ,aiming to say bitcoin is not legal currency as well as a good currency at present .”
Maybe you say ,bitcoin has the ability to be good currency .I don’t deny the point .But whether to be a good currency ,practice can check it .

Remaks: Due to language difference, sometimes people out of China can’t know what happened in China quickly. so we are here to make effort to change little, we will translate 3-4 bitcoin news in China to English everyday to help people out of China know what happened and what people thinks about bitcoin in China, If somewhere translate not that good, pls PM us so that we can  correct it.

Thank you for this report. Anyone who expected China to be OK with Bitcoin was very optimistic to say the least


Almost too ironic to be true. USD is no doubt the equivalent to the Saddam Dinar.

All of the issues you have with Bitcoin will work themselves out with time. You can't expect Bitcoin to be all these things you want when it's such a hard thing to grasp for most people and it's still so new.

This basically demonstrates that PBOC is really just taking the same position as every other central bank in the world.

twisted asians

Nice. I wanna read that articles, any link?