Bitcoin Forum

A sustainable loop = currency
no loop = investment/commodity

With a currency I can give a token to a man at a market selling produce.  He can use it to pay school fees for his child.  The school can give it to the teacher for teaching, and then the teacher can give it back to me.  Then the cycle starts again.

Bitcoin isn't really like that right now.  Yes, sometimes people pay for things in Bitcoins, but far more often Bitcoins are either 1. held (hodl), or 2. used as a mediator from fiat -> bitcoin -> fiat, or 3. sometimes when we are lucky fiat -> bitcoin -> purchase at one of the few places accepting bitcoin -> fiat. 

There simply is no loop yet. 

Someday it is possible that Bitcoin might make the jump from commodity to currency, and I do think it will happen, but I am doubtful that will happen in 2015. 

That's why everyone keeps on telling to people like you to stop holding it as a commodity, and start using as a currency. As the community will grow it will become more like a currency.

Today also in some exclusive cases i have seen bitcoin working as a currency. 1. I pay my friend for designing a website in bitcoin. 2- He tells about bitcoin to his other friend. 3. His other friend starts accepting bitcoin. 3- my friend pays his friend in bitcoin for buying him a drink 4- i sell marijuana and the other friend buys marijuana from me,  cycle complete.

You can make any cycle like this. Don't be so closed minded, hope for the best in the future.

Bitcoin, as a medium of exchange, has gained a value that can be traded against real world commodities.

Bitcoin, as a protocol, servers a few purpose, those have been never served before.

By the same rationale, there are many former currencies that were used for a time after they ceased to meet that criteria.

I agree with OP.
Right now Bitcoin is considered more an asset than a currency or a payment system, but remember we are at a very early stage.
With future mass adoption I think some will continue to consider BTC as a financial investment, some a currency and some a nicer payment system. Don't force the time.

bitcoin


bit = digital

coin = currency

built to be used as a currency


bitcoin = digital currency


who cares if you hold, trade, invest

it is still a currency

wow

This is like saying
I do not use my house to live in, I rent it out therefore it is not a house


people trade the us dollar and hold it, invest in it, does this mean when they do this it is not a currency

Exactly,Its still a grey area what exactly it is. I still consider it as a cool technology, better than paypal , if we had a fixed price :P

Well OP has a point I agree with. Bitcoin is not big enough to be considered a currency yet.

Also, you gotta remember it's digital. Holding a BTC is impossible, unlike a dollar or other currencies. To be a currency it first needs to be recognized as one by the masses, and most people have no idea what bitcoin is.

I still don't get why people say 2015 is gonna be bitcoin's "great year". It's still very early to say.

bitcoin is a method of payment or transfer, it is not a currency and probably was never intended to be.


Search the white paper for the word currency, it's mentioned once and not when describing bitcoin.

It is possible to get your wages in btc. Its possible to pay your bills in btc. Its possible to buy many day to day items with btc...
The loop is there, it is difficult to do it day to day, sure. But you can say that about many currencies.

If i gave an American some swiss francs or Japanese yen it would be awkward to use it in 'the loop' you describe, but  not impossible - they are still currencies. 

loop = fail

https://i.imgur.com/XMe09.gif

although more than ever you can spend bitcoins with merchants, some big names included like Microsoft, most of these places just use the bitcoin network as a means of getting their preferred currency into their bank account faster and with less % skimmed off the top.

You could argue the same for usd and other currencies. The notes and coins are representative, just numbers on a piece of paper.  
Btc is typically just represented by numbers on a screen instead of paper, but isn't any less real.

Anyway, even if you disagree with the above : there are many people that never use cash, only visa cards. Eg in Norway they are talking about removing printed cash from circulation because 99% of people just use bank cards, is the Norwegian krone or any other currency any less real if the people who use it never have a note or coin in their hand?

The key word in the OP's argument is yet. I agree that bitcoin is not at the point now that someone can receive it for some good and then go buy a totally unrelated good at the market price. We are however getting closer to that point. What is stopping the "loop" from being possible is the lack of merchant adoption and the lack of b2b transactions possible with bitcoin.

We have however seen increases in merchant adoption with many major businesses starting to accept bitcoin, and some with a policy of retaining some of it to spend later and some with a policy to have all their expenses denominated in bitcoin

Yea, it seems that subtelty might be lost in the title of the thread ;p or maybe there's an existential aspect here...

If a tree falls in the woods and no one is around... Is it a person when the sperm meets the egg...
Is a currency a currency before everyone in your own personal day to day life accept it?

btc is not a currency. yet.

And probably it will never be. Why? Because %99 of the people does not give a *uck about btc. They only care about how much value it has in $$$ and €€€, and some £££. People judge btc with the value it has in fiat. It is all about fiat.

It is only good for transferring big amounts of money tho. Which is a good thing only for drug dealers and terrorists :)

Certainly Bitcoin is not a currency, because currency can't be invested, but Bitcoin can be invested. The true value of Bitcoin is not mostly related to the economy policy but the investors and the market. Bitcoin is not mainly used to purchase goods, and the value is not fixed. I think that's the big reason for your question. 

That is because acceptance rate is so low. We are simply not at that stage just yet and it's true there are not many places where you can buy something with bitcoin. We need auction sites like ebay or amazon to change that. If this happens it will be big.

This is extracted from the Nakamoto's paper:


Say again BTC is not a currency and you're hiding the truth.

The loop will only be completed when Bitcoin is taken as a wage. However, there aren't many people willing to take Bitcoin as a wage because moving from something like the US Dollar to solely Bitcoin for survival is going to be very disruptive for someone's life. Only the brave/foolish (depending on your perspective) are going to be willing to accept this level of financial disruption.

There's still a lot of groundwork that needs to be laid before the loop is completed.

lets clarify points mis-understood by previous posts. especially the OP.

currency can be anything. cigarettes in prison, vodka for favours in russia, etc. so currency so not a sustainable loop. currency includes products, favours, money, stocks, shares, commodities, property, assets, etc...

a sustainable loop is a small segment of the umbrella category of currency. and the OP should realize this small segment he talks about is 'money', thus the OP's topic should be that 'bitcoin is not money and this is why'

before the rebuttles come in.. money is not limited to FIAT (federally owned monetary currency) or legal tender or whatever.. money is the main sustainable currency used in any economy no matter who rules it, who owns it or how its used.

now lets move onto commodities.. as i hate that silly misconception.. bitcoin is not tangible or intrinsic (keywords of commodities), bitcoin however is in the realm of being an ASSET currency...

now with that said. bitcoin is a currency, its an asset currency, but it has not got to the point of being treated as money...... yet!

Why is everyone and their dogs feel the need of posting their opinion on such matter ? Still beyond me.

My IQ lowers each time i take the time to read all the non sense some of you post.

Leaving this ''one among many'' fruitless topics.

Fiat money does not circulate by itself, banks get savings and loan them out to complete the loop. The key for circulation is the income. If everyone's income is in bitcoin's form, then they must spend them

I like debating you. 

You say "po-tay-to" and I say "po-tah-to",
You say "to-may-to" and I say "to-mah-to"

Yes, technically you are right, and I wasn't this time. :-)  Though it is nice to see the that the underlying point is something we can agree on. 


very key word


They would work just fine if I travel to Japan or Switzerland.  The loop doesn't have to exist everywhere, but we need a loop somewhere. 


I can call my coffee mug a mugcoin and try to pass it off as money, it doesn't make it so. 

The key distinguished here is that not all commodities are currencies, but all currencies can be commodities.  Or as Franky would more accurately say, "all money is an asset, but not all assets are money"

True, Bitcoin has great potential, and it worth to invest.

How are you going to instantly get $15,000 sent to your cousin Vladimir in Russia from USA?

I always see Bitcoin as a precious commodity, like an electronic version of gold. It can be used for payment but I never thought its suited well for that.

bitcoin is still a currency coz it can be used in paying or sending money to someone

Gold can be used for that, stocks can be used, anything which has value can be used. This doesnt make it a currency.

Even legally Bitcoin is seen as a commodity, not a currency.

Well maybe it's not a currency yet but it takes time for every currency to get in the loop. You're making this statement as if it's over, it's only just starting.

[/quote]

But there is a btc loop, my point was that it was just hard to go through it for btc users, but it does exist (comparing the convenience of someone in usa tryng to use foreign currencies. They need to go to a lot of effort to use it, like btc users do, but doesnt change status of foreign currency as a currency).

Rather than say it's not a currency say what it IS.

An assest.

A way of storing value like gold.

Acceptance is low because people still have never heard what Bitcoin is and those that did (that are not geeks) have a vague idea of it and don't see any real use for it unfortunately. Lets hope the future will make people see its place.

bitcoin is not currency but it's an internet currency.
It's nature is abstract not real

Bitcoin is internet of currency.
It is not currency. Why to invent something there already is?


USD paper bill today is also not Roman Gold coin.
Is something diferent used today for same purpose as that roman gold coin used 2000 years ago.
It is just easier and much cheaper to send 1 million USD to Japan, then one box of Gold coin.


Bitcoin will be used for same purpose as USD was used yesterday.

gold (the commodity) is used to be melted down and used to make products.

gold (the asset) is a store of value.. like the federal reserve use to have vaults full of it. not for production but for the purpose of value storage

commodities are items that are used in production. beef= nice beef burgers. wheat=bread oil=car fuel.. get my point?

so please will people realise bitcoin is not a commodity.. its an asset.

and anything in the world should a few people choose to use it as such, can use anything as a currency.. so bitcoins full description is an asset based currency

Bitcoin or a later 2.0 might very well end up being the Internet of currencies. But it isn't yet. That would be pretty cool though.

Why can't bitcoins be a storage of value and a tradeable currency?

so by your definition paypal and western union are currecny as these can be used to pay for things and send value to someon

They still use banks or fiat. Try sending money without banks or fiat with them.

bitcoin highly involves both fiat and banks, i have spent the last year living from bitcoin hoard, could i do that without my bank or local currency being used....... No

You can do a lot more than you could a year ago. You probably could live on Bitcoin alone if you wanted to bad enough. That's not my point. Bitcoin was designed to be a currency. That's why it's called Bitcoin and not Bitdraft.

i see very little mention of creating a digital cryptocurrency https://bitcoin.org/bitcoin.pdf

Try the title

yes creating an electronic payment method similar to the way cash works in the real world. Not a mention of currency though.

There is no mention of your hypothesis in Satoshi's paper. Your interpretation is wrong.

Cash is currency by definition. What cash do you think the paper is written about?

idk what you say.
Whether it is a currency or not I can buy things with it and execute transactions with everyone I want.

I'm sending that message listening to music with headphones bought with bitcoin. Problem?

But in your case continue thinking that's not a currency… haha  :D

my house is not a place to live in. It's a place to shower, to watch TV, to read, to fap, to sleep to get on my computer, to walk around, to sit, to fuck, to fart, to eat.....

paypal and western union are not currency.. they are just money services businesses.. the currency that western union and paypal "service" is fiat,.,,,,, and its the fiat that is the currency..

a person, computer, business that does the transfering is not the currency... the item/product/data being transfered IS. for instance if i was to give u $10.. does that make me the currency.. no.. i just hold/and transfer the currency without being the currency myself..

so paypal/WU are not currencies. they are just holding/exchange SERVICES

bitcoin the protocol (software GUI) is not a currency, it is a service.
bitcoin the blockchain ledger signed transaction is the currency.

it does not matter for what reason bitcoins are being swapped. or by whom they are being swapped with.. as long as a collective of a few people atleast treat bitcoins as having a value then it becomes a currency.

anything can be a currency as long as people agree it has a value and an ability to swap between different owners

What about people who put their money in a bank and don't spend it until retirement. derp.

There may be a lot more people thinking of Bitcoin as an investment.
But as its utility as a currency (stable unit used to transfer value) increases, its value will increase.

One of the things that makes Bitcoin's value so volatile - if consistently rising in price - is its very limited supply.  $200 million has been spent on equipment to mine BTC, whereas all BTC in existence (and even that which has been lost) has a value of $4.3 billion at current exchange rates.  (These exchange rates are not very deep, subject to some level of manipulation by holders of BTC, and also do not reflect lost bitcoins.)

This very tight money supply does give bitcoin an edge in retaining value.  However, it is a serious impediment to adoption as a money supply.  In order to be currency, a coin needs to be in high circulation.  It needs to have acceptance and be in usage.  While the bitcoin money supply is as tight as it is, this is very difficult for bitcoin to accomplish.

The Federal Reserve of WIP has a moderately loose target for the ease of the WIP money supply over time.  A moderate level of inflation will spur investment and usage of WIP.  For example, for inflationary reasons, I would greatly prefer to keep my WIP with the CBIP (the first accredited bank in the Federal Reserve of WIP trading system, and independent of the Federal Reserve of WIP), at a moderate interest rate, than to keep it directly on the ledger without any interest rate and lose value directly to inflation.

Secondly, by having a central policy that enables lending of WIP at reasonable interest rates - a central goal of the Federal Reserve of WIP - it can be one of the only coins actually available to borrowers who have some productive usage of them.

In both of the above senses, bitcoin currently fails.  While it is undoubtedly a currency in which the BTC remittance network is denominated, as a practical currency it has a difficult fight for adoption.

This difference will be easier and easier to see as our policies unfold.

We welcome any of your thoughts in the meantime.

Best regards:

Chairman of the Federal Reserve of WIP

WIP

http://images.sodahead.com/polls/000480189/polls_bad20toaster201_1439_288379_answer_3_xlarge.jpeg

The only reason that bitcoin's price "should" increase is due to its limited supply.

However, this isn't relevant until 2140 or so.

Not at all. If the demand outstrips the supply the value should go up also. Imagine what will happen when the bitcoin reward gets halved and there's quadruple the amount of bitcoin users as there is now...

It is possible that bitcoin will never become a full-fledged currency. But judging by the latest news in the next few years the role bitcoin as a means of payment will gradually increase.

It is funny that the first "real" crypto-currency, that can actually claim to be a "real" currency in that it is exchanged in a loop, might not be Bitcoin but the crypto of Ecuador.  Until now they have been using the USD, but now they will have a blockchain currency.  One can only assume that it might be locked in to the USD, which will be very interesting indeed.  The ramifications of having a digital blockchain USD equivalent, might really shake up the the cryptosphere. 

http://cointelegraph.com/news/113208/ecuador-officially-launches-its-own-e-money-system

Of course there's a loop. I can buy something from you, you can buy bitcoin mixing service from bitmixer and then bitmixer can pay me for advertising.

"I decided to fact-check myself and I (found) that Bitcoin was actually larger than some national currencies ... We've been moving up the list, if you look at the total value of all the bitcoins in circulation versus the total value of other currencies, we're up to 20 or 40 national currencies that are smaller than Bitcoin. As Bitcoin gets bigger and we move up that list, we're on the path to Bitcoin being a serious world currency." - Gavin Andresen

There are many very small currencies that are controlled by very small countries. I wouldn't say that it would be a very big feat to be larger then these currencies.

What would be a meaningful feat would be to grow enough so that bitcoin is larger then more major economies and currencies.

Right. That's what he said.

Yeah..!! I agree.!! I take BTC as currency n I use it like one.!

where does it say it is a blockchain currency?

 I Believe in bitcoin as a network and a currency because its so veristile and amazing blockchain it can be used for danm near anything i just wish it was 2011 again and I was a smarter person back then lol but wishin aint goin make it happen hehhe heres to a great 2015 for all you bitcoin involved folk !!

Yeah in reality you are right, I just like playing devil's advocate sometimes..... along with a little LARPING at trolling.
If paper money backed by 1's & 0's on some banksters screen is used as currency........

One thing

It's digital currency

By same logic as OP, many government issue banknotes/bills have not been currency for a long, long time, except in isolated communities. They just go in and out of banks and tills, get recorded in ledgers whether handwritten or electronic, the value maybe forwarded by check or wire to head office. Then forwarded back as paychecks. But the specific pieces of "currency" may never complete a loop. If that is the definition, then currency isn't currency. If all we're concerned about is the value completing the loop, then bitcoin is part of many loops.