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Title: The Money-ness of Bitcoin Post by: bitcoiner32 on April 04, 2013, 01:53:44 PM Prima facie, bitcoins possess all the qualities required from a money (a generally-used medium of exchange). They are perfectly homogeneous, easily cognizable, conveniently divisible, storable at practically no cost, and imperishable. Also, they seem to be fully shielded from counterfeiting. In addition, because they exist as a consumption and investment good, they are appraised on their own, thereby satisfying the Misesian regression criterion for the free-market inception of a medium of exchange. However, in order to become a viable alternative to existing monies, bitcoins must generate a sufficiently large demand so that their usage becomes generalized. Without the certainty that they can be transacted for any other good in the economy, a demand to hold them as money could not develop. It is with respect to their capacity to become and remain commonly used that bitcoins suffer from a relative disadvantage.
http://mises.org/daily/6399/The-Moneyness-of-Bitcoins Von Mises always has informative articles. Glad to see they recognize the strength of bitcoin as money. Title: Re: The Money-ness of Bitcoin Post by: benjamindees on April 04, 2013, 01:59:32 PM Money isn't "a generally used medium of exchange". That's a currency. Money is future value. Money is a medium of exchange that will be used in the future, not just now. Money was the gold in the vault. The currency was the vault receipts that were actually used as a medium of exchange.
Bitcoin is a currency, because it is used as a medium of exchange. It's not clear yet whether Bitcoin is "money," because there is no guarantee that the next generation will use it. See this? None of these are "money," because none of them lasted longer than a single generation. http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2013/03/Reserve%20Currency%20Status.png Title: Re: The Money-ness of Bitcoin Post by: bitcoiner32 on April 04, 2013, 02:36:51 PM The "money vs currency" thing is basically semantics. Whatever you want to call it, he defined his terms and then explained why bitcoin qualifies.
The larger point is that the much-respected Von Mises institute has basically endorsed the concept of bitcoin. Title: Re: The Money-ness of Bitcoin Post by: Tonko on April 04, 2013, 10:33:21 PM The larger point is that the much-respected Von Mises institute has basically endorsed the concept of bitcoin. Even larger point for me is that they basically say it can't substitute material fiat any time soon, or perhaps never. Quote In conclusion, virtual monies, of which bitcoins seem to be the most perfected specimen up to date, do not allow acting individuals to manage the uncertainty of the future as well as material monies do. They could serve to intermediate exchanges among those who invest in the technology that creates them, stores them, and transfers them. Nevertheless, they could never achieve that degree of universality and flexibility that material monies carry with them by nature. Thus, on the free market, commodity monies, and presumably gold and silver, still have a great comparative advantage. |
