Bitcoin Forum

In response to a piece by Mathew DeBord (http://www.scpr.org/blogs/economy/2011/12/01/3923/commenting-commenters-bitcoin/), who argues that bitcoin was "a traded derivative of other currencies". Of course I argued against that, because of all things, bitcoin surely is not a derivative of anything. I answered that bitcoin was more like a banana (commodity) (avoiding carrots here).

DeBord replied to my comment arguing Bitcoin was probably not a banana: "A banana would exist without currencies. I don't think Bitcoin would." (I again argued against that)

So the old "what is Bitcoin? a commodity? a currency? ..." popped up and I think I found an expression that fits bitcoin quite well:

Bitcoin is Virtual Scarcity

I think that fits nicely, because it avoids to name some "subject" that bitcoin might be (a subclass of), but describes bitcoin merely by naming one of it's characters: scarcity.
It also fits nicely in my mind, because "virtual" and "scarcity" dont usually work together well (because information can be copied freely) and that shows how much of a ingenious invention bitcoin is.

One might add that ownership of this Virtual Scarcity is transferrable through a decentralized network, but not much more is needed to describe bitcoin, right?

What do you guys think?

I think these few words describe what bitcoin is pretty good. I was always refering to bitcoin as a virtual commodity. Maybe I should change my words now.

Digital scarcity.

Secret codes.

The banana was genetically engineered for human consumption. While it is neither limited nor scarce, it's value was created by human need. We need a cryptocurrency. Bitcoin is only as limited as we allow it to be based on its divisibility. So yeah, bitcoin is like a banana.

I like "fixed digital currency".

fixed>scarce: since there are plenty of bitcoins to go around if it becomes broad based whereas scarce implies not enough.

digital>virtual:   To me virtual gives an air of temporary or fleetingness

currency:  i think we need ppl to understand that Bitcoin is money.

just my two cents. :)

Bitcoin is a commoditised service.

hey lonelyminer. it was nice meeting you in Prague.

"commoditised service" seems to be quite an esoteric expression. My dad wouldn't understand and - quite frankly - I have my problems with "commoditisation", since I never saw that word being used anywhere else.

It might well be that commoditised service fits very well and that's what it is, yet it's not a very suitable term for marketing (to "normal" people) purposes, let alone explaining what bitcoin is.

hmm, I'm not a native english speaker. It seems "scarcity" has negative connotations. Is there a synonym that could be used? Seldomness, rarity or something?

scarcity implies "fixed", doesn't it? I don't like "fixed", it sound like "shooting drugs up your arm" in my ear because of the german "fixen" ;)

I agree on "digital" being somewhat better than "virtual", which sound like "vapor" indeed. Digital Scarcity? That looses something compared to "virtual", though: the fact that "bits of information" (which are abundant and cheap by their nature) had to be "virtually made scarce" to engineer bitcoin (they are not _really_ scarce, only _virtually_)

Simply put, Bitcoin is a superimposed quantized deflationary value representation.

Yeah, cool. That'll sell it to grandma!

She would ask you to say that with a mouthful of cookies.

well, i'd say your English is pretty good.

i'm not sure there are any sovereign citizens who want a scarce currency.  people want enough if not more to give them a good life.  in fact, i'm beginning to think the masses like the inflation the CB's are providing as no one wants any pain.  they just don't realize the long term implications.

so "fixed" in this sense means enough to satisfy the masses but only a certain amount and no more.  i think the public would buy that. 

I fully expected this to be an off topic thread. 

Hello molecular, the pleasure's all mine.

I apologise, I'm terrible at marketing, I'm more of a scientist than a businessman. But maybe if I attempt to explain it in my words, someone else can build up upon that and make it marketable.

Bitcoin is somewhat similar to IP addresses. There's only 2^32 IP addresses (IPv4), so they're scarce. They're more-or-less fungible, i.e. it does not matter which one you have. They only have value because they allow communication (i.e. provide a service), they cannot be consumed. They are only defined as an abstract concept, and their functionality is upheld by a mix of consensus and the network effect. They can be traded to a certain extent. They are not very usable as money, but they are a precedent for commoditised service that has a purely abstract basis.

lol, the problem with that is that printing money doesn't increase wealth. Its simply theft (from the people that have USD), because it decreases their wealth.

More and more people will realize that and wake up to the fact that they have all been scammed, bigtime! They will then demand "good money", which will either be gold or silver or something backed by gold/silver or bitcoin ;). Some might demand bananas and/or carrots.

lol, who of you guys twittered this: https://twitter.com/#!/Beautyon_/status/142955342467309568 (https://twitter.com/#!/Beautyon_/status/142955342467309568)

I say: digital gold - everybody can understand that

I agree, "digital gold" is really good. captures many of the features.

That claim is also more than a little grandiose. Sure, gold is a commodity, but Bitcoin is nowhere near that valuable.

Noone said that bitcoin was as valuable as gold. It's not about quantities, but about qualities.

You can also call it digital poo. It's not about quantities, it's about qualities.

Digital copper?

As far as what type of non digital commodity they are “closest too” I like the simile “Bitcoins are like baseball cards” because they are basically artificially rare collectible “things”

Now taking this one step further I have heard them referred to as “collectible cryptographic anomalies” or just “cryptographic anomalies” – and I rather like that.

the amount of poo you can produce is not really limited.


gold is a very clear concept for everybody and it is a very positive one.

cryptographic anomalies, Virtual Scarcity, superimposed quantized deflationary value representation - you throw that at a normal person and they will call the doctor.

I would more emphasize the transport layer:

Bitcoin is a virtual scarcity you can send with a mouse click.

emailable precious bits

hm, precious bits

I really like the word precious.

Precious bits - mined at great expense of electrical power from the great sea of hashing possibilities!

I'm going to be using this phrase. :)

nailed it.

'virtual scarcity' is open to the interpretation that it's not quite scarce.

I prefer something like 'Mathematically ensured scarcity' 
or 'Mathematically enshrined scarcity' 

Perhaps bitcoins are 'Globally Ensured Mathematical Scarcity'  or 'Deals In A Money Of Network-Distributed Scarcity'

(sorry.. couldn't help myself)

My PRECIOUS!

There's also the expression of "sieving" already used (integer factorization, e.g. "number field sieve").

Precious bits - sieved at great expense from the vast deserts of the nonce space.

of course, having "mining" in there is a plus.

So, is there anybody going to produce My Precious - real gold ring with private key engraved on inner side of the ring, with public key on the outer side?

Casascius?

I suppose (most) the alternate block-chains would be considered semi-precious.

I like the fact "precious bits" seem to fit nicely into gaps in the Fintrac Guidelines (http://www.fintrac.gc.ca/publications/guide/Guide2/2-eng.asp#s2). Until now, I was assuming that a "Money Service Business" would be the closest analog. (Though I fail to see how "alternative money remittance systems, such as Hawala, Hundi, Chitti, etc." can be reasonably included.) Precious Bits neatly fall outside the scope of "Dealers in precious metals and stones", at least until the law/regulations are changed to include "bits" (with the clarification that copyrighted works are not considered precious because they can easily be copied).

Edit: Which bits, specifically, are precious? Only the block-chain (and some novelty addresses) are computationally intensive. The private key (for a funded address) is what lets you move/create/destroy/merge/split funds precious bits.

I'm not sure such a renaming would change anything regarding how bitcoin is handled legally. Interesting thoughts however.

The private key is just a random number.
The public key is just calculated from the private key.
The public key address is just calculated from the public key.
Vanity addresses are just randomly generated public key addresses that happen to match some pattern.

The "precious" part, the part that takes all the time/effort/energy to generate, is the hash of the block that meets the difficulty criteria.  For example:

000000000000055a165e49e80b04a7b5df29bedd7bdb23fec6d5d42052d3ad86

Getting all those zeros to happen in what is basically a random number is "hard"  so this is a "precious" number that was created by the system and the miner who found it was paid 50 BTC for their efforts.

So I contend that the block hashes are the "precious bits" or "cryptographic anomolies" that are being "collected".

I feel I may have broken the analogy by trying to pin it down on specific bits. The Block hash is freely copied. It only proves that a specific block has not been changed by a malicious party.

I contend the ability to manipulate coins represented by the block-chain is precious. Therefore the private address corresponding to a funded public address would be precious. Such 'bits' have no value without the block-chain, which is what makes them "precious". Also, not all private addresses are precious: those corresponding to empty addresses are worthless.

Well at any rate we all seem to agree that "precious bits" sounds cool and does seem to fit the system (somehow).

I agree. It also sticks (in my head, at least)