"Monetary Base (M0)" term to replace "Market Capitalization"

[solex]

As Bitcoin grows its image is important and the terminology used should reflect traditional conventions.

I suggest that "Monetary Base (M0)" should be used instead of the erroneous "market capitalization" which only makes sense in equities markets. This has been pointed out elsewhere in previous forum topics.

http://en.wikipedia.org/wiki/Money_supply#Example

The amount of fractional reserve lending which takes place in Bitcoin is probably nil, so the higher derivative forms of money M1, M2 etc don't yet apply. Some never will as this is a hard currency.

[thefiniteidea]

In Bitcoin, M0 (Monetary base) would be the 21,000,000 BTC, or currently 10,759,850 BTC, right?

Market Capitalilzation is M0*FX Exchange Rate so it's a little different.

If anything, just to change the name to perhaps Net Market Value, or just 'Net Value In (FX)' would be better?

I dunno, Market Cap In (FX) is fine to me too...

[solex]

In Bitcoin, M0 (Monetary base) would be the 21,000,000 BTC, or currently 10,759,850 BTC, right?

Market Capitalilzation is M0*FX Exchange Rate so it's a little different.

If anything, just to change the name to perhaps Net Market Value, or just 'Net Value In (FX)' would be better?

I dunno, Market Cap In (FX) is fine to me too...

Indeed, the M0 (Monetary base) in BTC is the 10,759,850

To be more precise. It is the monetary base equivalent in USD which is mis-named. So "BTC Monetary Base (M0) in USD" makes most sense for describing the $250 million value.  Market cap is for stocks and shares.

[thefiniteidea]

In Bitcoin, M0 (Monetary base) would be the 21,000,000 BTC, or currently 10,759,850 BTC, right?

Market Capitalilzation is M0*FX Exchange Rate so it's a little different.

If anything, just to change the name to perhaps Net Market Value, or just 'Net Value In (FX)' would be better?

I dunno, Market Cap In (FX) is fine to me too...

Indeed, the M0 (Monetary base) in BTC is the 10,759,850

To be more precise. It is the monetary base equivalent in USD which is mis-named. So "BTC Monetary Base (M0) in USD" makes most sense for describing the $250 million value.  Market cap is for stocks and shares.

I like your 'M0 in USD' term...

That works for me!

 

[Zomdifros]

Agreed. I've used market cap before but when I think of it, it doesn't make sense. Monetary base it is.

[xxjs]

Suggestion: Dollar value of the bitcoin monetary base.

[Melbustus]

I suggested "Aggregate Fiat Valuation" (AFV for short) earlier today in another thread. I think it's better than M0 because what we're really talking about is exchange rate value, not simply the total number of coins.

And note that it's important to use "valuation" not "value" since the former implies a market defined price, whereas the latter seems more like an absolute.

Note also that just using the generic "Fiat" is nice too cuz then it's natural to say something like: "bitcoin surpassed $500,000,000 AFV today" or whatever fiat you choose to denominate the statement in.

[niko]

At least everybody seems to agree that "market capitalization" is not an appropriate term.

I prefer a specific reference to the base or "M0" because there may very well be some fractional reserve approaches built on top of Bitcoin in the future, regardless of how we feel about it.  So, the "monetary base equivalent in USD" or "M0 in USD" seems most appropriate and most specific.

[Zomdifros]

Yeah but that is quite long. I think you can leave out the valuation in fiat or USD part, when you say monetary base everybody understand what you're talking about. Only when writing a scientific paper you could go for the full name.

[Spaceman_Spiff]

Yeah but that is quite long. I think you can leave out the valuation in fiat or USD part, when you say monetary base everybody understand what you're talking about. Only when writing a scientific paper you could go for the full name.

I think the 'in USD' is essential, otherwise I would think you were talking about 11M BTC.

[DeathAndTaxes]

Why not just Money Supply.

Money Supply = Monetary Base * Money Multiplier

Since BTC lacks any significant fractional reserve the money multiplier is effectively ~1.  Having M0 and nothing else seems "excessive" like making categories for categories sake.
"Oh so the Bitcoin M(0) is xxxx USD, what about the total money supply?"  "Yeah that is the same number".

As of the time of writing the Bitcoin Money Supply was BTC10,763,075 (BTC).

The valuation of the Bitcoin Money Supply was:
$252,590,857.80 (USD)
€189,036,724.66 (EUR)
¥23.45 billion (JPY)
£159,908,199.53 (GBP)
231,676,334.77 Fr (CHF)

A chart title could for example express this as "Valuation of Bitcoin Money Supply (in USD)"
http://blockchain.info/charts/market-cap

[thefiniteidea]

Yeah but that is quite long. I think you can leave out the valuation in fiat or USD part, when you say monetary base everybody understand what you're talking about. Only when writing a scientific paper you could go for the full name.

I think the 'in USD' is essential, otherwise I would think you were talking about 11M BTC.

Exactly.

or 186,929,000 EUR
or etc...

Why not just Money Supply.

Money Supply = Monetary Base * Money Multiplier

Since BTC lacks any significant fractional reserve the money multiplier is 1.  Having M0 and nothing else seems "excessive" like making categories for category sake.
"Oh so the Bitcoin M(0) is xxxx USD, what about the total money supply?"  "Yeah that is the same number".

In the proper context, I'm sure if you said Market Cap, Bitcoin Money Supply in USD, or Bitcoin Money Supply, or just Money Supply people would know what you meant. I've used it many times before, myself.

Being specific would be another thing.

I think M0 in USD is the most simple, with the least amount of words/letters, yet most effective and specific way of saying it. Those who don't know what M0 means could be taught something new. Would take a couple seconds to do, no biggie. I think the point of this is to try and promote the use of something like that. Getting away from Market Cap as it's confusing and not very specific.

imho