The Internet is Changing the Very Definition of Money

[pereira4]

Our current money was never designed with the internet in mind. We are dealing with deprecated forms of money in the modern internet era, this is why Bitcoin is the objective superior way to move and store value. Those that get it now, will reap the benefits later, this is pure physics.

Bitcoin may be superior to our current money, but will that be sufficient to succeed? Money evolves - we have had the gold standard, Bretton Woods system, floating exchange rate, etc. Bitcoin may be the flavour of today, but we can't be sure it will stay that way.

There's only one way to find out... wait and see. I don't personally think a new coin will come and dethrone Bitcoin, it's network effect is way too powerful. What could potentially happen is the abolition of cash and all transactions done digitally, either in the old way or with a government issued digital currency to compete against Bitcoin, to keep their fiat scam going.

[Amph]

Our current money was never designed with the internet in mind. We are dealing with deprecated forms of money in the modern internet era, this is why Bitcoin is the objective superior way to move and store value. Those that get it now, will reap the benefits later, this is pure physics.

Bitcoin may be superior to our current money, but will that be sufficient to succeed? Money evolves - we have had the gold standard, Bretton Woods system, floating exchange rate, etc. Bitcoin may be the flavour of today, but we can't be sure it will stay that way.

actually bitcoin mania, was surpassed long time ago in the doge era with the 1200 peak(you can call it doge mania probably...) now bitcoin is a bit abandoned, and no one care about it anymore(minus its niche user fan base), so another step toward a new evolution of it, could help its life to grow

[freeyourmind]

Our current money was never designed with the internet in mind. We are dealing with deprecated forms of money in the modern internet era, this is why Bitcoin is the objective superior way to move and store value. Those that get it now, will reap the benefits later, this is pure physics.

Bitcoin may be superior to our current money, but will that be sufficient to succeed? Money evolves - we have had the gold standard, Bretton Woods system, floating exchange rate, etc. Bitcoin may be the flavour of today, but we can't be sure it will stay that way.

There's only one way to find out... wait and see. I don't personally think a new coin will come and dethrone Bitcoin, it's network effect is way too powerful. What could potentially happen is the abolition of cash and all transactions done digitally, either in the old way or with a government issued digital currency to compete against Bitcoin, to keep their fiat scam going.

If the government issued a digital currency, they would still control the money supply, and in a way, that is what the government does today.  Most transactions are done digitally.  The unique characteristic of Bitcoin would be that the supply is static right?

[azguard]

Think that governments realize that if transaction fee is the key.
We pay same amount for withdrawal/transfer any amount of BTC same fee.
For money you pay some percentage of amount that you transfer so this is something that they dont want with any digital current.

[GreenStox]

In a recent blog post, Truthcoin (not an altcoin) Creator Paul Sztorc made an interesting point about how the Internet is changing the traditional definition of money. In the past, an asset needed to serve as a medium exchange, unit of account, and store of value to be useful as money; however, the Internet is quickly removing two parts of this equation. As Sztorc explained:

”In fact, because modern computing [1] allows prices to be quickly and effortlessly recalculated and redisplayed, and [2] allows e-transactions to be fast and cheap, we have many options for fast roundtrip conversions that drastically reduces money’s need to serve as a unit of account or even as a medium of exchange. This leaves only value-storage as a discriminator among money-types.”

The overall goal of the blog post was to finally dispel the contention that bitcoin cannot succeed due to its deflationary nature. Part of Sztorc’s argument rests on the idea that the Internet and bitcoin are changing the very definition of money.



Dismissing unit of account

If being a unit of account were to remain a requirement for money, then bitcoin would be in trouble. Nearly every business or individual who accepts bitcoin still prices their goods or services in terms of the local fiat currency, but this has not been an issue for the digital commodity. This is due to the fact that essentially all bitcoin wallets are able to display bitcoin balances and payment amounts denominated in popular fiat currencies. When sending a payment from one bitcoin wallet to another, many users enter the total value they wish to send priced in US dollars, euros, or some other fiat currency. Online retailers also have their prices change on a second-by-second basis in terms of bitcoin. In fact, a real-world version of this sort of price-adjusting system is also available for brick and mortar stores.

Dismissing medium of exchange

Although consumers are able to shop at many retailers with their bitcoin, most of these bitcoin-accepting outlets don’t actually hold any bitcoin. Services such as BitPay and Coinbase are used to instantly convert the bitcoin to fiat currency at the point of sale. Noted bitcoin critic Jeffrey Robinson likes to say that this means practically no businesses or individuals are actually accepting bitcoin for goods and services.

Of course, the key takeaway here is not whether or not the merchant decides to keep the bitcoin. The only part of the process that matters is a bitcoin holder is able to exchange the bitcoin for goods and services. As more assets become digitized over time, the costs associated with switching between those assets will continue to decline. In other words, consumers may be able to pay via a wide range of assets that can be converted into whatever the merchant wishes to receive.

Bitcoin as a store of value

Pztorc makes the case that bitcoin will become the preferred money because of its limited supply. This is due to the open-source nature of the technology behind bitcoin. As Pztorc points out:

”I hope it is now clear: if Bitcoin didn’t have a fixed money supply, it would be replaced by something which did. It would have happened with a single fork and a little publicity (rich BTC-owners could spread the following word “come with us on this hard fork at Date D, and your money will automatically be more valuable”). Since Satoshi knew that this would happen (and as non-equilibrium behavior doesn’t last long [by definition], and as hard forks endanger the digital-scarcity value-proposition / create double-spend opportunities), he built it the right way the first time.”

Pztorc also explains that a decreasing money supply would not work because “nothing of consequence occurs whatsoever” in such a system. If every holder of the money loses the same percentage value of the holdings on a yearly basis, then nothing has changed. Pztroc added, “If coins are destroyed randomly, risk of wealth-loss is introduced (pointlessly).”

Although bitcoin has performed well as a store of value since its creation, its short-term volatility is still an issue for many would-be adopters. Of course this volatility has become less noticeable over time. In fact, the digital commodity has proven to be a worthy contender to some fiat currencies in terms of price stability in 2015. Additionally, bitcoin also comes with other features, such as censorship resistance and a lack of counterparty risk, that are not found with digitized versions of fiat currencies.

No it does not, money is money and it always be.

Money will represent the amount of goods and services in the economy. That is the definition of money.

Obviously the current fiat crap does not, so its called counterfeited scam toilet paper rather than money.

[johnyj]

Austrian economics is nonsense. Money is a medium of exchange and nothing else.

Money printers usually like Keynesian economics, because Austrian economics will limit their ability to print money and enslave others

However, I don't understand why so many people who don't have the right to print money also appreciate the Keynesian economics, what a mind job

[freeyourmind]

Austrian economics is nonsense. Money is a medium of exchange and nothing else.

Money printers usually like Keynesian economics, because Austrian economics will limit their ability to print money and enslave others

However, I don't understand why so many people who don't have the right to print money also appreciate the Keynesian economics, what a mind job

For the same reason that kids believe in the tooth fairy and Santa Claus...it was told to them and never questioned

[manselr]

Think that governments realize that if transaction fee is the key.
We pay same amount for withdrawal/transfer any amount of BTC same fee.
For money you pay some percentage of amount that you transfer so this is something that they dont want with any digital current.

Fees in the traditional banking system are expected and reasonable, the problem is when those fees are illegal (they have no justification). Bitcoin gives you the edge of low fees by dealing with your money, thats why a lot of people don't want to see fees increased in Bitcoin as some point for that being a potential solution for the blockchain blocksize problem.

[evenlydistributingfuture]

We will see even much more in coming years.Internet already has changed many old concepts.Financial system will not escape from its effects too.Digital era needs digital money in future.

I think you're definitely on the right track. The Internet is going to change the financial system, for sure. Whether it's Bitcoin or not, cryptocurrency will be a big part of that. This got me thinking about how that might happen. When people are paying for many/most things with mobile payments and micropayments, will dynamic pricing be more widespread?

Uber famously is one sharing economy example of a new company that utilizes it, but will pricing things dynamically be the norm for most things once most purchases are made online and many of those via smartphone? Since circumstances like a store's inventory or any number of other factors can be considered and prices be adjusted in response to real-time conditions, is a changing price from minute to minute or hour to hour going to be normal? I haven't really thought about that before.

[muhrohmat]

well im not tottaly over the btc theres currencies of world countries that will remain of course but the adapt its done into btc from the point of price that it took into 2007 and grown up

[spazzdla]

Austrian economics is nonsense. Money is a medium of exchange and nothing else.

In a place where most disagree and hate keynesian , I doubt you'll find much love.

Also, no keynesian is moronic.

[mrhelpful]

Theres not much competition imho.

Dollar has been around more then I dont know how many years, and the fiat system is way older. Its just considered as a "feature" similar to a chew toy, but people arent willing to go buy bitcoin unless there was some financial meltdown.

[V for Varoufakis]

Austrian economics is nonsense. Money is a medium of exchange and nothing else.

In a place where most disagree and hate keynesian , I doubt you'll find much love.

Also, no keynesian is moronic.

I also hate the law of gravity, but i can't do something about that! Keynesian is like a law in economics.

[TheButterZone]

Austrian economics is nonsense. Money is a medium of exchange and nothing else.

In a place where most disagree and hate keynesian , I doubt you'll find much love.

Also, no keynesian is moronic.

I also hate the law of gravity, but i can't do something about that! Keynesian is like a law in economics.

Which if you obey it, capital is destroyed.

[V for Varoufakis]

Austrian economics is nonsense. Money is a medium of exchange and nothing else.

In a place where most disagree and hate keynesian , I doubt you'll find much love.

Also, no keynesian is moronic.

I also hate the law of gravity, but i can't do something about that! Keynesian is like a law in economics.

Which if you obey it, capital is destroyed.

Keynes saved capitalism from capitalists.

[TheButterZone]

Destroying something is not saving it.

[johnyj]

Austrian economics is nonsense. Money is a medium of exchange and nothing else.

In a place where most disagree and hate keynesian , I doubt you'll find much love.

Also, no keynesian is moronic.

I also hate the law of gravity, but i can't do something about that! Keynesian is like a law in economics.

Economy is not science, but politics. Science is about something that human can not change, the rule is set by nature. But economy is purely decided by human

[Amph]

Destroying something is not saving it.

can you say the same about bitcoin? if we destroy some coin, the price should skyrocket, what if we stop the whole mining now, and we enter in the fee era in this exact moment? would definitely help the price of Bitcoin, or it will simply fade away...

[TheButterZone]

You can modify the supply/demand ratio without destroying BTC.

[Hazir]

Austrian economics is nonsense. Money is a medium of exchange and nothing else.

In a place where most disagree and hate keynesian , I doubt you'll find much love.

Also, no keynesian is moronic.

I also hate the law of gravity, but i can't do something about that! Keynesian is like a law in economics.

Economy is not science, but politics. Science is about something that human can not change, the rule is set by nature. But economy is purely decided by human

Economy is subjective matter, that is the difference. But pure economy is also a logical science. The problem with economy's logic is that there is human factor playing big role there.
As we can see that bitcoin from logical point of view may be better currency that our FIATs but people are being stubborn to see that. if we can just ditch our economic prejudices world would be a better place.