Is Bitcoin money?

[db]

I shouldn't have to say this, but Bitcoin isn't a fiat currency.  It is a currency by the choices and designs of those who choose to use it.  Fiat currencies are currencies as a matter of law, so your obvious counterexample, isn't.

The default situation for governments is the same as for Bitcoin. Then governments make laws to give their currencies additional advantages. Bitcoin managed even without these extra advantages.

As for your belief that governments go to great lengths to get paid in anything other than their own currencies, try paying your property taxes in gold coins or in another fiat currency from another country.  If you can do this without the additional step of conversion into the local fiat currency, then I'd like to hear about it.

No, but there is an endless list of governments with bad currencies that has expropriated and banned posession of other currencies, legislated artificial exchange rates, run special foreign currency stores, demanded foreign currency deposits from foreigners, demanded exchange of certain sums before entry into the country and raided banks for gold and foreign currency.

[1714793705]

1714793705

[1714793705]

1714793705

[1714793705]

1714793705

[1714793705]

1714793705

[MoonShadow]

I shouldn't have to say this, but Bitcoin isn't a fiat currency.  It is a currency by the choices and designs of those who choose to use it.  Fiat currencies are currencies as a matter of law, so your obvious counterexample, isn't.

The default situation for governments is the same as for Bitcoin. Then governments make laws to give their currencies additional advantages. Bitcoin managed even without these extra advantages.

How, exactly, does that change the argument?  Are we talking about the same thing?

As for your belief that governments go to great lengths to get paid in anything other than their own currencies, try paying your property taxes in gold coins or in another fiat currency from another country.  If you can do this without the additional step of conversion into the local fiat currency, then I'd like to hear about it.

No, but there is an endless list of governments with bad currencies that has expropriated and banned posession of other currencies, legislated artificial exchange rates, run special foreign currency stores, demanded foreign currency deposits from foreigners, demanded exchange of certain sums before entry into the country and raided banks for gold and foreign currency.

These are all examples of attempts by failing governments to prop up their fiat currency by artificially increasing the demand of same.  That is the exact reason that every government that I know of expects payment of taxes within it's own currency.

[silverman]

should we all have a drink together, say cheers and the focus more on making BITCOIn bigger vs. endless debates of what it is?

sorry for that "nasty' comment, but I feel we could bundle our energies vs. debating forever (I am sure apple people could have debated decades on how to call the IPad or iPhone or mac or whatever)

I agree that we should all have a drink together, and that this debate does seem to be endless, but I disagree that this is pointless, and think rather that this debate is vital to the survival of Bitcoin.

First, let's remind ouselves that the question is "is Bitcoin money?", and I welcome creighto's agreement with my view that it is not. I'll go along with his statement that "bitcoins are a new/unique form of currency unit," although I am not wild about using the term currency either. "To even call them a commodity is granting them more attributes than they posses" is a nice, restrictive statement, and I'm all in favor of restricting things. It makes them easier to manage.

I also like kiba's "Nobody is advocating on how to decide how much bitcoins is worth, what the proper use of bitcoins is, etc al. What people like me are doing is trying to DESCRIBE REALITY aka scientific definition, not prescribe some rules that bitcoiners shold be following." Which is exactly where I am going with this. If we state that Bitcoins are to be traded for dollars, or worse, that Bitcoins are "worth" so many dollars, somebody at some time is going to rely on our own statements and demand performance, in a real court, with some of our members actually sitting there while the issue is decided.

Bitcoin has no provision for converting itself into world currencies. To claim that it can is fraud, and we should discourage our members from doing so. Bitcoin does not own or control Mt. Gox, Bitcoin 4 Cash, mybitcoin, or any other Bitcoin exchange. They operate independently, and Bitcoin should realize that their independence is a good thing. It insulates Bitcoin from the wrath of the currency frauds, who will surely object to this new upstart horning in on their territory.

Ditto for enforcement of contracts. Bitcoin has no provisions for keeping the public honest, other than keeping their books straight. No courts, no jails, no wars. It's simpler that way.

So, is Bitcoin money? No, it isn't. It doesn't WANT to be money either! And it isn't the world's police force for monetary fairness, either.

So, let's stop claiming that it is!

[Timo Y]

should we all have a drink together, say cheers and the focus more on making BITCOIn bigger vs. endless debates of what it is?

sorry for that "nasty' comment, but I feel we could bundle our energies vs. debating forever (I am sure apple people could have debated decades on how to call the IPad or iPhone or mac or whatever)

Sure, whether you call Bitcoin money or not is "just" semantics.  Unfortunately, semantics matters. It doesn't matter for people in this forum. Most of us understand Bitcoin.  But it does matter in terms of PR. 

We can't expect the average Joe to understand Bitcoin. (I have given up trying to explain Bitcoin to my cousin, and he is a frigging FX trader by profession!). That's why we need to pay attention to how Bitcoin appeals to the emotions of the average Joe. Details that seem silly to us geeks may make all the difference between success and failure. It doesn't hurt to discuss them.

[Timo Y]

To get right down to it, bitcoins are property because users behave as if that is the case.  As I see it, Bitcoin passes the 'Duck' test just fine.  Care to share how you have come to the conclusion that it does not?

The difference is psychological. There seems to be a consensus among the community that bitcoin exchanges should rely on reputation rather than contracts. There isn't a sense of obligation like there is with money. We are more tolerant to the possibility of scams. We see a degree of leeching as a given and factor it into the equation. We try to minimise it instead of preventing it by force. We rely on relationships rather than a sense of universal morality.

[kiba]

So, is Bitcoin money? No, it isn't. It doesn't WANT to be money either! And it isn't the world's police force for monetary fairness, either.

So, let's stop claiming that it is!

What would economic think of bitcoin as? The most obvious conclusion that it is MONEY because it serve the function of money. There used to be people who use giant rocks as money, shells as money, cows as money, etc.

Money arise naturally out of a barter economy, and advance from there. From there, we see that gold, salts, and other commodity evolved into money over time. Hence the phrase as "This guys is worth his salt".

Money is not some legalistic conception that arise out of king saying "THIS IS MONEY, USE IT OR DIE".

Bitcoin is as bitcoiners do.

What silverman seem to be doing is conflating legalistic thinking and strategies with the economic science.

[MoonShadow]

[ (I have given up trying to explain Bitcoin to my cousin, and he is a frigging FX trader by profession!).

Was mentioning your cousin's work intended to improve our opinion of your cousin's economic education?

I can, and have, explained Bitcoin to random people in under a half hour, including my own mildly autistic little brother.  None of whom had a ridgid, preconcieved understanding of what money or currency is.

Granted, none of those same people care about Bitcoin after understanding it, but I'm confident that they understood it well enough to know that they don't really care.

Creighton

[MoonShadow]

To get right down to it, bitcoins are property because users behave as if that is the case.  As I see it, Bitcoin passes the 'Duck' test just fine.  Care to share how you have come to the conclusion that it does not?

The difference is psychological. There seems to be a consensus among the community that bitcoin exchanges should rely on reputation rather than contracts. There isn't a sense of obligation like there is with money. We are more tolerant to the possibility of scams. We see a degree of leeching as a given and factor it into the equation. We try to minimise it instead of preventing it by force. We rely on relationships rather than a sense of universal morality.

The consensus is that bitcoin exchanges should rely on reputation rather then the enforcement of contracts.  Any agreement to exchange is a contract, even if there is no document to prove that such a contract exists.  There is a very real, ideological reason for this "consensus"; namely that much of this community is some flavor of classical liberal, most of whom either pledge or otherwise generally agree with the "Non-aggression principle" in all facets of life.

[MoonShadow]

So, is Bitcoin money? No, it isn't. It doesn't WANT to be money either! And it isn't the world's police force for monetary fairness, either.

So, let's stop claiming that it is!

What would economic think of bitcoin as? The most obvious conclusion that it is MONEY because it serve the function of money.

If you intended to ask what economists would think Bitcoin was, then I can certainly say that the answer would be a currency.  No economist who ever stated that Bitcoin was a money in any serious capacity should ever teach students again, and could never expect to get a paying job outside of academia, with the single exception of the New York Times.  But the last I checked, the NYT already has such a pretender on the payroll.

[silverman]

Sure, whether you call Bitcoin money or not is "just" semantics.  Unfortunately, semantics matters. It doesn't matter for people in this forum. Most of us understand Bitcoin.  But it does matter in terms of PR. 

We can't expect the average Joe to understand Bitcoin. (I have given up trying to explain Bitcoin to my cousin, and he is a frigging FX trader by profession!). That's why we need to pay attention to how Bitcoin appeals to the emotions of the average Joe. Details that seem silly to us geeks may make all the difference between success and failure. It doesn't hurt to discuss them.

Yes. Whether you call it PR, or ethics, or risk planning, or just having a clue, language does matter. Especially when you use it to persuade others of your service.

I've made my point abundantly. And now I resign. Either carry the ball or don't.

[kiba]

So, is Bitcoin money? No, it isn't. It doesn't WANT to be money either! And it isn't the world's police force for monetary fairness, either.

So, let's stop claiming that it is!

What would economic think of bitcoin as? The most obvious conclusion that it is MONEY because it serve the function of money.

If you intended to ask what economists would think Bitcoin was, then I can certainly say that the answer would be a currency.  No economist who ever stated that Bitcoin was a money in any serious capacity should ever teach students again, and could never expect to get a paying job outside of academia, with the single exception of the New York Times.  But the last I checked, the NYT already has such a pretender on the payroll.

What is the difference between currency and money?

My dictionary research yielded that currency is a current medium of exchange and that money is a medium of exchange. Since, people are actually using it as medium of exchange, therefore, it is both money and currency.

[The Madhatter]

My dictionary research yielded that currency is a current medium of exchange and that money is a medium of exchange. Since, people are actually using it as medium of exchange, therefore, it is both money and currency.

I hope you used a law dictionary.

[MoonShadow]

What is the difference between currency and money?

Asked and answered.  Either search for "Aristotle" in the search box, or simply start from the beginning of this thread.

[db]

These are all examples of attempts by failing governments to prop up their fiat currency by artificially increasing the demand of same.  That is the exact reason that every government that I know of expects payment of taxes within it's own currency.

It is a way of backing the currency (demanding taxes in any form and using that wealth to back the currency they issue to buy stuff does the same thing as demanding taxes to be paid in it). But they neither want to nor do back their currencies more than they have to. They much prefer profit instead. The central characteristic of fiat money is that it is not fully backed by its issuer.

[MoonShadow]

These are all examples of attempts by failing governments to prop up their fiat currency by artificially increasing the demand of same.  That is the exact reason that every government that I know of expects payment of taxes within it's own currency.

It is a way of backing the currency (demanding taxes in any form and using that wealth to back the currency they issue to buy stuff does the same thing as demanding taxes to be paid in it).

If their goal was to retain said tax wealth in order to actually support the currency, then I would agree with you.  But that isn't the goal of taxation.  Governments require that taxes be paid in their own currency in order to artifically stir demand by making it very difficult for an individual to live a normal life without needing to earn/exchange in the fiat currency.

 But they neither want to nor do back their currencies more than they have to. They much prefer profit instead. The central characteristic of fiat money is that it is not fully backed by its issuer.

That is a common characteristic, but not a requirement.  Of course, the 'legal tender' laws that support a fiat currency would largely be unneccesary if the currency were truly and fully backed by it's issuer. 

[Timo Y]

[ (I have given up trying to explain Bitcoin to my cousin, and he is a frigging FX trader by profession!).

Was mentioning your cousin's work intended to improve our opinion of your cousin's economic education?

He kept insisting that "if there is no guarantee, it's worthless". He was quite dogmatic about this and no argument would convince him, no matter how rational. Oh well. Maybe it's easier to explain it to someone who is ignorant in this area and thus unprejudiced.   

[MoonShadow]

[ (I have given up trying to explain Bitcoin to my cousin, and he is a frigging FX trader by profession!).

Was mentioning your cousin's work intended to improve our opinion of your cousin's economic education?

He kept insisting that "if there is no guarantee, it's worthless". He was quite dogmatic about this and no argument would convince him, no matter how rational. Oh well. Maybe it's easier to explain it to someone who is ignorant in this area and thus unprejudiced.   

Well, in some ways that is correct, but fiat currencies have no guarantee either.  At least not beyond the ability of the government to honor them, which is not a certainty.  It is because of this growing uncertainty in the modern world that gold is hitting new nominal highs with each passing day.  Gold, as with any other good money, is it's own guarantee; because it's physical makeup is a useful commodity that can be sold for something even if the institution that minted it into a tradable form no longer exists.  This is not the case with fiat currencies, because the paper used to make currency doesn't even make decent toilet paper.

Nor is Bitcoin backed in any rigid way, which is why it doesn't qualify as money, or even as a hard currency.  But the difference is that the community has faith in Bitcoin due to it's design strengths.  If a fatal flaw is ever found in the system, that could destroy Bitcoin as a currency; but the failure of any singular government or institution would not.

[caveden]

He kept insisting that "if there is no guarantee, it's worthless".

Have you tried showing him that they are already worth around 0,06USD each ?
Actually, try to explain what value is... gold itself has no "guarantee"... nobody can really guarantee people will keep valuing gold.

[kiba]

He kept insisting that "if there is no guarantee, it's worthless".

Have you tried showing him that they are already worth around 0,06USD each ?
Actually, try to explain what value is... gold itself has no "guarantee"... nobody can really guarantee people will keep valuing gold.

All you need is to mine a nearby asteroid than BAM! Everyone's faith in gold is gone.

[MoonShadow]

He kept insisting that "if there is no guarantee, it's worthless".

Have you tried showing him that they are already worth around 0,06USD each ?
Actually, try to explain what value is... gold itself has no "guarantee"... nobody can really guarantee people will keep valuing gold.

All you need is to mine a nearby asteroid than BAM! Everyone's faith in gold is gone.

I doubt it.  Refined gold "above ground" is already more abundent than refined silver, yet gold continues to be several orders of magnitude more valued.  I'm sure that by the time we're mining planetary bodies for resources, gold will likely be valued as a commodity for it's material properties alone.  This doesn't mean that it won't still be valuable.