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Author Topic: Is There A Good Reason To Still Be Calling BTC Money/Currency?  (Read 5808 times)
hugolp
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June 22, 2011, 09:47:21 PM
 #21

Facilitating trade is not an end unto itself? Wink

Nope.  I thought I made myself clear on that point.  They're a medium of exchange.  They're desired because they facilitate trade.  They're not desired because someone wants to place them on their lawn, atop their TV, eat them, etc.  Some weirdo might have a goal to accumulate them without EVER using them to facilitate a trade for SOMETHING ELSE -- but I have yet to run into such a person.  And I doubt that you have either.

Yes I agree. But I wonder why you make the distintion. Facilitating trade is just another function.
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Epinnoia
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June 22, 2011, 09:49:51 PM
 #22

Yes I agree. But I wonder why you make the distintion. Facilitating trade is just another function.

I make the distinction because of the definition/etymology of 'currency'.  Currencies, as the name implies, permit trade to FLOW (like a current).

http://www.etymonline.com/index.php?term=currency



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spruce
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June 22, 2011, 09:51:43 PM
 #23

One very good reason is that it is the de facto usage and wouldn't be that easy to change in people's minds.

Google search:
bitcoin currency — About 4,330,000 results (0.11 seconds)
bitcoin commodity — About 365,000 results (0.08 seconds)

Heading of bitcoin.org: P2P Virtual Currency.
Bitcoin is a peer-to-peer currency.

Wikipedia: Bitcoin is a digital currency created in 2009 by Satoshi Nakamoto.

Etc.
hugolp
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June 22, 2011, 09:55:55 PM
 #24

Yes I agree. But I wonder why you make the distintion. Facilitating trade is just another function.

I make the distinction because of the definition/etymology of 'currency'.  Currencies, as the name implies, permit trade to FLOW (like a current).

http://www.etymonline.com/index.php?term=currency

Yes... and a lot of things flow too, even literally.

What I want to say is that to you f.e. a shovel is not a means unto itself neither I guess? Because it is used to dig wholes. But you could say the wholes are for something else. Where do you draw the line?

You could even say that eating is not a means unto itself, its just a way to stay alive. Its all a matter of definition and subjective opinion, so discussing if something is a means unto itself its rathe pointless. That is what I am trying to say.
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June 22, 2011, 10:10:09 PM
 #25

Although currency vs. commodity may seem to be just semantics I think it is vital to the future of bitcoin to be considered a commodity for all the reasons already stated in this thread.

The closest physical commodity compared to bitcoins are diamonds - which are traded mostly without government interference.  I perceive bitcoins as digital diamonds where electrons = diamonds.  

Bitcoins in themselves can't be considered a currency as there is no way for a "face value" to be attributed to them.  Even if they did have a attributed face value it would be just as meaningless as other commodities that do have a face value i.e. $50 1-ounce Gold Eagles.
silverman
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June 22, 2011, 10:18:21 PM
 #26

For the moment, at least, bitcoin is recognized (legally) as more of a product or commodity....

"Product or commodity" gives BTC a much better chance of being legal in many countries, so why does our official site/wiki still call it money/currency?
Another option could be "trading units" or anything else related to barter.

Is There A Good Reason To Still Be Calling BTC Money/Currency?

You have no idea how hard I fought this one back in the "early days" of Bitcoin, but I got hooted down. The Bitcoin community has stepped in shit up to its ankles, and there's no way to wipe it off now.

Bitcoin is a program, it is an algorithm, it is a convenience to keep the community's accounts in order.

Bitcoin is not money, it is not cash, it is not dollars, it is not currency, it is not legal tender. These are buzzwords the Establishment uses to keep their franchises safe from competition.

Bitcoin is not "worth" Dollars, or Euros, or Pogs. But it can be traded for them.

There was no good reason to misuse any of the above loaded terms. There were plenty of other options. But the Bitcoin community was invincible, and could call things whatever they damn well wanted.

Now that the Bitcoin community has brought in "The Authorities" to solve their dumbass error of divulging customer identities on Mt.Gox. We will see just how shortsighted this policy of tweaking the nose of the legal system will turn out to be.



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June 23, 2011, 12:29:44 AM
 #27

3. Liberty Dollar was taken down because it was accused of copying the government money. They said he wanted to fool people into believing that the Liberty dollars were Federal Reserve Notes. They were not charged for operating an alternative currency, since its legal. The acussation is obviously an excuse to take down a competing currency that was starting to take off. Its one more prove that they will do anything to impose a monopolly on money, but they will try to do it in the nicest way so they can say that they are not imposing the dollar.

I think you're a bit off-base there - Associated Press reported that the guys behind Liberty Dollars recruited businesses to not only accept them, but to hand them back in change to unsuspecting people. That's not a voluntary participation in an alternate currency, that's counterfeiting and just general scumbag/scammer behavior, regardless of what you happen to think of the USD right now.

^_^
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June 23, 2011, 12:59:20 AM
 #28

The authorities in respective countires are the ones who will define whether BTC are regarded as a "currency" or a "commodity", it does not matter what other people associate BTC with.

How can you tell when a politician is lying? His lips are moving. A little girl asked her father, 'do all fairy tales begin with "Once upon a time"? The father replied, 'No, some begin with - If I am elected.' How come political leaders don't have all the answers until they write their memoirs?
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June 23, 2011, 01:11:04 AM
 #29

The closest physical commodity compared to bitcoins are diamonds - which are traded mostly without government interference.  I perceive bitcoins as digital diamonds where electrons = diamonds.  

You probably don't want to call them currency because you want to skirt the laws regarding currencies.  

Diamonds are sought after as an ends unto themselves.  People spend money to have diamonds, not to then turn around and trade those diamonds for other things.  Diamonds can be used for jewelry, cutting things, etc.  That's why diamonds are a commodity, while Bitcoins are a currency.  If bitcoins were useful for anything OTHER THAN TRADE, you'd have a much better time trying to call them a commodity with a straight face.

And again -- it doesn't matter what the community calls them.  Even if you could convince every person in the Bitcoin community to call them a commodity, it won't make a bit of difference.  It's what the judge/jury/law defines as currencies that ultimately matters. 

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Epinnoia
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June 23, 2011, 01:24:02 AM
 #30

Bitcoin is not money, it is not cash, it is not dollars, it is not currency, it is not legal tender. These are buzzwords the Establishment uses to keep their franchises safe from competition.

It most certainly is a currency.  It facilitates trade.  That's what currencies do.  That's why I gave the etymology of the word.  It comes from the word meaning 'to flow' -- it permits trade to flow.

And unlike a commodity, it has no use other than to facilitate trade.  Hell, I could argue that a US Dollar Bill is more of a commodity than a bitcoin is -- because if nothing else, I could light it on fire and generate heat from the paper.  Or I could use them to wallpaper my room.  Bitcoins have absolutely no other use than to facilitate trade.  

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silverman
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June 23, 2011, 04:28:58 AM
 #31

Bitcoin is not money, it is not cash, it is not dollars, it is not currency, it is not legal tender. These are buzzwords the Establishment uses to keep their franchises safe from competition.

It most certainly is a currency.  It facilitates trade.  That's what currencies do.  That's why I gave the etymology of the word.  It comes from the word meaning 'to flow' -- it permits trade to flow.

And unlike a commodity, it has no use other than to facilitate trade.  Hell, I could argue that a US Dollar Bill is more of a commodity than a bitcoin is -- because if nothing else, I could light it on fire and generate heat from the paper.  Or I could use them to wallpaper my room.  Bitcoins have absolutely no other use than to facilitate trade.  


One more attempt. Maybe somebody out there is reachable.

Quote
Currency. Coined money and such banknotes and other paper money as are authorized by law and do in fact circulate from hand to hand as the medium of exchange. (citations omitted.) -- Blacks Revised Fourth

It continues:

Quote
The term "money" is synonymous with "currency," and imports any currency, token, bank notes, and other circulating medium in general use as the representative of value. (citations omitted)

Don't argue with me. Argue with the guy in the black robe. Maybe he will be impressed with your knowledge of legal jargon. I'm sure not.

This is so unnecessary. All it takes is a rational survey of the terminology and issues, and an agreement on which terms are proper to describe Bitcoin.

But everybody is such an expert...


CryptoCommodity
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June 23, 2011, 05:01:32 AM
 #32


You probably don't want to call them currency because you want to skirt the laws regarding currencies.  

Diamonds are sought after as an ends unto themselves.  People spend money to have diamonds, not to then turn around and trade those diamonds for other things.  Diamonds can be used for jewelry, cutting things, etc.  That's why diamonds are a commodity, while Bitcoins are a currency.  If bitcoins were useful for anything OTHER THAN TRADE, you'd have a much better time trying to call them a commodity with a straight face.

And again -- it doesn't matter what the community calls them.  Even if you could convince every person in the Bitcoin community to call them a commodity, it won't make a bit of difference.  It's what the judge/jury/law defines as currencies that ultimately matters. 


You are correct that I want to call them commodities because I don't want certain laws to apply to bitcoins.  In the US Cash Transaction Reports (CTRs) and Suspicious Activity Reports (SARs) are a real hindrance to being able to transact in a free, anonymous and non-oppressed manner.  If those same laws were to be applied to bitcoins it wouldn't outlaw bitcoins but it would make most people that use bitcoins outlaws if they failed to voluntary report such transactions.

Diamonds are not necessarily sought out as an end unto themselves except at the retail and industrial level.  At the wholesale level people purchase them because they believe that they can sell them to someone else at a higher price.  

Bitcoins do have a unique utility – this being the ability to send them quickly, securely and without double spending – and this is a unique and noble.  Once exchanges begin to operate in an efficient manner this should allow a party to buy bitcoins using their native currency – send those coins to a third party anywhere in the world – and allow that party to sell those bitcoins in exchange for their native currency, with all of this happening in fewer than three hours.  That is where the value lies with bitcoin, being the relative utility compared to any other method in regards to cost of transfer and the time it takes to make such a transfer.

In practice merchants would likely price their products at their native currency and then a bitcoin price where bitcoin price = native currency price/bitcoin exchange rate in that currency.  Market efficiency should take over and make it so that the value of each currency relative to bitcoin closely follows the corresponding FOREX exchange rate.

It will be MUCH easier to persuade merchants to start accepting bitcoins if there is a liquid market where the merchant can exchange them for their native currency almost immediately after receiving them.  Simply put businesses must turn a profit to remain viable and be able to pay their bills.  Exchanges will be an integral part of the bitcoin economy until businesses can pay their lease, electric, internet and their suppliers with bitcoins.

Even if bitcoins were a semi-accepted form of payment the volatility inherent to the bitcoin market due to its small size necessitates that exchanges be in place if the acceptance of bitcoin was only relative to its value compared to a native currency.  Plainly put if a company could pay their bills with bitcoins but they knew their bills were going to be 500 USD they would need to covert bitcoin to USD immediately upon receipt of the bitcoin if they wanted to stay in business due to the risk of ruin involved in being heavily invested in a very volatile market.

In a technical sense all miners are converting fiat currency to bitcoins as they are using their fiat currency to buy hardware and electricity to convert to bitcoins.  If you actually can sit there “with a straight face” and tell me your computer is printing money there probably is not much I can say to dissuade you.
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June 23, 2011, 06:51:52 AM
 #33


Quote
Currency. Coined money and such banknotes and other paper money as are authorized by law and do in fact circulate from hand to hand as the medium of exchange. (citations omitted.) -- Blacks Revised Fourth

It continues:

Quote
The term "money" is synonymous with "currency," and imports any currency, token, bank notes, and other circulating medium in general use as the representative of value. (citations omitted)

These citations are misleading unless you read them correctly.  Currency is not just the same word as money.  They are different concepts that just happen to often overlap.  Currencies have historically been comprised of legal money because banks and governments have historically been reliable guarantors of future value.  But there is no reason money must be backed by government force.  And there is no reason that currency must be money.  Anything that circulates as a medium of exchange has currency.  Period.

Money may be currency, if it is readily exchanged.  And currency may be money, if it has future value, either innate or by fiat.  Currency, however, is not necessarily money and money is not necessarily currency.  Over the last decade, for instance, gold and silver have been much better monies than Federal Reserve Notes.  Yet gold and silver are not currencies since they can't be used to purchase a hamburger.

Quote
Don't argue with me. Argue with the guy in the black robe.

There's no reason to argue with anyone in black robes.  Since the US is a common law jurisdiction,

Quote
All it takes is a rational survey of the terminology and issues, and an agreement on which terms are proper to describe Bitcoin.

Which we have done already.  Bitcoin is a currency, since its function is to circulate as a medium of exchange, and since it in fact does so.  But you can call it whatever you'd like.

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June 23, 2011, 06:58:48 AM
 #34

The only thing that will change Bitcoin from a commodity to a currency is you making something useful, needed, or pretty that you yourself do not need more of and trading it for Bitcoin.  I have an issue with the money market (MtGox, et cet)  because it ain't money unless a boatload of people accept it in trade. For stuff they make.
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June 23, 2011, 07:05:38 AM
 #35

In economics, currency refers to a generally accepted medium of exchange. I guess it depends on how you define "generally accepted". Bitcoins are definitely a medium of exchange.

They are generally accepted among a particular community. Why not consider them a currency?

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June 23, 2011, 07:17:45 AM
 #36

Recently someone on these forums pointed out the little-discussed history of "commercial scrip" - today known as corporate currencies.

This discussion points out the multifaceted nature of human exchange systems -- and that Bitcoin fulfills many of the definitions of a commodity (like diamonds) and some of the definition of a currency. 

I recently noticed the advertising campaign of American Express.  Note that they appear to be promoting a "commercial currency," positioning themselves for inter-convertibility with what...Facebook Credits? But look at their image:


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June 23, 2011, 07:20:30 AM
 #37

It will be mainly used as a commodity for some time. If bitcoin gets really successful then it will get to be mainly used as currency.

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June 23, 2011, 08:01:21 AM
 #38

Money is generally considered to be a currency which is backed by something -- such as gold, silver, etc.  I would never call a bitcoin 'money'.  But it is a currency, because it facilitates trade, and is not and 'end unto itself'.  People who want bitcoins want them for their ability to facilitate trade.  Not because they are nice to mount on the wall, on top the television, or anything like that.

USD is not backed by anything else than the paper they are printed on/metal used for coins. Gold backing etc. was removed a reaaally long time ago.

You should watch: http://www.zeitgeistmovie.com/
The portion about money is made very easily understandable Smiley

Infact, most money does not even exist what is in circulation. Money is literally printed, and mostly economies are based on loan. Hell, for USD the US govt doesn't even own the currency! Cheesy It's private currency.

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June 23, 2011, 08:01:37 AM
 #39

Lets call them kittens, everyone loves kittens and kittens will never be illegal.

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June 23, 2011, 10:27:56 AM
 #40

Only sovereign nations are allowed to issue "money" or "currency". The legal status of Bitcoin is certainly not money/currency. According to US law, Bitcoins are a barter. I have posted on this subject at "Opening a BitCoin exchange is futile - read why" http://forum.bitcoin.org/index.php?topic=21174.0;all Other sovereign nations have similar provisions.

The IRS defines barter as:

Quote
Internet-based Barter

The Internet provides a new medium for the barter exchange industry.  Pure Internet-based barter companies differ from traditional, organized trade exchanges in that they do not have a physical office. In modern Internet barter exchanges, there is an agreement or process in place to value goods and services exchanged, which is facilitated by the barter exchange for a fee. A barter exchange functions primarily as the organizer of a marketplace where members buy and sell products and services among themselves.
Trade Dollars

Barter exchanges have their own unit of exchange, usually known as barter or trade dollars.  Trade dollars or barter dollars are valued in U.S. currency for the purposes of information returns.   Trade dollars allow barter to take place between parties when one party may not have a simultaneous need or desire for the goods or services of the other members.  Barter exchanges act as the bookkeeper for keeping track of trade dollars that participants accumulate. Earning trade or barter dollars through a barter exchange is considered taxable income, just as if your product or service was sold for cash.

http://www.irs.gov/businesses/small/article/0,,id=113437,00.html

So Bitcoins are, per se, legal. However, Bitcoins are subject to multiple laws, e.g. tax laws. In the U.S. (for example) any person engaged in barter "may be subject to liabilities for income tax, self-employment tax, employment tax, or excise tax. Your barter activities may result in ordinary business income, capital gains or capital losses, or you may have a nondeductible personal loss."

http://www.irs.gov/businesses/small/article/0,,id=188095,00.html

How can you tell when a politician is lying? His lips are moving. A little girl asked her father, 'do all fairy tales begin with "Once upon a time"? The father replied, 'No, some begin with - If I am elected.' How come political leaders don't have all the answers until they write their memoirs?
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