I am NOT 100% Convinced Bitcoin Is Money...

[SilverVigilante]

Is Bitcoin money in the tradition of western philosophy?

In the past year, discussion of Bitcoin as a currency or money has overtaken an earlier paradigm in which Bitcoin began to be interpreted as beyond money and currency. Like many argue that the US Constitution was written in an earlier time, say “before automatic weapons” or “equality,” and thus making it irrelevant, many individuals have noted the ways in which Bitcoin is actually a part of a paradigm outside the purview of money and currency. While containing most, if not all, of the characteristics of Aristotelian money, it also portrays Platonic interpretations of what money is, such as that the value of currency should independent from the material with which money was made. Thus, Bitcoin is both conservative and progressive all at the same time.

Instead of being seen as currency and/or money, Bitcoin can more accurately be seen as the distributed application architecture that partitions tasks or work loads between peers.  Once a p2p exchange comes online – and many programmers do believe such an achievement is possible – this will be truer than ever. This p2p exchange will transform a large part of the Bitcoin network into a near network of equally privileged, equipotent participants in the application. These participants will support a peer-to-peer network of nodes.  Uncommon to the p2p world, Bitcoins’ nodes will not all be made equal. Nonetheless, with the support of p2p exchanges, Bitcoin begins to resemble a pure p2p network (assuming a p2p exchange is developed.), and more accurately, a futuristic p2p network.

The Bitcoin QT client gives Bitcoin a p2p dynamic, insofar as it allows all participants to make a portion of their resources, such as processing power, disk storage or network bandwidth, directly available to other network participants. Reflective of the Bitcoin network QT is designed to mediate, this is done without the use of central coordination by servers or stable hosts.

In a p2p exchange network setting,  all participants would act as both suppliers and consumers of Bitcoin resources.

Bitcoin stands not only to tap into file sharing and p2p networks, but in fact tap into the future of these rather new advents. In astonishing display of the pace of change in the internet age, the future of p2p systems encompasses collaborative themes going beyond peers doing similar tasks while sharing resources, and instead seeking diverse peers that bring unique resources and capabilities to a virtual network, and engaging such participants in greater tasks beyond those that can be accomplished by individual peers, yet that are beneficial to all the peers. This is the sort of p2p exchange Bitcoin stands to become.

So, whilst propelling us into the future, Bitcoin also takes us back to square one: in the context of exchange, Bitcoin has, in some ways, brought us back to “sharing” – that is, file sharing. The practice of distributing or providing access to digitally stored information, like computer programs, multimedia, documents and electronic books is common. This is what Bitcoin is: the sharing of digitally stored information. And, because Bitcoin is a) not an overtly accepted medium of exchange and b) not even predominantly shared amongst what government terms “users”, Bitcoin is not money or currency, and thus is not a financial instrument.

It therefore depends on the future of the Internet, and the Internet alone. Will all sharing of digitally stored information become a matter of public knowledge, with individuals having absolutely no right to privacy via computers and smart phones, etc? Will p2p networks become outlawed?

Using widely available open source software, and the voluntary contributions of globally located nodes and users, the p2p network that is Bitcoin is beyond money and currency. It can be used in exchange for certain things, like money, but so can logins for online paid services. And moreover, most people are merely holding onto bitcoin’s expecting that they will still be around in the future. That is their bet, and their bet alone, and it has very little to do with dollar value. When one holds onto a stock or bond, it is for monetary gain. This cannot be argued of the average Bitcoin user.  One could hold onto a folder of thousands of downloaded albums, betting that their value will rise in the future. Both parties would probably be right. But, this makes neither of the digital packets (either the albums or the BTC) money.

read more: https://www.goldsilverbitcoin.com/bitcoin-beyond-money-peer-to-peers-new-paradigm/

[Melbustus]

http://evoorhees.blogspot.com/2013/05/bitcoin-2013-role-of-bitcoin-as-money.html?m=1

[misterbigg]

You're right, Bitcoin is not money. It's more than money! A dollar bill can't send itself. But bitcoin can!

[justusranvier]

You're right, Bitcoin is not money. It's more than money! A dollar bill can't send itself. But bitcoin can!

Bitcoin isn't money in the same way that a web site isn't a newspaper.

[TippingPoint]

So, whilst propelling us into the future, Bitcoin also takes us back to square one:

That is somewhat poetic.

[johnyj]

It's more like a social contract backed by mathematics and network, traditional money basically do the same thing, but never had so high credit as bitcoin. Bitcoin has the highest credit rating on the planet

[mobodick]

You're right, Bitcoin is not money. It's more than money! A dollar bill can't send itself. But bitcoin can!

I beg to differ.
I have, at some point, paid someone by folding a paper plane out of a bill and throw it.
You seem to confuse levels of system.
A dollar bill is just a piece of paper unless it functions within a larger system. And it is this system that facilitates transfers.
Likewise in bitcoin the system of internet and miners make sure your transactions get done.
Bitcoin is just a number on your harddrive. Without the rest of the system your bitcoins are nothing. Bitcoin cannot send itself. It requires other things like miners and internet.
So your example conveniently confuses things.


I think the OP is misguiding. It suggests there is a way of looking at bitcoin as non-money but in the end offers no real explanation for why bitcoin is not money.

In the end all forms of money are informational systems.
What OP needs to realize is that the actual 'shape' of money depends on what the intended use is.
In that respect bitcoin is as much money for our age as gold coins were for the romans.

The only prerequisite for being money is that something is a practical way of handling value.
All idealizations of money systems stem from this.
Bitcoin is just better adapted to current environment.
One could say that bitcoun got its 'shape' because of the current environment.
But that does not make it less than 100% money.

[Biomech]

there is an air gap (bankers, laws, etc) between btc and fiat. only gold, a store of value, is able to make the jump to the other side. we need a p2p gold exchange priced in btc

agreed.

[ixne]

I don't know why people are talking about this still, Evoorhees nailed it.

[Guardian of Forever]

I think we need to start at a more basic level. What is "money"? Is what we use as currency money? Can the old definitions of money apply to bitcoin?

Money in economic terms is only a medium of exchange, which society generally agree has value. The currency we use today is worthless, unless we trust it has value. And today that value is backed up by faith that I can spend it on the things I need and want. There is no stored value in a piece of paper that has numbers that represent value, only faith in there are others who will believe it is worth some tangible value.

Money from a banking prospective: Take a look at the amount of currency being used in the world, and the amount of transaction occurring at the same time. If all the bank account holders demanded payment all of their "money" the banks don't have enough physical "money" to pat account holders. In other words "money" is a number on computers that move through wires to other banks who pay bank deposits. So from the banks standpoint "money" is a number in an account ledger. And that those digits have value that can be used in place of paper notes with numbers printed on them.

Money for the users is a promise that the paper has value. A promissory note if you will, and if you look on a US paper bill, you will notice it is a Federal Reserve Note, and it is "legal tender for all debts...". This paper note is nothing more than a debit obligation that people believe has value to trade for goods and services, a promise to pay something in the future to someone. The digits in a bank account is the same thing, a promise to pay some future amount of something in the future.

Bitcoin is the same thing. people who use bitcoin have faith there is value in the digital currency. In theory a country could exchange all of its "money" in to bitcoin, and then bitcoin would be that countries currency. And their banking system would go on as if the only thing that happened was the change in the symbol in front of the "money."

It all boils down to how much faith do you (the users of bitcoin) have in bitcoin's ability to hold value over time, and if you can spend it on goods and services you enjoy.

[Gabi]

Bitcoin is digital gold. Is gold money? No. So bitcoin is not money.

[WiW]

It's okay, I'm not 100% convinced that the US dollar is money, but you know what? It works, so it is...

/thread

[Gabi]

Dollar is "fiat money"

[misterbigg]

Bitcoin is digital gold.

Bitcoin is "gold for nerds."

Yes. Gold for nerds!

Or, as we nerds like to call it, Mithril! Brighter than silver, stronger than steel, mined by the dwarves in Moria until they dug too deep and released Durin's bane!



Bitcoin!

[franky1]

in prison people trade cigarettes to ensure they dont get raped in the shower and to pay for extra food from other prisoners. in european countries alcohol is used to get friends to do you favours. such as helping you fix a car or paint a housewall. these are not money. these are currencies. money bears the trademarked symbols of the governments using it EG £ $.

so you are right bitcoin is not money. bitcoin is:
functionally: a currency(product used in trade)
physically: an asset(a possession holding value)

bitcoin (paper wallet) is not a payment system. it is just a bunch of letters and number and a promise that those letters and numbers can be redeemed for a value they represent.

much like the serial numbers and 'promise' on a bank note

the payment system (bitcoin client/miners) is not essential to bitcoins use. as there are many off the chain methods of moving bitcoin.

we need to get a trusted service to start a calculation based on how many coins are made per day (3600) divided by the number of miners, to get an average income per day/month/year value.

and then compare that to food, commodity values. much like governments compare cost of living vs minimum wage. then we will be free from the fiat controls. if we can easily see that bitcoin is worth X loaves of bread, milk grams of gold etc.

bitcoin is not a commodity but we do need to start pricing bitcoin against commodities instead of the fiat value of commodity

[Biomech]

Bitcoin is digital gold. Is gold money? No. So bitcoin is not money.

gold is indeed money. Historically, that has been it's primary use. That it also has industrial uses is irrelevant.

That most countries no longer view it as money has a lot to do with deliberate disinformation by a group of talented liars and their less talented useful idiots. Prior to 1944, the whole world viewed gold as money. Prior to 1971, most of the world still did. In 1971 the link between fiat and gold was broken definitively, to allow for a free floating currency so that governments no longer had ANY restraint on their nefarious activities.

Bitcoin is more like Milton Friedman's idea of money (Peer to Peer coin even more so), where a computer or network controls the rate of inflation.

I think Bitcoin is useful and interesting, and yes, money. It is used as a medium of exchange beyond direct barter, it is portable, durable, and easily divisible without incurring total loss by division. It meets all the criteria except being a stable store of value, and frankly only precious metals have really stood up to that test. Even then, shakily. I think Bitcoin has the capability of doing so for the same reason: Scarcity. I suspect that it will be that most feared (by Keynesians) of monetary units, the deflationary model.

Deflation, contrary to Keynes, is generally a GOOD thing in a money. Sure, it makes prices go down over time, but that's not because the VALUE of goods goes down, it's because the value of the currency goes UP! So if the unit value changes upward, causing a decline in prices, this is good for all involved except accountants who tend to view things only from the POV of their books.

I am reminded yet again of the "useful idiots" who decried Ford paying their workers five dollars a week. They were arguing on imposing a minimum wage, and using a historical example completely out of context. So, here's the context. Ford was paying almost TWICE the going labor rate for skilled workers, and that payment was in a currency backed by gold. Specifically, they were being paid five dwt a week. Given today's price of gold, that equals out to 346.25 a week. And gold just took a hit vs. the dollar. At minimum wage, excluding tax (which in the time frame we're discussing didn't exist on such low incomes) you would make 290 a week right now. Since even at minimum wage the combined leeching is in the neighborhood of 15% (prior to refunds, if any) and Ford's workers paid AT WORST 1%, the comparison falls the hell apart. Gold deflated significantly vs. the dollar, now that it is free floating and inflationary. Yet it's PURCHASING ABILITY is about the same. A model T cost, at it's lowest, $300.00, or 15 oz. troy of gold. Today, that is $20,775. That will in fact buy you several different cars all significantly superiour to the Model T.

Fiat hasn't fared well against deflationary currency, and if you've been paying attention, the "owners" of the fiat (central banks and their pet politicians) have been investing quietly but heavily in gold. Why? Because they KNOW that the ponzi scheme known as Fiat currency inflation has to end, and that it ends badly for those who hold nothing else.

Where bitcoin will figure into all of this is hard to tell, but it's biggest uptick was in the wake of the central banks of Cypress, with the IMF's hearty approval, confiscating the accumulated fiat wealth of practically everyone on the island. From the time the writing was on the wall to the time the trigger was pulled, a lot of people bought bitcoins as an escape from the dirty trick. A lot of you on this forum benefited from that, but so did those Cyprians who managed to save a bit of their treasure. It certainly gained the bitcoin some legitimacy AS MONEY.

I think the cryptocurrency idea is a good one. Flawed in some ways, but all monetary systems are. By decentralizing the notes, you take away a lot of the ability to abuse it. By being deflationary, it's perceived value is likely to increase over time. It's not a good substitute for precious metals for long term valuation, but it's a good substitute for centralized fiat.

I have a lot more questions than answers at the moment, so I'll end this here for now.

[Biomech]

Bitcoin is digital gold.

Bitcoin is "gold for nerds."

Yes. Gold for nerds!

Or, as we nerds like to call it, Mithril! Brighter than silver, stronger than steel, mined by the dwarves in Moria until they dug too deep and released Durin's bane!



Bitcoin!

LOL!

And more seriously, we all know that nerds get their post high school revenge by accumulating a large amount of the gold...

[Theraty]

Its the same thing weve being doing ages. Trading one thing of percieved value for another thing of percieved value.

[Gabi]

http://www.forbes.com/sites/afontevecchia/2011/07/13/bernanke-fights-ron-paul-in-congress-golds-not-money/

Bernanke Fights Ron Paul In Congress: Gold Isn't Money

Bernanke says it is not money so it is not money 

[sunnankar]

Or, as we nerds like to call it, Mithril! Brighter than silver, stronger than steel, mined by the dwarves in Moria until they dug too deep and released Durin's bane!



Bitcoin!

Mithril = cryptography (impervious to violence)
Dwarves = cypherpunks or software developers (tinkerers who constantly build tools searching for market solutions)
Durin's Bane = the Free Market (ability to perform economic calculation without regulatory censorship enforced through violence)