Walter Block

[grondilu]

I didn't know this guy but I like the way he speaks.

Check out what he says about money in this video for instance :

http://www.youtube.com/watch?v=m2690Fy0sM8


He makes a good sum up of characteristics for good money :

* durability
* divisibility
* recognisibility
* portability
* scarcity


Notice that bitcoin fullfills all of them.

[gene]

* durability

This remains to be seen. Seems pretty easy to lose a wallet. Or for the network to be attacked.

* recognisibility

Definitely not yet. Also, how to recognize an abstract mathematical concept in a way analogous to cash?

* portability

Not like cash. At least, not yet.

[caveden]

* recognisibility

Definitely not yet. Also, how to recognize an abstract mathematical concept in a way analogous to cash?

All you need to recognize an authentic bitcoin transfer is the proper software. And you can have mathematical certitude that it is authentic. Bitcoins authenticity is much easier to recognize than physical money.

I don't think he meant "recognizability" in the sense of being "famous"... but I didn't watch the video...

* portability

Not like cash. At least, not yet.

No? You can carry all bitcoins in existence in your pocket if you manage to put them all in one only address. How is that compared to cash?


By the way, Walter Block is an economist on the Mises Institute if I'm not wrong. He has a book from which I've read a few chapters, Defending the Undefendable, it looks interesting... it's on my "to read" list.

[gene]

* recognisibility

Definitely not yet. Also, how to recognize an abstract mathematical concept in a way analogous to cash?

All you need to recognize an authentic bitcoin transfer is the proper software. And you can have mathematical certitude that it is authentic. Bitcoins authenticity is much easier to recognize than physical money.

You need a computer. That alone raises the price of entry. With bank notes, you need eyes.

* portability

Not like cash. At least, not yet.

No? You can carry all bitcoins in existence in your pocket if you manage to put them all in one only address. How is that compared to cash?

Can't do a whole lot with a hash value; a computer is needed. Cash is low-tech and works. Anywhere. Any time. Bitcoin doesn't come close. Here's an experiment. Go to a local market. Try to buy a loaf of bread with bitcoins. Try again with the local currency. Report your observations. Make a conclusion regarding bitcoin's portability.

Try this in a remote area in your country. Tell me what the local hillbillies would tell you to do with your bitcoins if you want to buy something.

I see potential in digital cash, but to compare it to bank notes is just unrealistic.

[grondilu]

Can't do a whole lot with a hash value; a computer is needed. Cash is low-tech and works. Anywhere. Any time. Bitcoin doesn't come close. Here's an experiment. Go to a local market. Try to buy a loaf of bread with bitcoins. Try again with the local currency. Report your observations. Make a conclusion regarding bitcoin's portability.

I think you are talking about liquidity here.

I'm not sure about the meaning of the word portability in english, but from what I understand of it, bitcoin does very well apply.  In a different manner than cash though, but it does apply.

[davout]

* recognisibility

Definitely not yet. Also, how to recognize an abstract mathematical concept in a way analogous to cash?

All you need to recognize an authentic bitcoin transfer is the proper software. And you can have mathematical certitude that it is authentic. Bitcoins authenticity is much easier to recognize than physical money.

You need a computer. That alone raises the price of entry. With bank notes, you need eyes.

* portability

Not like cash. At least, not yet.

No? You can carry all bitcoins in existence in your pocket if you manage to put them all in one only address. How is that compared to cash?

Can't do a whole lot with a hash value; a computer is needed. Cash is low-tech and works. Anywhere. Any time. Bitcoin doesn't come close. Here's an experiment. Go to a local market. Try to buy a loaf of bread with bitcoins. Try again with the local currency. Report your observations. Make a conclusion regarding bitcoin's portability.

Try this in a remote area in your country. Tell me what the local hillbillies would tell you to do with your bitcoins if you want to buy something.

I see potential in digital cash, but to compare it to bank notes is just unrealistic.

Wow gene, I really missed you!
You successfully demonstrated that "bank notes" != "bitcoin", I'm impressed.

[gene]

Wow gene, I really missed you!
You successfully demonstrated that "bank notes" != "bitcoin", I'm impressed.

De même. However, my point stands. I think it is important to realistically evaluate the limitations of bitcoin rather than going all heads over heels about how bitcoin "fullfills all of" the characteristics of money. Although my point is elementary, I was surprised to see that it not obvious to some.

Also, nobody has contested my assertion that bitcoin is by no means "durable."

[grondilu]

Likewise. However, my point stands. I think it is important to realistically evaluate the limitations of bitcoin rather than going all heads over heels about how bitcoin "fullfills all of" the characteristics of money. Although my point is elementary, I was surprised to see that it not obvious to some.

The ability for a currency to be transfered physically with no electricity, no computer, just "from hand to hand", is very good indeed.  And indeed you can't do that with bitcoins.

But the thing is that the ability to be transfered instantanously in very long distance with almost no cost is just about as good.   You can't do that with physical bank notes.

There are things you can do with bitcoins, that you can't with bank notes, and reciprocally.  Both currencies are "portable", but in different spaces :  physical space for bank notes, cyberspace for bitcoins.

Now you can deny cyberspace has as big an economic importance than physical space if you want.  I don't.

[caveden]

And it's not difficult at all to imagine physical, off line representations of bitcoins that would work pretty much like bank notes did during gold standard. If really demanded, that will be done.

[grondilu]

And it's not difficult at all to imagine physical, off line representations of bitcoins that would work pretty much like bank notes did during gold standard. If really demanded, that will be done.

True.  Especially since that's what a bank note is supposed to be after all :  an IOU.  It could easily be backed by bitcoins.  A bank note is not a currency.  It's a method of payment.

[gene]

But the thing is that the ability to be transfered instantanously in very long distance with almost no cost is just about as good.   You can't do that with physical bank notes.

True. But "with almost no cost" is not on the list of criteria you posted above. The bank notes have equivalent electronic recognition as pertains to the corresponding requirement.

There are things you can do with bitcoins, that you can't with bank notes, and reciprocally.  Both currencies are "portable", but in different spaces :  physical space for bank notes, cyberspace for bitcoins.

No physical manifestation (much less one which is recognized as legitimate) of bitcoin exists. That severely limits its portability as it pertains to practical use for most people.

I can carry USD in my wallet (which said hillbilly would be happy to accept) and have them represented as numbers on a computer screen (which my bank would be happy to transfer).

Now you can deny cyberspace has as big an economic importance than physical space if you want.  I don't.

I suppose it depends by what you define as important. Some would consider buying food and other goods to be important. Others would consider the ability to transfer capital to be important. No matter, by the criteria you listed above, bitcoin still has some way to go. Not saying that it can't happen. Just saying that it is a bit too early to start cheer leading about how wonderful and ready bitcoin is to serve as a currency in any meaningful way.

[gene]

A bank note is not a currency.  It's a method of payment.

Try explaining this distinction to a local merchant. This is the sort of pedantry which will hinder the progress of bitcoin.

[gene]

And it's not difficult at all to imagine physical, off line representations of bitcoins that would work pretty much like bank notes did during gold standard. If really demanded, that will be done.

How would you preserve the unique qualities of bitcoin? If it exists physically, it can be forged. Or it would depend on some central authority. Probably both.

[grondilu]

Try explaining this distinction to a local merchant.

Easy.  It will be written on it.  A bank note usually clearly states what it is.

[gene]

Try explaining this distinction to a local merchant.

Easy.  It will be written on it.  A bank note usually clearly states what it is.

I have a $10 bill in front of me. It says:

Ten Dollars

In a nice old-western typeface.

It also states:

This note is legal tender for all debts, public and private

I failed to locate the text which states

This bank note is not a currency.  It's a method of payment.

Perhaps the euro notes are different?

An old Swiss Frank here states:

Zehn Franken
Diesch Francs

They wanted to make a point in two languages that this note IS 10 Swiss Franks. Those guys are very well-educated, indeed.

[em3rgentOrdr]

I didn't know this guy but I like the way he speaks.

Check out what he says about money in this video for instance :

http://www.youtube.com/watch?v=m2690Fy0sM8


He makes a good sum up of characteristics for good money :

* durability
* divisibility
* recognisibility
* portability
* scarcity


Notice that bitcoin fullfills all of them.

I like this guy.  Walter Block is very intelligent.  And he says "voluntary" a lot, so I like! 

[Sultan]

Imagine a BitCoin bank that creates promissory notes which are pegged to BitCoins, and then the whole miserly process begins again! LOL!

[em3rgentOrdr]

Imagine a BitCoin bank that creates promissory notes which are pegged to BitCoins, and then the whole miserly process begins again! LOL!

This would not happen to a large extent with bitcoins, since your wallet is your bank.  There is no need to store your money somewhere else.  Of course if you like gambling, you could lend your money to some BitCoin bank in exchange for a promissory note...

[grondilu]

Try explaining this distinction to a local merchant.

Easy.  It will be written on it.  A bank note usually clearly states what it is.

I have a $10 bill in front of me. It says:

You challenged me to explain to a local marchant what a bitcoin bank note would be.  I answered you.  The fact that dollars are defined differently is an other matter.  On a bitcoin bank note we would write :  "This note can be redeemed against [XX] bitcoins in [some place]".

[grondilu]

Imagine a BitCoin bank that creates promissory notes which are pegged to BitCoins, and then the whole miserly process begins again! LOL!

This would not happen to a large extent with bitcoins, since your wallet is your bank.  There is no need to store your money somewhere else.  Of course if you like gambling, you could lend your money to some BitCoin bank in exchange for a promissory note...

Exactly.  Also, there is no way you can prevent this usage from happening, with any money.