Why bitcoin isn't currency.

[Jumpy]

First, I dont want this to be true but it is.

Currency is a unit.

It is a unit in the system of measurement of value. Just like an inch is a unit in the system of measurement for length.

Units (and there have been thousands of different ones) all have 2 things in common.

1- They are not real. They are all made up, everyone of them is just an opinion. Inch, pound, meter, cat 5, g force,currency --- not real.
the are all just an opinion that we chose to share. We all share the opinion that an inch is so long, if we all shared the opinion that an inch was a foot then it would be.

2- All units are equal to a constant.

Bitcoin is not a currency because it is not a unit. It has to be definable it has to be equal to something.  An inch is not real but it is definable. 

Hello!

I think you might find it interesting to look into the history of measurements. We have had all kinds of units over the millennia, and our system of units is constantly evolving. Even the SI units which are now used as the common standard in scientific measurements are subject to change.

So you may find that some of the things we currently rely on as 'units' don't actually fit your definition of 'unit'.

Value is probably one of the more complicated things to assign a fixed unit to, because it is so subjective. But I think you're wrong about Bitcoin not being a unit. We have a fixed supply of 21 million Bitcoins. 1 Bitcoin remains constant (i.e. 1 BTC will always = 1 BTC) - its up to us to decide how much we value it.

+1 for the soundest reasoning to date on this thread. Have a cookie!

[1715182052]

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[1715182052]

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[1715182052]

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[1715182052]

1715182052

[GimpyPrime]

It is fixed a unit.  Gold is always gold. It is human perspective that changes.

But yes you are right, the value changes with human perspective. Price is the representation of the change in perspective. It is like this.  

I see your point, but what advantage is there in backing a currency with a measurable unit? In the case of gold, if you back a currency with it then you are now creating an additional use for gold and artificially increasing its worth. This is true for any precious metal. In the USA close to 50% of all silver purchased per year is in the form of coins, now anything that uses silver(Such as electronics) suffers in cost because the demand is higher. Furthermore, as you pointed out even gold suffers from value change due to perception.

You have highlighted an underlying problem with Bitcoin and currencies in general though. It is difficult to price something in Bitcoin because the value changes so rapidly. To me this means that you cannot effectively price goods/services using currency units. I've thought about having a separate unit for measuring value that can be used as a mechanism for pricing, and the only thing that changes is the ratio between this hypothetical value unit and a currency. Even if Bitcoins value stabilizes, we will hopefully move towards competing currencies and this means we need a standard pricing mechanism as an intermediary. I doubt I will have all the answers for this problem though, but I expect something similar will be required eventually.

[Klubknuckle]

It isnt yet, wait until simbabwe use them as a currency after the prime minister understand what that is.

[shawshankinmate37927]

I see your point, but what advantage is there in backing a currency with a measurable unit? In the case of gold, if you back a currency with it then you are now creating an additional use for gold and artificially increasing its worth. This is true for any precious metal. In the USA close to 50% of all silver purchased per year is in the form of coins, now anything that uses silver(Such as electronics) suffers in cost because the demand is higher. Furthermore, as you pointed out even gold suffers from value change due to perception.

You have highlighted an underlying problem with Bitcoin and currencies in general though. It is difficult to price something in Bitcoin because the value changes so rapidly. To me this means that you cannot effectively price goods/services using currency units. I've thought about having a separate unit for measuring value that can be used as a mechanism for pricing, and the only thing that changes is the ratio between this hypothetical value unit and a currency. Even if Bitcoins value stabilizes, we will hopefully move towards competing currencies and this means we need a standard pricing mechanism as an intermediary. I doubt I will have all the answers for this problem though, but I expect something similar will be required eventually.

Hopefully, Bitcoin will become that standard pricing mechanism.  Instead of pricing bitcoins in dollars, we'll be pricing dollars and all of the other fiat and crypto currencies in bitcoins.  The value of a bitcoin, when measured with dollars, isn't going to stabilize because the dollar will not stop losing value until it no longer exists and has the same value as the other fiat currencies that have failed throughout history.

[Tirapon]

+1 for the soundest reasoning to date on this thread. Have a cookie!

Thanks! (eats cookie, nom nom nom...)

I think the best responses in this thread were:

Fucking words, how do they work?

and:

[sublime5447]

First, I dont want this to be true but it is.

Currency is a unit.

It is a unit in the system of measurement of value. Just like an inch is a unit in the system of measurement for length.

Units (and there have been thousands of different ones) all have 2 things in common.

1- They are not real. They are all made up, everyone of them is just an opinion. Inch, pound, meter, cat 5, g force,currency --- not real.
the are all just an opinion that we chose to share. We all share the opinion that an inch is so long, if we all shared the opinion that an inch was a foot then it would be.

2- All units are equal to a constant.

Bitcoin is not a currency because it is not a unit. It has to be definable it has to be equal to something.  An inch is not real but it is definable.  

Hello!

I think you might find it interesting to look into the history of measurements. We have had all kinds of units over the millennia, and our system of units is constantly evolving. Even the SI units which are now used as the common standard in scientific measurements are subject to change.

So you may find that some of the things we currently rely on as 'units' don't actually fit your definition of 'unit'.

Value is probably one of the more complicated things to assign a fixed unit to, because it is so subjective. But I think you're wrong about Bitcoin not being a unit. We have a fixed supply of 21 million Bitcoins. 1 Bitcoin remains constant (i.e. 1 BTC will always = 1 BTC) - its up to us to decide how much we value it.

+1 for the soundest reasoning to date on this thread. Have a cookie!

Do you see your equation?

1 bitcoin = 1 bitcoin  is like saying this

1 inch = 1 inch
1 pound = 1 pound
1 byte = 1 byte.

That is not how units work! They are all equal to something that is objectively real.

If that is sound reasoning I must be fucked in the head.  

[Tirapon]

Do you see your equation?

1 bitcoin = 1 bitcoin  is like saying this

1 inch = 1 inch
1 pound = 1 pound
1 byte = 1 byte.

That is not how units work! The are all equal to something that is objectively real.

If that is sound reasoning I must be fucked in the head.  

I'm currently in my third year of a Chemistry-Physics degree, so I'm actually quite familiar with units. Don't worry, you're not fucked in the head, your reasoning is just slightly off.

Let me give you an example of a time when we made a change to our definition of a very common unit:

The metre, a well know unit of measurement, was once defined by a standard platinum bar. The bar was created to act as the universally agreed upon definition of 1 metre, and was therefore by definition exactly one metre long. This was consistent to within a certain degree, but of course changes in e.g. temperature/pressure could in fact cause the length to vary slightly. Parameters were introduced to improve the consistency (specific temperature and pressure at which the length of the bar would considered to be exactly one metre) but unfortunately, using a physical object to act as a benchmark can never be as accurate as the scientific community would like.

It was therefore decided that we should redefine the metre, without using a physical object. Einstein had shown, in his theory of relativity, that the speed of light is in fact a universal constant when measured within the same medium. It therefore made sense to redefine the metre in terms of this unchanging physical constant. Our definition of the metre is now 'The length of the path travelled by light in a vacuum in 1⁄299,792,458 of a second'

Your idea that units must be 'equal to something that is 'objectively real', while it may seem somewhat intuitive, is actually a slight misunderstanding. The fact that it is so difficult to find consistency in objective reality is what makes the task of measuring things so tricky.

Back to Bitcoin:

Bitcoin is actually a great starting point if we want to define a system of measurement for value. What we are effectively doing is defining a standard unit of value, i.e. 1 bitcoin, which can act as a universal constant similar to the speed of light in the example above. Now we have our benchmark (which doesn't fluctuate due to changes in temperature/pressure etc.), and we can start to decide how to value everything else in comparison to it. (notice that making measurements always boils down to making comparisons between things)

Of course, being so new, and being introduced to a society who are so used to valuing things in a different way (namely whichever fiat currency they grew up with), make things more complicated (as well as a million other things, economics can't really be compared with science due to the numerous factors to consider, but we're talking about units here). We are still in price discovery phase with people having to shift their perspectives and adjust. It is yet to be seen whether or not the population as a whole will accept this new measurement system.

The problem of making measurements and defining units is and always had been at the heart of the scientific discipline. Its an interesting subject, and there's a great deal of understanding to be gained by studying it in a bit more depth.

[notme]

Do you see your equation?

1 bitcoin = 1 bitcoin  is like saying this

1 inch = 1 inch
1 pound = 1 pound
1 byte = 1 byte.

That is not how units work! The are all equal to something that is objectively real.

If that is sound reasoning I must be fucked in the head. 

I'm currently in my third year of a Chemistry-Physics degree, so I'm actually quite familiar with units. Don't worry, you're not fucked in the head, your reasoning is just slightly off.

Let me give you an example of a time when we made a change to our definition of a very common unit:

The metre, a well know unit of measurement, was once defined by a standard platinum bar. The bar was created to act as the universally agreed upon definition of 1 metre, and was therefore by definition exactly one metre long. This was consistent to within a certain degree, but of course changes in e.g. temperature/pressure could in fact cause the length to vary slightly. Parameters were introduced to improve the consistency (specific temperature and pressure at which the length of the bar would considered to be exactly one metre) but unfortunately, using a physical object to act as a benchmark can never be as accurate as the scientific community would like.

It was therefore decided that we should redefine the metre, without using a physical object. Einstein had shown, in his theory of relativity, that the speed of light is in fact a universal constant when measured within the same medium. It therefore made sense to redefine the metre in terms of this unchanging physical constant. Our definition of the metre is now 'The length of the path travelled by light in a vacuum in 1⁄299,792,458 of a second'

Your idea that units must be 'equal to something that is objectively real', while it may seem somewhat intuitive, is actually a slight misunderstanding. The fact that it is so difficult to find consistency in objective reality is what makes the task of measuring things so tricky.

Back to Bitcoin:

Bitcoin is actually a great starting point if we want to define a system of measurement for value. What we are effectively doing is defining a standard unit of value, i.e. 1 bitcoin, which can act as a universal constant similar to the speed of light in the example above. Now we have our benchmark (which doesn't fluctuate due to changes in temperature/pressure etc.), and we can start to decide how to value everything else in comparison to it. (notice that making measurements always boils down to making comparisons between things)

Of course, being so new, and being introduced to a society who are so used to valuing things in a different way (namely whichever fiat currency they grew up with), make things more complicated (as well as a million other things, economics can't really be compared with science due to the numerous factors to consider, but we're talking about units here). We are still in price discovery phase with people having to shift their perspectives and adjust. It is yet to be seen whether or not the population as a whole will accept this new measurement system.

The problem of making measurements and defining units is and always had been at the heart of the scientific discipline. Its an interesting subject, and there's a great deal of understanding to be gained by studying it in a bit more depth.

This.  Bitcoin is a proposal for a unit that anyone can use.  If it is adopted as a transactional currency, it will become a unit by which things are measured.

[mootinator]

Do you see your equation?

1 bitcoin = 1 bitcoin  is like saying this

1 inch = 1 inch
1 pound = 1 pound
1 byte = 1 byte.

That is not how units work! The are all equal to something that is objectively real.

If that is sound reasoning I must be fucked in the head. 

I'm currently in my third year of a Chemistry-Physics degree, so I'm actually quite familiar with units. Don't worry, you're not fucked in the head, your reasoning is just slightly off.

Let me give you an example of a time when we made a change to our definition of a very common unit:

The metre, a well know unit of measurement, was once defined by a standard platinum bar. The bar was created to act as the universally agreed upon definition of 1 metre, and was therefore by definition exactly one metre long. This was consistent to within a certain degree, but of course changes in e.g. temperature/pressure could in fact cause the length to vary slightly. Parameters were introduced to improve the consistency (specific temperature and pressure at which the length of the bar would considered to be exactly one metre) but unfortunately, using a physical object to act as a benchmark can never be as accurate as the scientific community would like.

It was therefore decided that we should redefine the metre, without using a physical object. Einstein had shown, in his theory of relativity, that the speed of light is in fact a universal constant when measured within the same medium. It therefore made sense to redefine the metre in terms of this unchanging physical constant. Our definition of the metre is now 'The length of the path travelled by light in a vacuum in 1⁄299,792,458 of a second'

Your idea that units must be 'equal to something that is objectively real', while it may seem somewhat intuitive, is actually a slight misunderstanding. The fact that it is so difficult to find consistency in objective reality is what makes the task of measuring things so tricky.

Back to Bitcoin:

Bitcoin is actually a great starting point if we want to define a system of measurement for value. What we are effectively doing is defining a standard unit of value, i.e. 1 bitcoin, which can act as a universal constant similar to the speed of light in the example above. Now we have our benchmark (which doesn't fluctuate due to changes in temperature/pressure etc.), and we can start to decide how to value everything else in comparison to it. (notice that making measurements always boils down to making comparisons between things)

Of course, being so new, and being introduced to a society who are so used to valuing things in a different way (namely whichever fiat currency they grew up with), make things more complicated (as well as a million other things, economics can't really be compared with science due to the numerous factors to consider, but we're talking about units here). We are still in price discovery phase with people having to shift their perspectives and adjust. It is yet to be seen whether or not the population as a whole will accept this new measurement system.

The problem of making measurements and defining units is and always had been at the heart of the scientific discipline. Its an interesting subject, and there's a great deal of understanding to be gained by studying it in a bit more depth.

This.  Bitcoin is a proposal for a unit that anyone can use.  If it is adopted as a transactional currency, it will become a unit by which things are measured.

Ideally at a rate of 1 Bitcoin = 1 McMansion

[MAbtc]

I don't see OP as a good basis for this, but I also don't view bitcoin as a currency as it is not really used as a medium of exchange. Dollars are generally used as the medium of exchange for bitcoin. This is similar to gold -- also not a currency. Especially with SR gone... Bitpay is most of the economy, and Bitpay bases everything on dollars.

[Tirapon]

I don't see OP as a good basis for this, but I also don't view bitcoin as a currency as it is not really used as a medium of exchange. Dollars are generally used as the medium of exchange for bitcoin. This is similar to gold -- also not a currency. Especially with SR gone... Bitpay is most of the economy, and Bitpay bases everything on dollars.

Need more patience.

[sublime5447]

Do you see your equation?

1 bitcoin = 1 bitcoin  is like saying this

1 inch = 1 inch
1 pound = 1 pound
1 byte = 1 byte.

That is not how units work! The are all equal to something that is objectively real.

If that is sound reasoning I must be fucked in the head.  

I'm currently in my third year of a Chemistry-Physics degree, so I'm actually quite familiar with units. Don't worry, you're not fucked in the head, your reasoning is just slightly off.

Let me give you an example of a time when we made a change to our definition of a very common unit:

The metre, a well know unit of measurement, was once defined by a standard platinum bar. The bar was created to act as the universally agreed upon definition of 1 metre, and was therefore by definition exactly one metre long. This was consistent to within a certain degree, but of course changes in e.g. temperature/pressure could in fact cause the length to vary slightly. Parameters were introduced to improve the consistency (specific temperature and pressure at which the length of the bar would considered to be exactly one metre) but unfortunately, using a physical object to act as a benchmark can never be as accurate as the scientific community would like.

It was therefore decided that we should redefine the metre, without using a physical object. Einstein had shown, in his theory of relativity, that the speed of light is in fact a universal constant when measured within the same medium. It therefore made sense to redefine the metre in terms of this unchanging physical constant. Our definition of the metre is now 'The length of the path travelled by light in a vacuum in 1⁄299,792,458 of a second'

Your idea that units must be 'equal to something that is objectively real', while it may seem somewhat intuitive, is actually a slight misunderstanding. The fact that it is so difficult to find consistency in objective reality is what makes the task of measuring things so tricky.

Back to Bitcoin:

Bitcoin is actually a great starting point if we want to define a system of measurement for value. What we are effectively doing is defining a standard unit of value, i.e. 1 bitcoin, which can act as a universal constant similar to the speed of light in the example above. Now we have our benchmark (which doesn't fluctuate due to changes in temperature/pressure etc.), and we can start to decide how to value everything else in comparison to it. (notice that making measurements always boils down to making comparisons between things)

Of course, being so new, and being introduced to a society who are so used to valuing things in a different way (namely whichever fiat currency they grew up with), make things more complicated (as well as a million other things, economics can't really be compared with science due to the numerous factors to consider, but we're talking about units here). We are still in price discovery phase with people having to shift their perspectives and adjust. It is yet to be seen whether or not the population as a whole will accept this new measurement system.

The problem of making measurements and defining units is and always had been at the heart of the scientific discipline. Its an interesting subject, and there's a great deal of understanding to be gained by studying it in a bit more depth.

This.  Bitcoin is a proposal for a unit that anyone can use.  If it is adopted as a transactional currency, it will become a unit by which things are measured.

 

Notice in the above example the unit remained something objectively real. Because you cant measure an opinion with an opinion.  

[gaston909]

But....


BITCOIN! BTC

[westkybitcoins]

Do you see your equation?

1 bitcoin = 1 bitcoin  is like saying this

1 inch = 1 inch
1 pound = 1 pound
1 byte = 1 byte.

That is not how units work! The are all equal to something that is objectively real.

If that is sound reasoning I must be fucked in the head.  

I'm currently in my third year of a Chemistry-Physics degree, so I'm actually quite familiar with units. Don't worry, you're not fucked in the head, your reasoning is just slightly off.

Let me give you an example of a time when we made a change to our definition of a very common unit:

The metre, a well know unit of measurement, was once defined by a standard platinum bar. The bar was created to act as the universally agreed upon definition of 1 metre, and was therefore by definition exactly one metre long. This was consistent to within a certain degree, but of course changes in e.g. temperature/pressure could in fact cause the length to vary slightly. Parameters were introduced to improve the consistency (specific temperature and pressure at which the length of the bar would considered to be exactly one metre) but unfortunately, using a physical object to act as a benchmark can never be as accurate as the scientific community would like.

It was therefore decided that we should redefine the metre, without using a physical object. Einstein had shown, in his theory of relativity, that the speed of light is in fact a universal constant when measured within the same medium. It therefore made sense to redefine the metre in terms of this unchanging physical constant. Our definition of the metre is now 'The length of the path travelled by light in a vacuum in 1⁄299,792,458 of a second'

Your idea that units must be 'equal to something that is objectively real', while it may seem somewhat intuitive, is actually a slight misunderstanding. The fact that it is so difficult to find consistency in objective reality is what makes the task of measuring things so tricky.

Back to Bitcoin:

Bitcoin is actually a great starting point if we want to define a system of measurement for value. What we are effectively doing is defining a standard unit of value, i.e. 1 bitcoin, which can act as a universal constant similar to the speed of light in the example above. Now we have our benchmark (which doesn't fluctuate due to changes in temperature/pressure etc.), and we can start to decide how to value everything else in comparison to it. (notice that making measurements always boils down to making comparisons between things)

Of course, being so new, and being introduced to a society who are so used to valuing things in a different way (namely whichever fiat currency they grew up with), make things more complicated (as well as a million other things, economics can't really be compared with science due to the numerous factors to consider, but we're talking about units here). We are still in price discovery phase with people having to shift their perspectives and adjust. It is yet to be seen whether or not the population as a whole will accept this new measurement system.

The problem of making measurements and defining units is and always had been at the heart of the scientific discipline. Its an interesting subject, and there's a great deal of understanding to be gained by studying it in a bit more depth.

This.  Bitcoin is a proposal for a unit that anyone can use.  If it is adopted as a transactional currency, it will become a unit by which things are measured.

 

Notice in the above example the unit remained something objectively real. Because you cant measure an opinion with an opinion.  

How is one unit of account in the Bitcoin blockchain ledger--a value measurable and calculable, mind you--any less objectively real than "the distance light travels in 1⁄299,792,458 of a second in a vacuum?"

[sublime5447]

Do you see your equation?

1 bitcoin = 1 bitcoin  is like saying this

1 inch = 1 inch
1 pound = 1 pound
1 byte = 1 byte.

That is not how units work! The are all equal to something that is objectively real.

If that is sound reasoning I must be fucked in the head.  

I'm currently in my third year of a Chemistry-Physics degree, so I'm actually quite familiar with units. Don't worry, you're not fucked in the head, your reasoning is just slightly off.

Let me give you an example of a time when we made a change to our definition of a very common unit:

The metre, a well know unit of measurement, was once defined by a standard platinum bar. The bar was created to act as the universally agreed upon definition of 1 metre, and was therefore by definition exactly one metre long. This was consistent to within a certain degree, but of course changes in e.g. temperature/pressure could in fact cause the length to vary slightly. Parameters were introduced to improve the consistency (specific temperature and pressure at which the length of the bar would considered to be exactly one metre) but unfortunately, using a physical object to act as a benchmark can never be as accurate as the scientific community would like.

It was therefore decided that we should redefine the metre, without using a physical object. Einstein had shown, in his theory of relativity, that the speed of light is in fact a universal constant when measured within the same medium. It therefore made sense to redefine the metre in terms of this unchanging physical constant. Our definition of the metre is now 'The length of the path travelled by light in a vacuum in 1⁄299,792,458 of a second'

Your idea that units must be 'equal to something that is objectively real', while it may seem somewhat intuitive, is actually a slight misunderstanding. The fact that it is so difficult to find consistency in objective reality is what makes the task of measuring things so tricky.

Back to Bitcoin:

Bitcoin is actually a great starting point if we want to define a system of measurement for value. What we are effectively doing is defining a standard unit of value, i.e. 1 bitcoin, which can act as a universal constant similar to the speed of light in the example above. Now we have our benchmark (which doesn't fluctuate due to changes in temperature/pressure etc.), and we can start to decide how to value everything else in comparison to it. (notice that making measurements always boils down to making comparisons between things)

Of course, being so new, and being introduced to a society who are so used to valuing things in a different way (namely whichever fiat currency they grew up with), make things more complicated (as well as a million other things, economics can't really be compared with science due to the numerous factors to consider, but we're talking about units here). We are still in price discovery phase with people having to shift their perspectives and adjust. It is yet to be seen whether or not the population as a whole will accept this new measurement system.

The problem of making measurements and defining units is and always had been at the heart of the scientific discipline. Its an interesting subject, and there's a great deal of understanding to be gained by studying it in a bit more depth.

This.  Bitcoin is a proposal for a unit that anyone can use.  If it is adopted as a transactional currency, it will become a unit by which things are measured.

 

Notice in the above example the unit remained something objectively real. Because you cant measure an opinion with an opinion.  

How is one unit of account in the Bitcoin blockchain ledger--a value measurable and calculable, mind you--any less objectively real than "the distance light travels in 1⁄299,792,458 of a second in a vacuum?"

Because whether a human perceives it or not a ray of light travels that distance through a vacuum. The blockchain doesn't really exist without human perception it is not objectively real it doesnt exist without us, it is a concept of man. 

[Tirapon]

Because whether a human perceives it or not a ray of light travels that distance through a vacuum.

You might also be interested in learning a bit about quantum physics.

(you may find 'objective reality' to be slightly more fickle than you assume)

[westkybitcoins]

How is one unit of account in the Bitcoin blockchain ledger--a value measurable and calculable, mind you--any less objectively real than "the distance light travels in 1⁄299,792,458 of a second in a vacuum?"

Because whether a human perceives it or not a ray of light travels that distance through a vacuum. The blockchain doesn't really exist without human perception it is not objectively real it doesnt exist without us, it is a concept of man. 

Sure the blockchain exists.

Those markings in the Bitcoin ledger exist, just as much as ink markings made on a piece of paper. It's as real as a skyscraper, a bestselling novel or a computer virus. If every human on earth suddenly dropped dead, not only would the blockchain still exist, it would even continue to be updated for quite some time (until the power grid failed, anyway.)

Just because it's man-made doesn't mean it's "not objectively real."

[JimboToronto]

Since 1983, a meter has been defined

as "the length of the path travelled by light in vacuum during a time interval of 1/299,792,458 of a second."

Now define "second" without mentioning distance or mass. 

All is relative.

[notme]

Since 1983, a meter has been defined

as "the length of the path travelled by light in vacuum during a time interval of 1/299,792,458 of a second."

Now define "second" without mentioning distance or mass. 

All is relative.

the duration of 9,192,631,770 periods of the radiation corresponding to the transition between the two hyperfine levels of the ground state of the caesium 133 atom.

[Pente]

A Bitcoin is 1/21,000,000 of the bitcoin protocol.