Why bitcoin isn't currency.

[sublime5447]

I mean that the unit of measure is objectively valuable. Like gold, or joules of work. 

There is no place for objective value in modern economics in the sense you mean here. The theories claiming otherwise (for example, labor theory of value or intrinsic theory of value) have been abandoned by most economists for not being able to correctly describe real life economic phenomena...

There is an objective theory of value and it has not been abandoned also there is a reason it is called a theory and not a law. 
http://mises.org/daily/4907/

"The actual process through which subjective valuations lead to objective market prices is complicated. The average person doesn't need to understand it. However, everyone should be aware of the basic principles of modern value theory, as sketched in this article. Precisely because value is subjective, voluntary trades are win-win situations. At the same time, market prices are objective measures of wealth, and they allow firms to calculate whether they are using resources efficiently or not."

The theory you are referring to here is correctly called subjective theory of value. And it is accepted by most mainstream schools of economics. Actually, I meant exactly this theory when I wrote that there is no objective value in modern economics...

You obviously didnt read the article. Value is subjective to the individual... but objective to the market.

[sublime5447]

"One of the most subtle aspects of modern economic theory is the relation between subjective value and objective money prices."

[deisik]

There is an objective theory of value and it has not been abandoned also there is a reason it is called a theory and not a law. 
http://mises.org/daily/4907/

"The actual process through which subjective valuations lead to objective market prices is complicated. The average person doesn't need to understand it. However, everyone should be aware of the basic principles of modern value theory, as sketched in this article. Precisely because value is subjective, voluntary trades are win-win situations. At the same time, market prices are objective measures of wealth, and they allow firms to calculate whether they are using resources efficiently or not."

The theory you are referring to here is correctly called subjective theory of value. And it is accepted by most mainstream schools of economics. Actually, I meant exactly this theory when I wrote that there is no objective value in modern economics...

You obviously didnt read the article. Value is subjective to the individual... but objective to the market.

What you (they) name here as objective value is called price... I intentionally asked you what you meant by objective value. Your answer was that objective value is "the unit of measure is objectively valuable. Like gold, or joules of work"...

[sublime5447]

+1 it is obvious at this point that it is not currency, but a asset like art or baseball cards.. that is to say a shit asset with no objective measure of value.

Objective measure of value? What do you mean by this and is there any at all (with no concern for Bitcoin)?

I mean that the unit of measure is objectively valuable. Like gold, or joules of work.  

Or art, or baseball cards, or bitcoins?

None of those things have objective value. Water and food have objective value to life. Things with objective value can be phased as a fact. For example I can say that mankind values water, I can not say that mankind values baseball cards or bitcoins.

[sublime5447]

No i cant say that mankind value art... I can only say that some of mankind values art.

If you really believe that bitcoin is a good store of value you have not been paying attention.

[deisik]

None of those things have objective value. Water and food have objective value to life. Things with objective value can be phased as a fact. For example I can say that mankind values water, I can not say that mankind values baseball cards or bitcoins.

Actually, read that article from which you quoted, the subjective theory of value does explain it in a simple and coherent way. Or, if you have time, read Carl Menger's Principles of Economics (it is not big), the book which gave rise to that theory... Water as well as air (and anything for that matter), they all have subjective value (if you're drowning the subjective value of water will be negative to you), that book explains such things pretty well...

[porc]

Bitcoin itself has no value. Now you might say that Bitcoin can be transferred cheaply. Well that does not give the unit Bitcoin any value whatsoever. If I say "dadljf" can be transferred cheaply does that make "dadljf" valuable? Of course not!

But "dadljf" can't be transferred cheaply. It can be copied cheaply, but it can't be transferred cheaply. There's nothing stopping you from double spending it.

Now lets look at gold. What is golds value to humanity? Well it looks pretty. If I wear it people will say: Wow that looks great I want it. Now do you agree that gold looks pretty? Well it doesnt matter. What you do know is that you also like pretty things. If you think gold is pretty is irrelevant.

What if I think bitcoins are pretty?

Now you might ask how can we price the dollar? Well the dollar was backed by gold and gold was valuable. So you could price things in dollars.

What about the Euro?

Now why is inherent value of the dollar now? Well it is valuable because the government forces us to use it.

I've never been forced to use the dollar.

So if you exchange bitcoins for goods, you essentially have traded them for lottery tickets.

What's wrong with trading things for lottery tickets?

Read and comprehend before you start writing. 1) as I said the transfer part is irrelevant for bitcoins value. A bitcoin is not valuable just because I can transfer it cheaply. If I could transfer "adfadf" cheaply it would not make "adfadf" valuable. Get it? 2) Bitcoins are not real so they cant be pretty. If you like the logo the logo is not rare. Think before you spam! 3) "Ive never been forced to use the dollar" not worth replying to 4) whats wrong with trading things for lottery tickets? are you trolling...

[shawshankinmate37927]

Now lets look at gold. What is golds value to humanity? Well it looks pretty. If I wear it people will say: Wow that looks great I want it. Now do you agree that gold looks pretty? Well it doesnt matter. What you do know is that you also like pretty things. If you think gold is pretty is irrelevant.

What about tulips?  Do you think they're pretty too?

[porc]

Now lets look at gold. What is golds value to humanity? Well it looks pretty. If I wear it people will say: Wow that looks great I want it. Now do you agree that gold looks pretty? Well it doesnt matter. What you do know is that you also like pretty things. If you think gold is pretty is irrelevant.

What about tulips?  Do you think they're pretty too?

you have not read and thought about what I wrote: gold is pretty and rare and thus valuable. Tulips are pretty but not rare.

[deisik]

For example I could say that one ocean front villa is worth 10 Ferrari. Now that is obviously my judgement and therefore is subjective. However everybody will have an opinion on this price. Some will say it is to high (villa is worth less Ferrari) and some will say it is to low (villa is worth more Ferrari).

Now what is clear from the above example is that I can only measure value by something which is itself valuable. This should be obvious: something has value can not be measured by something that has no value!

Bitcoin itself has no value. Now you might say that Bitcoin can be transferred cheaply. Well that does not give the unit Bitcoin any value whatsoever. If "dadljf" could be transferred cheaply does that make "dadljf" valuable? Of course not!

As far as economics is concerned, nothing has value in itself and by itself. Value is not established by some inherent quality of the good (intrinsic theory of value, abandoned) or amount of labor required to produce it (labor theory of value, abandoned), but is determined by the importance an individual places on it for the achievement of his ends. The latter refers to the subjective theory of value accepted by most economic schools of today

And stop cross-posting...

[porc]

For example I could say that one ocean front villa is worth 10 Ferrari. Now that is obviously my judgement and therefore is subjective. However everybody will have an opinion on this price. Some will say it is to high (villa is worth less Ferrari) and some will say it is to low (villa is worth more Ferrari).

Now what is clear from the above example is that I can only measure value by something which is itself valuable. This should be obvious: something has value can not be measured by something that has no value!

Bitcoin itself has no value. Now you might say that Bitcoin can be transferred cheaply. Well that does not give the unit Bitcoin any value whatsoever. If "dadljf" could be transferred cheaply does that make "dadljf" valuable? Of course not!

As far as economics is concerned, nothing has value in itself and by itself. Value is not established by some inherent quality of the good (intrinsic theory of value, abandoned) or amount of labor required to produce it (labor theory of value, abandoned), but is determined by the importance an individual places on it for the achievement of his ends. The latter refers to the subjective theory of value accepted by most economic schools of today

And stop cross-posting...

What you just wrote is not relevant to my post.

[sublime5447]

Is the community ready to admit that it is not currency? 

[MoonShadow]

Is the community ready to admit that it is not currency? 

Of course not.  Bitcoin is, by definition and design, a currency.  Your arguments are rediculous.

[sublime5447]

Is the community ready to admit that it is not currency?  

Of course not.  Bitcoin is, by definition and design, a currency.  Your arguments are rediculous.

No one can define bitcoin that is the problem and I am not the only one saying it. Peter Shciff, Gary north, Paul krugman, the central bank of china, business insider and many more

[MoonShadow]

Is the community ready to admit that it is not currency? 

Of course not.  Bitcoin is, by definition and design, a currency.  Your arguments are rediculous.

No one can define bitcoin that is the problem.

I can and have.  Your problem is that you won't accept my definition of "currency".

[sublime5447]

Is the community ready to admit that it is not currency? 

Of course not.  Bitcoin is, by definition and design, a currency.  Your arguments are rediculous.

No one can define bitcoin that is the problem.

I can and have.  Your problem is that you won't accept my definition of "currency".

Really what was the definition again? 

[Erdogan]

Is the community ready to admit that it is not currency?  

Of course not.  Bitcoin is, by definition and design, a currency.  Your arguments are rediculous.

No one can define bitcoin that is the problem and I am not the only one saying it. Peter Shciff, Gary north, Paul krugman, the central bank of china, business insider and many more

They will have to come here and back up their statements with reason and logic.

[niothor]

Is the community ready to admit that it is not currency?  

Of course not.  Bitcoin is, by definition and design, a currency.  Your arguments are rediculous.

No one can define bitcoin that is the problem and I am not the only one saying it. Peter Shciff, Gary north, Paul krugman, the central bank of china, business insider and many more

They will have to come here and back up their statements with reason and logic.

And have some arguments against the other definitions as well.

Because an orange is round, orange and a fruit the same time.

[sublime5447]

http://www.garynorth.com/public/11857.cfm

http://www.businessinsider.com/why-bitcoin-will-never-be-a-currency--in-two-charts-2013-12?pundits_only=0&comments_page=0#comment-52ade9fc6bb3f74a0b70d7f2

http://www.garynorth.com/public/11854.cfm

http://teapartyeconomist.com/2013/12/09/bitcoins-inside-dope/

http://teapartyeconomist.com/2013/12/06/bitcoins-threat-federal-reserve-system/

http://www.businessinsider.com/the-fair-price-of-a-bitcoin-is-zero-2013-12

http://www.zerohedge.com/news/2013-12-04/greenspan-baffled-over-bitcoin-bubble-be-worth-something-it-must-be-backed-something

http://drivebycuriosity.blogspot.com/2013/11/economy-why-bitcoin-is-toy-and-not.html?showComment=1386215068159#c6338894686337072959

http://www.youtube.com/watch?v=cV-32qmLG64  This one is with me and a bitcoin supporter.

http://www.garynorth.com/public/11843.cfm

http://www.youtube.com/watch?v=0L7SOPDOvvI

http://www.theatlantic.com/business/archive/2013/04/bitcoin-is-no-longer-a-currency/274859/

[MoonShadow]

Is the community ready to admit that it is not currency? 

Of course not.  Bitcoin is, by definition and design, a currency.  Your arguments are rediculous.

No one can define bitcoin that is the problem.

I can and have.  Your problem is that you won't accept my definition of "currency".

Really what was the definition again? 

A "currency" is a designed medium of exchange, that may or may not be "backed" by a commodity, or may or may not be "backed" as legal tender by some government.  While a money, such as gold, can be minted into coins (and thus also be a currency) a true money is a common commodity that functions as a medium of exchange in a free market, but may not have a 'standard' unit.  By coining that gold into a standard unit, such as a one troy ounce shape with some king's face on it, and declaring it the official money of the realm, a currency is created.  However, the past 100 or so years are proof enough that once a currency is well established and trusted to continue; the original money behind the currency is often no longer necessary.  All fiat currencies are designed by men, whether or not they ever contained (or were otherwise backed by) gold or silver.  Bitcoin is a currency because it was designed (presumedly by one or more human beings) to function as a medium of exchange on the Internet.  Whether or not Bitcoin is a good currency or not is up for debate, and whether or not any particular government agency desires to recognize that Bitcoin is a currency or not is irrelevent; but Bitcoin is a currency regardless.

It is not, however, a true money; because regardless of how useful it is as a medium of exchange, or even as a store of value, Bitcoin never had a pre-existing and non-monetary utility that would have driven it's adoption in a free market as a highly marketable good.

Nor is Bitcoin a fiat currency, because no government institution requires it's use in any context.  Bitcoin is difficult for some to explain, or even wrap their heads around, because it's something new in the realm of exchange mediums.  It's closest to a LETS (Local area Exchange system) wherein the local area is the entire Internet, and that uses triple entry accounting to track exchanges; but it's not a debt based system and the total number of currency units are fixed and known at any given point in time.