Bitcoin as a money: when it can proclaimed as a "store of value"?

[greyman]

For something to be considered as money, it must fulfill 3 basic functions of money. Namely, to be a medium of exchange, a unit of account, and a store of value.

1) medium of exchange - I think we are moving towards this goal, as more and more goods are services will be exchangeable with bitcoin. At least the Bitcoin network fully supports this function.

2) an unit of account - whatever can be evaluated by fiat money can also be evaluated in Bitcoin. Bitcoin is divisible into smaller units, and is fungible. Also, Germany already recognized Bitcoin as an unit of account, so no problem here.

3) store of value - money must be able to be reliably saved, stored, and retrieved later and be predictably usable as a medium of exchange. Here, I see the reason why someone would be hesitant to formally declare Bitcoin as money. And I don't mean the high volatility now. The issue is, that we would need some formal guaranties, that the Bitcoin network will always run properly, that it will not be switched off by whatever reason for example, will not be cracked, will work also with high volume of transactions, etc. If this is not guaranteed to a reasonable degree, it is not then a "store of value" - or at least the officials may claim that. Would you agree?

[1714788507]

1714788507

[1714788507]

1714788507

[1714788507]

1714788507

[1714788507]

1714788507

[superresistant]

3) store of value - money must be able to be reliably saved, stored, and retrieved later and be predictably usable as a medium of exchange. Here, I see the reason why someone would be hesitant to formally declare Bitcoin as money. And I don't mean the high volatility now. The issue is, that we would need some formal guaranties, that the Bitcoin network will always run properly, that it will not be switched off by whatever reason for example, will not be cracked, will work also with high volume of transactions, etc. If this is not guaranteed to a reasonable degree, it is not then a "store of value" - or at least the officials may claim that. Would you agree?

I don't agree on that point. Bitcoin is a store of value. It doesn't loose its value with time contrary to FIAT money.
You cannot get stolen if you use an offline paper wallet.
The variation on the short term doesn't matter as long as it get value on long term which is the case.

[greyman]

I don't agree on that point. Bitcoin is a store of value. It doesn't loose its value with time contrary to FIAT money.
You cannot get stolen if you use an offline paper wallet.
The variation on the short term doesn't matter as long as it get value on long term which is the case.

Yes, but it would loose the value IF the Bitcoin network would stop operating, right? We all know that there is an extremely small chance for this to happen, but if someone would want to make government to recognize this, shouldn't there be some formal proof? (I am just asking).

[cdog]

The issue is, that we would need some formal guaranties, that the Bitcoin network will always run properly, that it will not be switched off by whatever reason for example, will not be cracked, will work also with high volume of transactions, etc. If this is not guaranteed to a reasonable degree, it is not then a "store of value" - or at least the officials may claim that. Would you agree?

This didnt require its own thread as its nearly identical to another on BTCT, but yes, Bitcoin has "formal guarantees" in the form of math:

If you wake up tomorrow, and 2+2=3, then we are going to have much bigger problems than finding all our bitcoins.

Also, you make it seems like its an either/or proposition, when its not. Bitcoin can be functional currency and store of value while being imperfect.

[odolvlobo]

I don't agree on that point. Bitcoin is a store of value. It doesn't loose its value with time contrary to FIAT money.
You cannot get stolen if you use an offline paper wallet.
The variation on the short term doesn't matter as long as it get value on long term which is the case.

Yes, but it would lose the value IF the Bitcoin network would stop operating, right?

You can't say that bitcoin isn't money because something might happen. The U.S. dollar would no longer be a store of value if someone at the Fed accidentally (or on purpose) pressed a button and increased the money supply by a factor of 100. Does that mean that the dollar is not money?

[Ibian]

Electronic gold coins. That's what bitcoin is. Get over it already. Forget your fiat theories, forget everything you have been taught and think you know. Look at what is.

[Carlton Banks]

To respond directly to the OP:

It's secure in the short to medium term. You only have to look at the market in mining equipment. The market will happily buy all (future promise of) stock that the mining companies/R&D experiments will offer. The idea that they can make more BTC putting that cash directly into BTC holdings isn't interesting, apparently. This has been happening for a the whole of 2013, and until it ends, the future of the network is looking good.

[BitCoinMiner01]

I find #2 to be more interesting in regards to Bitcoin as money.  A unit of account is something that Bitcoin does not have (in most people's minds) currently.  That is, if you asked someone how much a candy bar costs in Bitcoin, they would first have to convert it to USD etc.  But exchanges like Cryptsy may be changing that sooner than later.

[greyman]

I find #2 to be more interesting in regards to Bitcoin as money.  A unit of account is something that Bitcoin does not have (in most people's minds) currently.  That is, if you asked someone how much a candy bar costs in Bitcoin, they would first have to convert it to USD etc.  But exchanges like Cryptsy may be changing that sooner than later.

That doesn't matter. Unit of account means, that:
1) It is possible to set a price of something in this unit (anything which has a price in USD can also have price in BTC)
2) All units are the same. (my 1BTC can buy me exactly the same things as your 1BTC).

[User_513]

I don't agree on that point. Bitcoin is a store of value. It doesn't loose its value with time contrary to FIAT money.
You cannot get stolen if you use an offline paper wallet.
The variation on the short term doesn't matter as long as it get value on long term which is the case.

Yes, but it would loose the value IF the Bitcoin network would stop operating, right? We all know that there is an extremely small chance for this to happen, but if someone would want to make government to recognize this, shouldn't there be some formal proof? (I am just asking).

Why would people who presumably have a vested interest in continuing to operate their nodes on the Bitcoin network stop doing so? As for governments 'recognizing' Bitcoin or any other crypto currency, why should that matter? I don't need the approval of some group of sociopaths for my choices in currencies that I might wish to use in commerce with others, do you? Especially given the obvious and demonstrable manner in which these sociopaths, governments, debase and devalue the currencies which they foist upon everyone.