On Bitcoin as money

[deisik]

Many authors often claim that the concept of money is not something which an average Joe can easily understand, that it is too complex to explain in a few words, or anything to that tune. I'm strongly inclined to think that the message here is that people should not ask questions as to the veracity, validity and value of arguments allegedly proving that Bitcoin is not money and cannot become money, ever

The truth is that money, conceptually, is a very simple construct, which can be explained in a couple words. Basically, it is a nondimensional system of measuring value of things with some arbitrary point of reference. Nondimensional here means that it doesn't have any particular unit of measurement attached (like kilo, meter, or anything from physical world). In short, it is the forms of money where things get truly complicated

And there is nothing which could conceptually prevent Bitcoin from being a "Turing-complete" form of money

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[stoat]

Money is like maths. It exists. But it has no substance. Money is...information. Who has what, who has how much of everything? Let me give you some money, here, take it. Feels real doesn’t it. It’s just paper, but what have I “given” you? Well, I don’t have it anymore I gave it to you. Enjoy it.

[squatter]

The truth is that money, conceptually, is a very simple construct, which can be explained in a couple words. Basically, it is a nondimensional system of measuring value of things with some arbitrary point of reference. Nondimensional here means that it doesn't have any particular unit of measurement attached (like kilo, meter, or anything from physical world). In short, it is the forms of money where things get truly complicated

I've seen people say that intrinsic value is a requirement for money, but I think they're wrong. It seems that the only true requirement for money is that it's scarce. Without a sense of scarcity, all value becomes arbitrary. Past that, all that's really required is a general consensus among people to use something as money.

Satoshi made a great post about this many years ago.

And there is nothing which could conceptually prevent Bitcoin from being a "Turing-complete" form of money

I don't understand what this means. Turing completeness is just a statement about whether a system can perform any possible calculation or computer program. What does this have to do with money?

[bettercrypto]

Conceptually, bitcoin can be used as money has been using today. Money is used in financial transactions such as payment. Also used as saving that can be stored in banks. With these, bitcoin can also be used that way. But the only think hindereing bitcoin to act that way are decentralization, stability, and anonymity. These factors somehow preventing bitcoin from being recognize by governments. Maybe in the future, bitcoin will be developed in such a way government can have security with it.

[deisik]

The truth is that money, conceptually, is a very simple construct, which can be explained in a couple words. Basically, it is a nondimensional system of measuring value of things with some arbitrary point of reference. Nondimensional here means that it doesn't have any particular unit of measurement attached (like kilo, meter, or anything from physical world). In short, it is the forms of money where things get truly complicated

I've seen people say that intrinsic value is a requirement for money, but I think they're wrong. It seems that the only true requirement for money is that it's scarce. Without a sense of scarcity, all value becomes arbitrary. Past that, all that's really required is a general consensus among people to use something as money

Transactional utility is intrinsic value of money

At least, as long as we accept there is intrinsic value in things in the first place as all value is subjective, and marginally subjective at that. Further, scarcity refers to the form of money, i.e. cattle, sea shells, rai stones, gold, dollar, Bitcoin, etc. There is no such thing or idea at the very basic level, i.e. money as a nondimensional (dimensionless) unit of account (or such a system). Other than that, I agree that for money to be money it should be scarce while its supply limited

And there is nothing which could conceptually prevent Bitcoin from being a "Turing-complete" form of money

I don't understand what this means. Turing completeness is just a statement about whether a system can perform any possible calculation or computer program. What does this have to do with money?

I specifically double-quoted the term to show that it shouldn't be taken too literally. Obviously, I referred to the fact that Bitcoin can be as good as any other money out there (and probably even better)

[Lumi3004]

Currently Bitcoin cannot be said as legitimate money to transact in terms of needs, primary and secondary, one sale value for goods or Bitcoin, so it is rather difficult if bitcoin is made into a legitimate money for buying and selling,
which is currently happening Bitcoin is exchanged with goods and makes this money what is happening now.

[deisik]

Conceptually, bitcoin can be used as money has been using today. Money is used in financial transactions such as payment. Also used as saving that can be stored in banks. With these, bitcoin can also be used that way. But the only think hindereing bitcoin to act that way are decentralization, stability, and anonymity. These factors somehow preventing bitcoin from being recognize by governments. Maybe in the future, bitcoin will be developed in such a way government can have security with it

So money, according to you, is something recognized as such by the government, right?

The same authors which I mentioned in the OP also repeatedly make use of the term "money surrogate" when they refer to Bitcoin and other cryptocurrencies. But that is utterly misleading as it makes you think that there are genuine monies (like those declared money by a government) and not quite monies (like in not quite there), that is, money surrogates which only look like money

Ultimately, money is what money does. So if Bitcoin is used as money, i.e. as a means of payment (or medium of exchange, which is the same thing), it is money, and there cannot be any reservations as to its role if only for legal reasons. In this way, Zimbabwean dollars are not money because they lost this capacity even if they are money in a legal sense and have been declared so

[Naida_BR]

Many authors often claim that the concept of money is not something which an average Joe can easily understand, that it is too complex to explain in a few words, or anything to that tune. I'm strongly inclined to think that the message here is that people should not ask questions as to the veracity, validity and value of arguments allegedly proving that Bitcoin is not money and cannot become money, ever

The truth is that money, conceptually, is a very simple construct, which can be explained in a couple words. Basically, it is a nondimensional system of measuring value of things with some arbitrary point of reference. Nondimensional here means that it doesn't have any particular unit of measurement attached (like kilo, meter, or anything from physical world). In short, it is the forms of money where things get truly complicated

And there is nothing which could conceptually prevent Bitcoin from being a "Turing-complete" form of money

Money is something that the society has agreed that can be exchanged in order to get an item. If it is widely accepted as a way of payment then this makes it "money". I think this is the main reason why people say that bitcoin is not money. They support that it is a digital asset because you can store value in it and keep it as an investment.

[deisik]

Many authors often claim that the concept of money is not something which an average Joe can easily understand, that it is too complex to explain in a few words, or anything to that tune. I'm strongly inclined to think that the message here is that people should not ask questions as to the veracity, validity and value of arguments allegedly proving that Bitcoin is not money and cannot become money, ever

The truth is that money, conceptually, is a very simple construct, which can be explained in a couple words. Basically, it is a nondimensional system of measuring value of things with some arbitrary point of reference. Nondimensional here means that it doesn't have any particular unit of measurement attached (like kilo, meter, or anything from physical world). In short, it is the forms of money where things get truly complicated

And there is nothing which could conceptually prevent Bitcoin from being a "Turing-complete" form of money

Money is something that the society has agreed that can be exchanged in order to get an item. If it is widely accepted as a way of payment then this makes it "money". I think this is the main reason why people say that bitcoin is not money. They support that it is a digital asset because you can store value in it and keep it as an investment

Which society do you refer to here?

It kinda goes without saying that the American dollar is universally recognized as money, but there are over 200 countries in the world as of now. The vast majority of them have their own local currencies which are not broadly accepted anywhere but in these countries and to some degree in their neighbor states. So how is Bitcoin particularly different in this regard? Or do you really think that Aruban florin or Burundi franc are better money than Bitcoin?

Further, money is an asset by definition, otherwise it couldn't function as money. If it loses this capacity, it stops being money. Given that today's monies are mostly digital, it is a digital asset too. Unsurprisingly, in order to have any capacity as a means of exchange or payment, it should also possess a capacity as a store of value, i.e. to preserve value in the long term, even though these functions don't live quite well together (but this is a different story)

[GregH37]

The truth is that money, conceptually, is a very simple construct, which can be explained in a couple words. Basically, it is a nondimensional system of measuring value of things with some arbitrary point of reference. Nondimensional here means that it doesn't have any particular unit of measurement attached (like kilo, meter, or anything from physical world). In short, it is the forms of money where things get truly complicated

Money is something you give in exchange for a product or a service simply, nothing else required to be known. You use money to buy an apple, usually it is backed by governments but in the concept of bitcoin it is backed by nothing but people giving it value. Bitcoin IS money in the sense that dollar and euro is money. You can buy an apple with bitcoin, you can buy a can of soda with bitcoin, you can buy a whole vacation with bitcoin, you can buy a computer with bitcoin.

There are not many things in the world that can buy you these things like in barter system, you can't give chickens to a cashier and expect them to take it but you can use bitcoin for all of these. Which comes to show all of us that bitcoin IS money and will always be in the future as well.

[squatter]

I've seen people say that intrinsic value is a requirement for money, but I think they're wrong. It seems that the only true requirement for money is that it's scarce. Without a sense of scarcity, all value becomes arbitrary. Past that, all that's really required is a general consensus among people to use something as money

Transactional utility is intrinsic value of money

At least, as long as we accept there is intrinsic value in things in the first place as all value is subjective, and marginally subjective at that.

It's not intrinsic, though. If nobody used Bitcoin, it would have no utility with regard to transactions. It would have no utility at all. So, it obviously has no intrinsic value, as Satoshi correctly pointed out. I just think this has no bearing on whether it can be "money."

[Ranly123]

Many authors often claim that the concept of money is not something which an average Joe can easily understand, that it is too complex to explain in a few words, or anything to that tune. I'm strongly inclined to think that the message here is that people should not ask questions as to the veracity, validity and value of arguments allegedly proving that Bitcoin is not money and cannot become money, ever

The truth is that money, conceptually, is a very simple construct, which can be explained in a couple words. Basically, it is a nondimensional system of measuring value of things with some arbitrary point of reference. Nondimensional here means that it doesn't have any particular unit of measurement attached (like kilo, meter, or anything from physical world). In short, it is the forms of money where things get truly complicated

And there is nothing which could conceptually prevent Bitcoin from being a "Turing-complete" form of money

I believe that Bitcoin is derived from the concept of money but with the volatility it has, it could not be used globally as the main currency for transactions.

[biskitop]

bitcoin is indeed not money and will never be money. but as an alternative to making transactions, such as paypal. where we use bitcoin as an alternative payment tool because bitcoin has a selling point.

[deisik]

I've seen people say that intrinsic value is a requirement for money, but I think they're wrong. It seems that the only true requirement for money is that it's scarce. Without a sense of scarcity, all value becomes arbitrary. Past that, all that's really required is a general consensus among people to use something as money

Transactional utility is intrinsic value of money

At least, as long as we accept there is intrinsic value in things in the first place as all value is subjective, and marginally subjective at that.

It's not intrinsic, though. If nobody used Bitcoin, it would have no utility with regard to transactions. It would have no utility at all. So, it obviously has no intrinsic value, as Satoshi correctly pointed out. I just think this has no bearing on whether it can be "money."

Note that I didn't say that it is intrinsic value of Bitcoin

I said that it is intrinsic value of money. See the difference? If nobody uses Bitcoin, then I agree, it won't have transactional utility. But it will also mean that it stops being money, right? Transactional utility is what makes money money. You can look at it from a different angle, actually, from the other end even. If something has transactional utility, it is money as this is what essentially defines money

For example, gold is a good store of value, but it makes a bad money because it is not very convenient to transact with it as its transactional utility is not great. In fact, it is quite poor in comparison with other forms of modern money like fiat or Bitcoin itself

[sclmte]

bitcoin is a virtual currency but it suggests that bitcoin is the beginning to convert as a currency, that's usually what traders do, knowing that bitcoin is a digital and virtual currencies that provide good profits and proper benefits to everyone is one of the best cryptocurrency nationwide.

[ShadowBits]

Many authors often claim that the concept of money is not something which an average Joe can easily understand, that it is too complex to explain in a few words, or anything to that tune. I'm strongly inclined to think that the message here is that people should not ask questions as to the veracity, validity and value of arguments allegedly proving that Bitcoin is not money and cannot become money, ever

The truth is that money, conceptually, is a very simple construct, which can be explained in a couple words. Basically, it is a nondimensional system of measuring value of things with some arbitrary point of reference. Nondimensional here means that it doesn't have any particular unit of measurement attached (like kilo, meter, or anything from physical world). In short, it is the forms of money where things get truly complicated

And there is nothing which could conceptually prevent Bitcoin from being a "Turing-complete" form of money

The truth is for now that Bitcoin isn't eligible to be used as a currency. We need to consider it that things should be taken action first before they can finally use it as a money. But I guess we still need Bitcoin to gain such money.

[deisik]

Many authors often claim that the concept of money is not something which an average Joe can easily understand, that it is too complex to explain in a few words, or anything to that tune. I'm strongly inclined to think that the message here is that people should not ask questions as to the veracity, validity and value of arguments allegedly proving that Bitcoin is not money and cannot become money, ever

The truth is that money, conceptually, is a very simple construct, which can be explained in a couple words. Basically, it is a nondimensional system of measuring value of things with some arbitrary point of reference. Nondimensional here means that it doesn't have any particular unit of measurement attached (like kilo, meter, or anything from physical world). In short, it is the forms of money where things get truly complicated

And there is nothing which could conceptually prevent Bitcoin from being a "Turing-complete" form of money

The truth is for now that Bitcoin isn't eligible to be used as a currency. We need to consider it that things should be taken action first before they can finally use it as a money. But I guess we still need Bitcoin to gain such money.

What do you mean by Bitcoin not being eligible to be used as a currency?

If you want to say that it is not legally considered a currency anywhere in the world, this is simply not true as, for example, in Japan its legal status is that of a currency (like the US dollar) and the Financial Services Agency of Japan has officially allowed people to pay for goods and services with Bitcoin. Japan is one of the leading world economies so you can't possibly say that Bitcoin is not legally a currency anywhere. Technically, that would be a lie

[magneto]

A lot of people tend to argue either that since bitcoin doesn't have a central issuing authority that backs its value, it can't be used as "money". Others say that bitcoin has no intrinsic value. Both of these arguments are wrong, in my opinion.

Just because a central entity issues a currency doesn't mean that it's valuable. Fiat isn't intrinsically valuable despite what people tell you about how it is backed by the government. There is no promise to pay anything, or redeem the currency that they issue for any tangible goods.

Bitcoin is divisible, can act as a medium of payment, more fungible than fiat, and is a store of value due to the fact that its supply is decentralised. Its intrinsic value comes from its ability to be used on the bitcoin network to send and receive transactions.

To me, it's a far better form of money than fiat, and even gold/silver due to its enhanced portability and convenience. Just as you said, as long as there are adopters willing to use it (which there are plenty), bitcoin can be used as money.

[deisik]

A lot of people tend to argue either that since bitcoin doesn't have a central issuing authority that backs its value, it can't be used as "money". Others say that bitcoin has no intrinsic value. Both of these arguments are wrong, in my opinion.

Just because a central entity issues a currency doesn't mean that it's valuable. Fiat isn't intrinsically valuable despite what people tell you about how it is backed by the government. There is no promise to pay anything, or redeem the currency that they issue for any tangible goods.

Bitcoin is divisible, can act as a medium of payment, more fungible than fiat, and is a store of value due to the fact that its supply is decentralised. Its intrinsic value comes from its ability to be used on the bitcoin network to send and receive transactions.

To me, it's a far better form of money than fiat, and even gold/silver due to its enhanced portability and convenience. Just as you said, as long as there are adopters willing to use it (which there are plenty), bitcoin can be used as money

I don't particularly disagree with this post

All I want to add is that Bitcoin and fiat money are on the same page actually. The opposite page belongs to gold, silver, and other forms of money based on commodities either directly represented by respective commodity (known as commodity money) or indirectly via an IOU (e.g. the US dollar prior to the Nixon shock). In this way, the value of both Bitcoin and fiat money in terms of purchasing power (i.e. how much a unit of money can buy) is determined in a pretty arbitrary way, depending on the size of the economy and total or circulating monetary supply. From this perspective, Bitcoin and fiat are not that different

[beerlover]

Probably bitcoin is here to break everything including how a money should be . Moreover, bitcoin may not be a thing for an average Joe. He needs basically something before get start within. Unlike fiats, bitcoin exist online hence he may need to have a data connection at least to start with bitcoins (assuming here no one could remain as a bitcoiner by holding only few physical bitcoins).

Bitcoin must be a money for some layer of society and its complexity will be eliminated over the time by new innovation or every human will become knowledgeable so that will be ready to adopt bitcoins on the go.

[squatter]

I've seen people say that intrinsic value is a requirement for money, but I think they're wrong. It seems that the only true requirement for money is that it's scarce. Without a sense of scarcity, all value becomes arbitrary. Past that, all that's really required is a general consensus among people to use something as money

Transactional utility is intrinsic value of money

At least, as long as we accept there is intrinsic value in things in the first place as all value is subjective, and marginally subjective at that.

It's not intrinsic, though. If nobody used Bitcoin, it would have no utility with regard to transactions. It would have no utility at all. So, it obviously has no intrinsic value, as Satoshi correctly pointed out. I just think this has no bearing on whether it can be "money."

Note that I didn't say that it is intrinsic value of Bitcoin

I said that it is intrinsic value of money. See the difference? If nobody uses Bitcoin, then I agree, it won't have transactional utility. But it will also mean that it stops being money, right?

That's the point. Money doesn't indicate any intrinsic value at all, whether we're talking about Bitcoin or dollar bills or cowry shells. Something is money only by virtue of the fact that people collectively imbue it with market value.

Transactional utility is what makes money money. You can look at it from a different angle, actually, from the other end even. If something has transactional utility, it is money as this is what essentially defines money

Sure. It's just not intrinsic. Intrinsic value regards nature -- innate characteristics, i.e. the elemental uses of gold in industry or the consumptive value of cocoa beans.

Money, as a medium of exchange, requires people to imbue it with value, by definition. That can't be intrinsic because it doesn't exist in nature.

For example, gold is a good store of value, but it makes a bad money because it is not very convenient to transact with it as its transactional utility is not great. In fact, it is quite poor in comparison with other forms of modern money like fiat or Bitcoin itself

Why is gold a good store of value? Isn't this directly tied to its value as money?

As far as being a medium of exchange, convertible gold-based notes worked just as well as fiat money. Gold-based money has a much longer history than fiat, actually.

What makes Bitcoin superior is that it's easy to transact with without using trusted intermediaries like banks.

[shamc]

If scaled better then it can be used because it is now well known globally and used in countries with shite economies. Hence it is becoming widely used across south america and will probably soon take over africa

[deisik]

Sure. It's just not intrinsic. Intrinsic value regards nature -- innate characteristics, i.e. the elemental uses of gold in industry or the consumptive value of cocoa beans

You don't get it, really

Transactional utility cannot be separated from money and for a very simple reason. Money, conceptually, is impossible without transactional utility as this is what makes it money in the first place. Without it, it is not money. How it is made and by whom exactly, i.e. by government, people, or otherwise, is a totally different question

And your claim that it can't be intrinsic because it doesn't exist in nature is as irrelevant since from this very point of view money itself doesn't exist either. It can be said that it is a virtual construct (remember, money is what money does). Honestly, you are repeating things which are inconsequential to the concept of money