@Toxic
Are we going to debate definitions down to ad naseum. Of course I was refering to the fact that Bitcoin is atleast entangled to the subjective value of watts if it ever holds any subjective value at all.
Curius Dentatus: @Toxic Are we going to debate definitions down to ad naseum. Of course I was refering to the fact that Bitcoin is atleast entangled to the subjective value of watts if it ever holds any subjective value at all.
Yeah, but a competent arguer can establish the fact that the subjective value of "bitcoins" or any given thing is at least entangled to the "subjective" value of watts or any other given thing.
The point is not to establish an spurious correlation link, the point is to assess how much is it important.
And I'm fairly sure that whatever cost in kW*h that it takes to produce a bitcoin, its completely negligible compared to the actual price a bitcoin holds.
You could say, in the light of the regression theorem, that a bitcoin acquires exchange value and thus surpasses its own value in terms of energy costs, but that's a meaningless platitude.
Bitcoins are not, at their inception or at any time, claims to a quantity of energy measured in watts*hour (or power measured in watts).
They cost in watts (and other less tangible resources) to be generated, but so do many other things.
The value of the bitcoins unit of currency is determined by the willingness of people to transact using this protocol and the general availability of them, regardless of how much energy was spent running the algorithms that created them.
The regression theorem applies to gold and other commodities that incidentally become money. It explain why money didn't need to be invented by nobody and how it acquires most of its value.
But once the concept of money exists, it can be re-invented, and that's the whole thing about fiat currencies. They hold value insofar as people are expecting to be able trade them. In the case of central bank fiat money, these expectations are somewhat guaranteed by the credibility of a certain government in enforcing its currency as legal tender.
That led some austrianites to think that only this menace could explain why "worthless paper" could be used to transactions.
But the bitcoin protocol was designed to be money, and it is entirely voluntary, and somehow a bunch of people decided to start transacting with it, and apparently it "works" up until now.
That's why a few austrianites are so pissed.
But to try to distort the meaning of the regression theorem to accommodate bitcoin is absurd.
Point me where I failed at interpreting Mises's Theory of Money and Credit. Chapter and Page number.
You failed way before that, because you think wattage spent gives bitcoin value somehow. You don't get the ABC's, the baby steps. You don't know what value is and where it comes from. Money and Credit is too advanced for you.
My opinion is to be found on my blog in great detail, in the article Bitcoin takes a Beating.
My humble blog
It's easy to refute an argument if you first misrepresent it. William Keizer
Yes, value is subjective.
Progress. But you still don't know what "backed by" means. It does not mean "has some cost of production".
The fact that bitcoin needs wattage [which has value] to get made gives bitcoin, or anything else for that matter that requires wattage to be made, exactly zero value. The value of something does not come from its ingredients. That's what "value is subjective" means in the first place.
Of course bitcoin is backed by nothing. Even the biggest bitcoin fanatics grant that much.
Of course bitcoin is not a fiat currency.
Toxic's long post is mistaken at almost every line. People reading this might find it an amusng exercise to spot the flaws. They can get help from my humble article Bitcoin All in One Place, which lists most of the bitcoin fallacies Toxic makes. To start off, he makes the same error I mentioned in this very post, about wattage giving a produced product value.
There are millions of dollars worth of bitcoins transactions every day. Just exchange transactions between dollar and bitcoins by a large broker in the last month amounted to more than 100 million dollars in volume. If most of these are exchanges for bitcoin, which are then immediately exchanged for some product, it amounts to little more than something like Western Union. So you could call whatever secure system Western Union uses to wire money from one place to another a currency as well, since during the transfer, the money is being internally exchanged for some kind of digital token.
There are millions of dollars worth of bitcoins transactions every day. Just exchange transactions between dollar and bitcoins by a large broker in the last month amounted to more than 100 million dollars in volume.
@Smiling Dave
It's backed by its utility. I need to brush up on my Austrian basics.
Blargg: There are millions of dollars worth of bitcoins transactions every day. Just exchange transactions between dollar and bitcoins by a large broker in the last month amounted to more than 100 million dollars in volume. If most of these are exchanges for bitcoin, which are then immediately exchanged for some product, it amounts to little more than something like Western Union. So you could call whatever secure system Western Union uses to wire money from one place to another a currency as well, since during the transfer, the money is being internally exchanged for some kind of digital token.
Bitcoin is both a currency unit and a highly secure & decentralized transfer system. Western Union is the latter, but uses fiat currencies as it's former. That said, some of the transactions that occur on the exchanges are, indeed, simply people using Bitcoin as an online substitute for fiat currencies. Others are speculating in it's future value. These two groups are not equal at any given time, but the fact that they both exist is evidence that Bitcoin is a cryptographic form of money. The two root uses for such a money are 1) as a medium of exchange and 2) a store of value. If someone is buying bitcoins on an exchange in order to buy something else online, they are using Bitcoin as a medium of exchange; whereas if someone is buying bitcoins on an exchange in the expectation of holding them for some future need or gains, they are using Bitcoin as a store of value.
If someone is buying bitcoins on an exchange in order to buy something else online, they are using Bitcoin as a medium of exchange; whereas if someone is buying bitcoins on an exchange in the expectation of holding them for some future need or gains, they are using Bitcoin as a store of value.
That sounds so smooth. They are both wrong.
This has been one of the most interesting threads I've read in a while. With that being said, after reading most of the discussion here, nothing that I thought about Bitcoin before has changed; it's akin to playing with fire. You are going to get burned sooner or later.
Funny how we can have such different reactions to the thread. I've read most of it (and much more elsewhere), and my optimism for Bitcoin's future has only been strengthened. It certainly has a volatile short-term future due to it's relatively small market cap and low liquidity, but over the long term I see this as having incredible potential and stability.
Well, with your admission, you softened me up. I'll explain what "backed by" means.
"Backed by" applied to paper money means "that which someone has legally obligated himself to give me in exchange for the paper money."
I remember when some US dollar bills had "Silver Certificate" written on them. Meaning the US govt was promising to give you a fixed amount of silver if you presented it with that dollar. When there was a gold standard, the promise was to give you a fixed amount of gold. So that the silver certificates were backed by silver, and under a gold standard, all money is backed by gold.
When the US govt declared it will no longer give you gold for paper money, some people wondered what the money is now backed by. The answer, of course, is nothing. But such an answer was uncomfortable for politicians to say. So they started saying it is backed by "the full faith and credit of the US govt". Which is just double talk and means nothing. It's like saying the plumbing in someones house is not made of copper or plastic, but of angel's wings and mothers' prayers.
OK, let's look at bitcoin. What does anybody promise to give you in exchange for bitcoin? Gold? Silver? US dollars? Wattage? Utility? No, they promise to give you absolutely nothing. Nobody has made any promise at all. So that bitcoin is backed by nothing.
Smiling Dave:OK, let's look at bitcoin. What does anybody promise to give you in exchange for bitcoin? Gold? Silver? US dollars? Wattage? Utility? No, they promise to give you absolutely nothing. Nobody has made any promise at all. So that bitcoin is backed by nothing.
Which is why I won't go near it.
I've shown you records of currency exchange trades between dollar and bitcoins.
Those are analogous to FX trading records between dollar and other currencies.
They do not represent all the activity in the trading "bitcoin economy".
Many people keep bitcoins in their electronic wallets, either because they do expect it to appreciate faster than the dollar or because they consider it a form of hedging/cost reduction when making FX transactions in other currencies.
And in any case, as long as people are willing to make payments with "Wester Union" credit, so that not all money wired through western union is cashed out, it IS money too. Just like any checking account in a fractional reserve bank IS also money.
What's Driving the Bitcoin Revolution: Why $100 worth of Bitcoin is worth more than 100 US Dollars
Pasted below are the introductory paragraphs written by Satoshi Nakamoto explaining the intent of the Bitcoin payment system. I've bolded the phrases that refer to "trust" and "nonreversibility." In his opening paragraphs, Nakamoto refers to "trust' six times and to "reversibility" four times. As is clear, Nakamoto's intent was to design a payment system that eliminates, as far as possible, the middleman in an interpersonal exchange between two people, and that therefore prevents the possibility of the middleman reversing the transaction.
For those who may not be actively involved in running a business that depends on third-party payment processing, the problem that Nakamoto proposes to solve is an important problem not only from the point of view of commerce, but also from the point of view of libertarianism---specifically, libertarian ideas about contracts between individuals.
Third-party payment systems such as Visa/Mastercard/American Express and PayPal, act as a middleman when a customer makes a purchase from a merchant. When a dispute arises the payment processors may resolve the dispute using its own judgment, largely without respect to any contract that may have been agreed to by the customer and merchant. For example, assume the customer and merchant agree that the transaction is a "final sale" and that no returns will be allowed. The customer receives the good or service in question, but then changes his mind and insists on a refund. The merchant refuses to process a refund, so the customer appeals to Visa or PayPal asking for a refund. The payment processor (Nakamoto's "trusted third party") may in this case reverse the transaction and grant the customer a refund regardless of the contract between merchant and customer.
Essentially, the "trust-based" or "third-party-based" payment processing systems (Visa, PayPal, etc.) are not bound by contracts between trading parties. The cost of achieving a contractual, non-reversible transaction, which is important in many commercial transactions, is therefore high. The parties must either meet face-to-face and conduct a physical exchange, or they may transact electronically and then seek to enforce the original contract through the legal system when one of the parties reneges on the contract . In any event, the "trust-based" system in which the middleman is not bound to enforce the contract between trading partners constitutes a cost barrier to the execution of contracts made in conjunction with electronic or Internet transactions.
This is the important problem Nakamoto's system seems to have solved. This is important for libertarian contract theory, since the bitcoin payment system enables some types of contracts that are currently prevented by the cost of their creation or enforcement. In addition, the bitcoin payment system drastically lowers the cost of payment processing (the amount paid to Visa or PayPal) which for small merchants can be 2.5% to 3.5% of each transaction. Transaction fees for bitcoin transactions are negligible.
In the discussion about bitcoin and whether bitcoins have "intrinsic value" (a theoretical notion discredited by Menger and the Austrian School), it is important to keep in mind that the system conceived by Nakamoto is of significant value for many people who are involved in Internet commerce. Many cannot afford the current high costs of contract creation and enforcement associated with the "trust-based" third-party system, and many must currently pay thousands of dollars each year on third-party processing fees. These people therefore see the bitcoin system as a valuable payment system regardless of how individual bitcoins compare to traditional commodity or fiat currency units.
Regardless of bitcoin's status and prospects as money, from the point of view of Internet commerce and libertarian contract theory, bitcoin appears to be a significant technological advance with the potential to dramatically expand and enable free-market trade.
Bitcoin: A Peer-to-Peer Electronic Cash System - Satoshi Nakamoto - www.bitcoin.org 1. Introduction Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments. While the system works well enough for most transactions, it still suffers from the inherent weaknesses of the trust based model. Completely non-reversible transactions are not really possible, since financial institutions cannot avoid mediating disputes. The cost of mediation increases transaction costs, limiting the minimum practical transaction size and cutting off the possibility for small casual transactions, and there is a broader cost in the loss of ability to make non-reversible payments for nonreversible services. With the possibility of reversal, the need for trust spreads. Merchants must be wary of their customers, hassling them for more information than they would otherwise need. A certain percentage of fraud is accepted as unavoidable. These costs and payment uncertainties can be avoided in person by using physical currency, but no mechanism exists to make payments over a communications channel without a trusted party.
What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party. Transactions that are computationally impractical to reverse would protect sellers from fraud, and routine escrow mechanisms could easily be implemented to protect buyers. In this paper, we propose a solution to the double-spending problem using a peer-to-peer distributed timestamp server to generate computational proof of the chronological order of transactions. The system is secure as long as honest nodes collectively control more CPU power than any cooperating group of attacker nodes.
"It would be preposterous to assert apodictically that science will never succeed in developing a praxeological aprioristic doctrine of political organization..." (Mises, UF, p.98)
The USD fluctuates. The Euro fluctuates.
matt_kyle:Prices where you live change on a daily basis?
Not when you transact in the unit of account.
is that a real question? fuel and grocery prices change daily. I can remember watching the price of raspberries climb as they went out of season.
Malachi: matt_kyle:Prices where you live change on a daily basis? is that a real question? fuel and grocery prices change daily. I can remember watching the price of raspberries climb as they went out of season.
Not prices of individual products, but prices in general. Do they change on a daily basis? Jump or fall as much as 20% a day?
its the bitcoin hater two-step: you cant buy anything with bitcoins, and if you could, you wouldnt want to because markets are volatile sometimes.
What merchant would want to use this 'currency'. Neither transactional, nor a currency.
neither an argument, nor a proposition. what kind of person would consider this persuasive?
lots of people have lost money dealing in gold, dollars, and other currencies besides bitcoin. I'm not really concerned about my credibility with you because you identified yourself as a "bitcoin hater" (read it again, I didnt call you that) and you seem cognitively impaired with regard to this subject. youre expecting me to agree with you that bitcoin isnt a currency because of market volatility. well it may not be a very good currency right now because of market volatility, but as you said, bitcoin is what it is. digital cryptocurrency. you can understand what makes it a currency, or you can refuse to understand. you can understand what makes it a good or bad currency, or you can refuse to understand. its no concern to me.
Robert Wenzel from the Economic Policy Journal agrees with me.
Economic Policy Journal, March 23
http://www.economicpolicyjournal.com/2013/03/man-lists-home-for-sale-in-terms-of.html
Bitcoins can only be considered money when people are comfortable to price products in terms of bitcoins and nothing else. That is, they think in terms of bitcoins as a reference and not translate it into their native fiat currency before making transactions. Bitcoins would also have to be accepted by a broad base of the populous in a given area, since money is the most liquid commodity. Bitcoins are not there yet. Will this ever occur? It is not known. The more the government oppresses the people by limiting transactions, such as street drug transactions, the more people will seek out the relative anonymity of bitcoins. If enough transactions occur with bitcoins, people are apt to start thinking strictly in terms of bitcoins in their exchanges, without translating back to a native fiat currency---at that point, if that ever occurs, bitcoins should be considered money. At present, bitcoins should be considered a combination fluctuating price receipt for money, price inflation hedge and interesting speculation on a climb in their value as bitcoins become more popular.
EPJ Daily Alert April 14
I want to devote an important amount of this morning to bitcoins. First, a few basic points: 1, Bitcoins are not money. 2. They are a floating priced electronic receipts for money---but as a receipt it has the potential to become money in the future. 3. It is possible that in the future they could become money IF people are willing on a broad base to accept bitcoins in exchange for goods. Remember, a money is the most liquid form of commodity. Bitcoins are currently not such. Try going to your local gas station and buying gas with bitcons. At present, we are nowhere near bitcoins becoming money.
appeals to authority arent usually good arguments. but this is one of the worst. why dont you educate yourself instead of linking and quoting irrelevancies.
Something doesn't suddenly "become money" unless you mean by legal fiat.
For bitcoin, it becomes money when it is used as such, to facilitate exchange. Thus it's money for you if you use it as money, and not money for those who haven't yet. It's praxeologically money when used as such. When a large number of people begin using it so, then the masses will be comfortable calling it money, but that doesn't mean it cannot be used as money right now or is not being used so right now, it can and is.
There are a lot of things, a whole lot of things, that I've never personally used as money. The vast majority of things in fact. But bitcoin I have used as money, to buy a good in fact.
From a friend: "...did you guys know the ASIC servers are coming online in the next 2 months? The network difficulty is about to go right through the roof. There's going to be really dramatic unloading and shuffling until the network stabilizes around the new production paradigm
I should add that GPUs have additional costs which ASIC servers do not. Namely, you can hook more than 2 ASIC servers to a single computer. Most PCs max out at 3 or 4 GPUs. With a series of USB hubs, it would be possible to hook an unlimited number of ASIC servers into a single computer. As such, you save a ton of money on support (non-revenue generating) hardware. Really, who wants a dozen motherboards anyway?
...There's more costs associated with hardware than the GPU. Namely, a PC can only hold three or four of those bad boys. Believe me when I tell you, the cost of extra mother boards, memory, power supplies, ram, and monitor switches adds-up quickly. Not to mention the heat. 15 GPUs can raise a sealed 20x20 room's ambient temperature by 75 degrees in less than 5 minutes. It takes some serious engineering to expel that much heat from an enclosed space. I thought a plastic fan might work in the window...then the fan melted. A cluster of GPUs needs an actual exhaust system, and the space to hold all the equipment. When you cost average non-revenue equipment into the cost of GPU mining, the cost per MH becomes rather prohibitive... Well, it was prohibitive when BTC were trading at less than $10. However, the difficulty was under 1,000,000. With the difficulty over 7,000,000 (it's gonna break 8 million at the next difficulty check), it's impossible to make a profit with any number of GPUs. The power costs alone will eat the miners alive.
This bubble is the last chance for GPU miners to recover their sunk costs and turn a profit.
I pay $.11 per kWh. With 24 GPUs @ 750,000 difficulty I could make 2-3 BTC per day through pooled mining. The power costs were $750 per month. I could break-even while BTC stayed above $10. I never recovered all my sunk costs.
Assuming power costs are comparable everywhere, a 24 GPU system (which is a big cluster computer) @ 7,500,000 (or 10x difficulty) should be able to produce .2-.3 BTC per day. I'd say that's, at most, 14 BTC a month. The price needs to stay above $50 to break even. I guess fifty is the new zero while there's still GPU mining.
I assume all miners, prior to the current bubble, have been running at a loss for a very long time.
The major source of cost is power. The ASIC systems use 5 to 10 times less power than GPU systems. To me, that means the ASIC miners can sell their coins for less than GPU miners' coins. I would assume the ASICs will drive the price of BTC back down to $20 or so.
The ASIC boxes are quiet, cool, and consume almost no power. Not to mention the fact that you can hook dozens of them into a network of USB hubs. One computer, dozens of miners. To me, that equals very low barriers to entry. Lots of competition in a zero-sum game. Thanks anyway."
This virtual mining is some real serious business. A pity the computation isn't solving some useful problem.
Thus it's money for you if you use it as money, and not money for those who haven't yet.
Big boo boo right there. Economists of all schools disagree with this. From the first line of Wikipedia on Money:
Money is any object or record that is generally accepted as payment for goods and services and repayment of debts in a given socio-economic context or country.[1][2][3].
"Generally accepted". Write it down. Those words are there precisely to say you are wrong.
It's praxeologically money when used as such.
Wrong again.
A definition per se is not part of praxeology.
And to my fellow readers, we see an important lesson here. If you see a post with the word "praxeology" in it, count your silverware.
Our fellow Smiling Dave is saying above that "generally accepted" has a precise meaning.
Well, i don't know about that. When I say stock options are generally accepted as compensation, for instance, what is the precise meaning of "generally" here?
I'm almost sure I cannot buy bread with stock options. Perhaps the meaning of "generally accepted" comes within a certain context, say, when we're talking about how senior executives get their bonus payments.
This whole thing looks like a medieval theology debate where people are more occupied in dissecting linguistic categories than in analyzing real world phenomena.
There are no distinct categories of money-things versus non-money-things, so there's no point in trying to make a case on bitcoin falling in one or another.
To the extent that a number of people keep reserves of bitcoins so to make future transactions, it is money.
It might be not a very "widespread and accepted" money outside a very specific group, but neither is the Sri Lanka rupee.
Money is whatever behaves like money. And anything that is used as a buffer for transactions behaves, to some extent, as money.
In some prisons, cigarettes are very similar money. In school yards, kids have commodities they actively trade, like baseball cards and so on.
Even immaterial things like reputation and endorsements can manifest money-like features.
And anything that can be converted to "money" fast and at low transaction cost is almost "money".
Maybe bitcoin was used more as money at its inception and now its basically a speculative tool, that can be interesting argument, because it's based upon the fundamental understanding that the status of moneyness is gradient, and not categorical.
But some people seem to be locked in a very outdated mode of thinking.
No I'm not. Quote the line where I say that. Answer: I don't. Which makes most of your post besides the point.
Yes, to you it may look like that.
Let me explain what is really going on. Mises proved that bitcoin will never be "money". The bitcoiners have their feelings hurt by that statement. They think, correctly, that they will be less able to pump and dump their useless bitcoins if people accept that bitcoin will never be money. So they are twisting themselves into pretzels, being very creative about what the word money means.
To help you understand, suppose someone claimed that a certain brand name protein drink contains no protein. The company then says that protein means different things to different people, and that this whole thing looks like a medieval theology debate where people are more occupied in dissecting linguistic categories than in analyzing real world phenomena.
That's the situation here.
Wrong.
A shy man tells a matchmaker he does not want to be set up with an ugly girl. But when date night rolls around, he finds himself before a hunchbacked lady with half her skin rotted by leprosy.
Upon complaining to the matchmaker, she defends herself by saying that there are no distinct categories of ugly things versus non-ugly-things, so there's no point in trying to make a case on bitcoin the leprous hunchbacked girl falling in one or another.
Is she right? Nope. Why not? Because although the mid-range of pretty and ugly is vague and subjective, the extremes are not.
Bitcoin is at the extreme range of “almost nobody”. It’s not a subjective value at that range.
Of course, I’m not the first one to point this out. Mises and Rothbard did, too, about exactly this variable [how widely used as medium of exchange].
Also, besides being wrong, you are being irrelevant. The point of my post was that X being money to Mr A does not depend on Mr A using it or not.
No. "A number" is not enough. You forgot about "generally accepted".
Did you even read my post? Here's the Wikipedia on Money I quoted.
Look at the last word. Look at it again. Now look at what you wrote.
I understand that you can make up your own language. In your new language,you can let "money" mean whatever you want. But in English, in a discussion of economics, money means what the Wikipedia quoted the standard economics textbooks as saying. And these texbooks are all saying the same thing, that money has to be generally accepted to fulfill the standard definition of money.
In some prisons, cigarettes are very similar money.
Prisons are "given socio-economic context".
Also, bitcoins are used way way less, even by bitcoiners, than cigarettes in prison. As Pete told me, of the 11 billion dollars worth of bitcoins out there, 350,000 dollars worth of them are used by bitcoiners to buy stuff. Which comes to about 3 thousands of one percent.
Of course, now that bitcoin has lost two thirds of its value, the numbers may differ a bit. But the principle is the same.
In school yards, kids have commodities they actively trade, like baseball cards and so on.
Pork bellies are actively traded in huge markets, way more than baseball cards in school yards. Are you saying pork bellies are money?
Maybe, maybe not. In any case, irrelevant. The hunchbacked leprous girl may have manifested pretty-like features, but she was not pretty.
The word "almost' is vague. A gambler who bet on the dice showing seven and threw a six, losing his shirt, almost won. So what?
In any case, this is irrelevant to the question of Anenome being wrong.
That is meaningless verbiage.
Maybe it is outdated to insist on Anenome using the word money the way everyone else uses it when discussing what Mises said about money [who was using the word the way everyone uses it]. If that makes me old fashioned, so be it.
BTW, Toxic, please forgive me if I don't reply to future posts of yours. You seem to have wildly different thinking processes than mine. I doubt we can understand each other.
Hayek writing in "The Facts of the Social Sciences":
[the objects of the social sciences] can be defined only by indicating relations between three terms: a purpose, somebody who holds that purpose, and an object which that person thinks to be a suitable means for that purpose. If we wish, we could say that all these objects are defined not in terms of their "real" properties but in terms of opinions people hold about them. In short, in the social sciences the things are what people think they are. Money is money, a word is a word, a cosmetic is a cosmetic, if and because somebody thinks they are." (emphasis added)
Searle writing in Minds, Brains and Science:
...many of the terms that describe social phenomena have to enter into their constitution. And this has the further result that such terms have a peculiar kind of self-referentiality. 'Money' refers to whatever people use as and think of as money. 'Promise' refers to whatever people intend as and regard as promises. I am not saying that in order to have the institution of money people have to have that very word or some exact synonym in their vocabulary. Rather, they must have certain thoughts and attitudes about something in order that it counts as money and these thoughts and attitudes are part of the very definition of money." (emphasis added)(p.78)
Mises, Human Action:
Economics is not about things and tangible material objects; it is about men, their meanings and actions. Goods, commodities, and wealth and all the other notions of conduct are not elements of nature; they are elements of human meaning and conduct. He who wants to deal with them must not look at the external world; he must search for them in the meaning of acting men. (3rd rev. p.92)
Kirzner, The Economic Point of View:
[the praxeological] point of view makes possible the construction of chains of reasoning that are purely formal, in the sense that they refer to goods, services or factors of production only abstractly; they depend for their validity not on the specific objects which human action may be concretely concerned, but only on postulated attitudes of men toward them. (p.179)
Rothard, Man, Economy and State:
Here again, it is very important to recognize that what is significant for human action is not the physical property of a good, but the evaluation of the good by the actor. (p. 19)
Ok,
Forget about money, too complicated for a dumbass like me.
Let's make it simple: Is bitcoin a commodity?
If not, why not?
ps: the question was asked to smiling dave but he doesn't like to talk to me. So any anti-bitcoiner can participate :)
we have been telling you this for a long time. the people who use bitcoin as money are context for bitcoin as money. since these people exist, you must either acknowledge that bitcoin is money or pretend they do not exist. so far you have chosen the latter.
ToxicAssets: Let's make it simple: Is bitcoin a commodity? If not, why not?
That's a difficult question. I probably wouldn't describe it as commodity, rather maybe quasi-commodity or commoditised service. It's more helpful to ask if bitcoin is a good. According to Menger, a good must have four requirements:
Based on this, Bitcoin is a good. It satisfies the human need to reduce transaction costs of exchange, i.e. its utility is derived from the need to trade.