Topic: A Simple Reason Why Bitcoin is not Money (Read 1147 times)

Perception and agreement matter. No matter what the government says, a group's decision makes something a currency. Bitcoin represents this ancient idea in modern times. Currency is defined by user trust and value, not its physical form or official backing.

Public faith in Bitcoin is more important than official approval. Bitcoin has become a currency for many. The ability to purchase, trade, and store value like cash is unquestioned. Its actually more efficient than fiat currencies, especially for cross-border transactions and central authority independence.

Gold is a good comparison. Collective belief also drives gold's value. We value it because we believe so. Similarly, if people believe Bitcoin is a currency, it becomes one. Its decentralization may hinder its adoption, but isnt that part of its are attractive? It changes our view of money and worth. Bitcoin is about challenging and possibly redefining our concept of currency, not merely becoming a globally accepted currency.

Imagine you have two gold coins in front of you, in your possession. They are both the same size and weight, they both have the same denomination stamped on them (say $10 for the sake of argument). And they are both legal tender for $10.

Only, you know very well that one of them is pure gold and the other is gold plated tungsten.

Your government made it into law that your gold coins are both legal tender for $10.

Only, you know one has more gold than the other.

You will likely spend the gold plated one and save the pure solid good one.

This is known as Gretchen's law: bad monry chases out good money.

People will always save the money they consider valuable and spend the money they consider less valuable.

But based on your logic, gold plated tungsten is better money than gold because people don't use the good coin to buy stuff.

If I have a dollar and a Bitcoin in my pocket, I will spend the dollar and save the bitcojn. BecausecI know the dollar is worth less, it loses value the longer I hold it. But the bitcoin gains value the longer I hold it. I spend the bad currency, and I save the good currency.

But this Gretchen's law only works so long as you can find an idiot to take your gold plated tungsten and your paper dollar. Eventually, you will run out of suckers to pass the bad money to. And that is when we will all have to spend our BTC.

And at the rate inflation is going, suckers will get very difficult to find in 20 years from now.

Is simply because the market price of bitcoin is highly volatile and subjected to large price swings. as a result,the market price at any given time may vary wildly from what could be considered a fair value.

When bitcoin was created, it was already a currency , a p2p currency that was not controlled by the government .And to be a currency,  it just needs to be able to do anything that fiat can do , and bitcoin can do everything that fiat can do. The only difference between fiat currency and bitcoin is decentralization and centralization as well as government legitimacy. So , it would be incorrect to say that bitcoin is not a currency.

It will be a bit inconvenient if the government does not accept bitcoin as a currency , and we will use bitcoin secretly, but that does not mean it is not a currency. Just like many years ago, the government even banned us from investing in bitcoin , but are you quietly investing in it and considering it as an investment?

Bitcoin is already theoretically a currency that does not require government approval. But to be able to become a legal currency recognized by the government, I don't think it will happen easily. Because most countries have their own national currencies, they have no reason to accept a currency they cannot control.

El Salvador has accepted bitcoin as currency but they still use USD as their main currency for payments, Bitcoin is just an alternative. Furthermore, they are also focusing on investing in bitcoin rather than promoting it as a currency.

When Bitcoin is functioned as a money in a country, it is not as simple as you think, buddy. Legality is a must, even if both buyer and seller agree, it is still illegal if the government doesn't allow the Bitcoin for a payment tool. It happens in my country, Bitcoin is illegal for a payment tool. You can use Bitcoin for an investment purpose only (digital asset). If you use it to pay for goods or services, you will be jailed or get fines. Our laws only allow our national currency (Rupiah) for the payment tool. So, in this matter, we have no chance to function Bitcoin as the money in my country.

If Bitcoin is functioned as an investment, it is a common thing. In many countries, Bitcoin is already accepted if it is used for a digital asset (investment). The only thing that is still difficult to implement is to function Bitcoin as a legal currency. I've no idea about how to speed up the adoption of Bitcoin as a currency. But I think it will be easier if the pioneer country like El Salvador can succeed by making Bitcoin as a legal tender. Then, it probably triggers other countries to follow it.

Op I really don't understand why you create this thread with no good reasonable points to take home. Bitcoin was not meant to be a physical cash but it is for digital currency which can be used to make payment online. And there are many testimonies that people have used bitcoin to buy things online and the goods were delivered to them, so if bitcoin can be used to purchase something online then it is automatically it becomes money and it is from the cashless family of transaction which is basically using p2p.

I don't see your points as any good reason of saying bitcoin is not money.

Bitcoin can be used to exchange goods, can be used for payment even if it is not legalized by the government, as long as there is an agreement between buyer and seller , bitcoin is called money. I don't understand why the OP and some others are saying that bitcoin is not money when it can do anything that fiat can do.

Not only that, it can also serve as an investment, a hedge against inflation and even turn us into our own bank without having to rely on anyone . Bitcoin is not just money, Bitcoin is also a versatile asset.

There have been similar arguments since 2009, 2010 etc.  In July 2010 there were similar arguments on slashdot when bitcoin was mentioned there.  More than 13 years later, they still don't hold water.  People see the problems with fiat not backed by anything of value:  the value of fiat is at the whim of a majority of the political class who want money and power. 

A free people have the power to withdraw themselves from the caprice of the politicians and protect the products of their lives using PMs, bitcoin etc.  A lot of smart people are doing so and have done so. 

>"Today, the dominant type of money is the one created by banks, i.e. fiat money."

Governments, not banks.

Money is a tool of exchange, the material form of the principle that people who wish to deal with each other must do so voluntarily, giving value for value.  Money is a tool.  Fiat, enforced at the point of a gun can't make it valuable in the long term. 

I also consider bitcoin as money, the difference is that fiat money is only for traditional transactions which are without collateral and we are forced to use it. In contrast to bitcoin, apart from many things, bitcoin is also future money that cannot be faked and is honest money.

because I believe we are still the first generation, now is the right moment to enter because in the future we will just reap the results. Especially now in the age of technology, all information is quickly conveyed to many people, so I don't think there's a need to wait a long time to get the results.

Yes, if people are using it as money, then it's money, regardless of the unit of account.

Incidentally, does this mean you'll finally cease your ongoing tirades about millisats?    

By what you've just said, it sounds as though you've had a breakthrough and can correctly rationalise this concept now.  I hope you continue to make progress in both your understanding and your acceptance of reality.

Money is any acceptable means for a legal tender that is, when we use anything in exchange for something, it's valued as money, so should we now accept that bitcoin is not money or rather being the latest version of money because it's in a digital form, we can spend it, keep it, save it, exchange it and earn it as the way money is being made, everyone have access to money likewise bitcoin, so what we decided to use bitcoin for is what it's meaning may ve interpretated in our hearing.

Yeah, I agree with what you're saying here.  I was just reading something the other day about how there's still some native tribes using seashells as money.  Which is pretty crazy when you think about it, since that's what some old civilizations did thousands of years ago.  But the thing is, while those seashells have value to those specific tribes, if you tried using them as money with most other people theyd look at you like you're nuts. And  even if the shells are super valuable to that tribes, no one else is gonna take them as money.  Whereas with US dollars or euros, basically everyone accepts those as legit money, since we all know it's got value that can be exchanged and used all over.  

So it's kinda like how if you took some random dude from a cut-off tribe whos never seen the internet or whatever and tried to pay them in bitcoin, they'd have no clue what you're talking about or why they should accept some digital coin as money.  But for most of the modern world, we recognize bitcoin as having real value, even if it's not physical.  So I agree just because some isolated individuals or groups don't see the value doesn't mean bitcoin isn't considered legitimate money by the rest of the world.

money is the term used by those using the currency for commerce (income/spending).
currency is the broad term of some unit of measure holding value and used in exchange...
WHO and how its used defines is money.

money is not just fiat. money is the collective acceptance of any community needs to perform commerce(income/spending) of their prefered money unit

those not using gold do not see it as money.. but those that do use/spend gold to purchase things in exchange see it as their money.
those using gold as just a store of value(hoarding) see it as a asset investment

europeans see the EURO as money when spending/receiving income.. americans dont accept EURO as money in america but see euro as a currency
europeans see the EURO as savings/investments when hoarding..

Simply put, money is just a unit of measurement, a measure of value and used for exchange, so anything that performs those roles can be called money. Gold or bitcoin can both function as money, not just government fiat money can be called money. This reminds me that in Chinese history, they also used gold and silver as a means of exchange and payment, and they were also called money. So therefore, bitcoin is money. OP and some people consider bitcoin not to be money, they should review the definition of what money is.

That's not correct! So, if I offer you a certain amount of bitcoins in exchange for a product or service that you offer, you wouldn't accept it? Doesn't Stake casino pay you in bitcoin to promote them here? So how can you say that bitcoin does not serve as money for you?

I don't have to exchange it for fiat to recognize its actual value. I can use it to pay for products/services, just like fiat currency. In most cases, it's even more practical.

no matter how people look at it, we can say that bitcoin has corresponding fiat value in the market. so even if some people are not considering this currency as money already, it doesn't matter anyway. we can already equate to certain value as it is actively trading in the market.
of course, if your btc remains to be btc, it is still not money. but once you convert it to fiat, that's when you will appreciate its actual fiat value.

Actually, when talking about scepticism towards bitcoin it not only happened from the beginning they were created but even today it is like that because it is indeed a sense of scepticism towards bitcoin especially for beginners who are new to bitcoin then scepticism must remain.
So in this case it is important to learn as a whole when we are still not sure so that it will create a new understanding of bitcoin and as a choice whether bitcoin is really worth it or not to be used as investment material.
I think it is important that in the end we must realise that bitcoin is still bitcoin which indeed even though it has now begun to be looked at by many people but if we talk about the current human population, bitcoin adoption and developments that occur are only a small part of the overall population so it is quite natural that the problem of scepticism will continue to exist. But that's not a problem for me personally because at the end of the day it's their right to be sceptical about bitcoin and it's not going to be a problem for me because I'm just going to continue to do what I want to achieve in bitcoin according to my beliefs.

I consider Bitcoin as loads of things including money, the difference is just that it doesn't function the traditional way.

The single fact that it leverages on a blockchain technology driven by codes makes it become, first, a code, before it becomes a network and then a coin having a dollar value backing it then it becomes a store of value and loads more, depending on who is addressing it as what.