Topic: Bitcoin=Money(?) (Read 1821 times)

This post is correct. People know about Bitcoin, but it is currently no mainstream. Because of this fact, you have to compare it to gold or silver, since those can buy some* things, but not necessarily a lot of things. Bitcoin is the same way. It's not commonly used, but it can be used to be purchased different commodities or goods, or nearly anything there's a market for.

It would be like a primitive society, however, if you decided that Bitcoin would be permanently compared to precious metals, as it would be reminiscent of the times when precious metal coins were used as currency.

*I have no idea where you can buy stuff with gold or silver, but I'm sure it exists somewhere.

I would make a reference to Bitcoin's value as equivalent to a precious metal like gold or silver as an analogy due to the fact not many people know what Bitcoin is.

Bitcoin is not yet a stable store of value. Granted it has increased dramatically over the past several years, but it's price has also fallen dramatically over short periods.

In order for Bitcoin to be considered a form of money it's price volatility needs to decrease significantly. It has decreased this year, but the volatility is still much too high. 

Exactly.

I would say it is.
Make a poll and see the results

Bitcoin=money game,you play well,you got the money

Money is a medium of exchange.

More and more business are starting to accept bitcoin for payment.

You can use this to frame your argument bitcoin is money.

Rocks have been used as a form of currency back in history so that statement is true, the value of money is only that people are willing to exchange it as a means of trading aka it is a store of value. Differing from barter in that instead of trading goods and services apples and pears or trading physical commodities you are trading something that only has a representative value aka my dollar is the same as yours also known as fungibility which Bitcoin has so yes it is money and a form of exchange.

Technically, as long as people accept it in exchange for something, it's money. If people accepted rocks in exchange for goods, I would consider rocks money then

note that currency and money are not the same.

Currency = $, € etc

Money = Gold, Silver

Where bitcoin fits is up to you to decide.

In my opinion it's money, but not everyone may agree.

Are u sure ,I do not think so

Does that mean localbitcoin traders need to register as a money services business?

in 10 years the bitcoin will change the dollar...

Meaning, you are confused, too.

Most of the people are confused whether Bitcoin can be considered as a form of investment, or whether it should be purely considered as a currency. In my opinion, it is a combination of both. 

I don't think with current common knowledge you can easily describe bitcoin in one sentence.

Also it is nice that some people put more work into this area

Bitcoin is money:
....did I miss something?
You missed the part where we don't let the Gov't create our reality for us.     

Sometimes I wish that was true remembers a few papers where line by line it is underlined with suggestions to improve grammar
ETC proving that they read it lol

Bitcoin is redefining money. You can lead the intellectual revolution... ...just make something up that sounds good, if the media picks up on it you will be virtually immortal:
The juice101 Theory of Modern Digital Money.  

Even for 2 it is limited because its not legal tender.  Its more like a barter than money

you may think is money but just like of the ops stated, they are not treating it like that, now bitcoin is considered as a product or did I miss something?

as long as people can exchange it with something else, I think BTC=money.

Here is a good read, that might help a bit: Is Bitcoin real money? [Article for newbies].

Welcome to the forum and good luck on you bachelor's thesis.

How is it not an actual form of money?

Bitcoin can be accepted as payment for goods and services, and repayment of debts in many countries and socio-economic context. Bitcoin is money.

I would say Bitcoin isn't an actual form on money, more like virtual property that is traded in place of money.

According to the Austrian School, money is "the most sought after good". Whatever the good is, in this case Bitcoin, it is "most sought after" because every actor in the market knows that this good, can be passed off to the next guy if needed for exchange of goods, and the next guy will accept it at the same value.   In order for this exchange to occur, it helps for the most sought after good to possess certain characteristics.
It will be fungible, divisible, scare, portable, and have a high value to weight ratio. We don't use chicken eggs, panes of glass, gasoline, and sand as money, hopefully for obvious reasons when we consider the 5 characteristics of good monies.

Legal tender laws often force us to accept a certain item as money even though in a free market we would choose another good as money. The Federal Reserve bank note being an example, it can be created at will which means it is not scarce. Something that can be counterfeited makes for a horrible currency, whatever other "benefits" it may bring.

Bitcoin has the characteristics of good money. Arguably it is better than gold as money because of its portability, divisibility, and ease of transfer. However bitcoin does not have widespread recognition or adoption. It is used as money, but it's use is widespread.
This does not reduce bitcoins money-ness any more than the fact that Pesos are still money even though they aren't used by 99% of the world.

Paul Krugman and his ilk will suggest that using inflatable toilet paper notes as money is a good thing. That money can only be money if it is backed by government and forced onto individuals.

This is wrong. Money will arise any time exchange takes place between humans.
Left to its own operations, meaning without the guns of government interfering, the free market will eventually agree on a form of money.
Money allows humans to escape from barter trade because of the phenomenon called the "coincidence of wants". Money is necessary to the division of labor, therefore money is also necessary for the advancement of economies beyond barter.

If what I wrote doesn't make sense then I suggest you check out the book store and library at mises.org
They have many free e-books.
So does FEE.org
http://www.fee.org/library/

I agree with philipma1957, at this moment in time Bitcoin would best be described as a hybrid between "money" (there are tons of goods and services bought and sold in BTC out there, just like any Fiat) but it can be and is used as a vehicle to store value (much like gold, silver, etc) Since it contains both of these attributes I believe it deserves a classification all its own, but thats just my opinion. As far as your paper goes it is all subjective if YOU want it to be "money" then there is plenty to make a compelling argument for it but if not then there is just as much to support that it is less of a "money" and more of an "investment tool" but it all falls back to the simple question of do YOU think it's a "money" OP?

I think it is money. It has real value, big stores are accepting it and you can exchange it (just like "real" currencies).

juice, you may want to see the MIT Bitcoin Expo 2014. video link + summary is on bitprize.org. Maybe its helpful for your thesis;

yes, bitcoin=money, anonym money, great money, nice money

Thesis defense tips
Then they may ask several things during your thesis defense such as:

• The original author of bitcoin says it is an electronic cash system, so was your research really necessary?
• You claimed it is not money, but at the same time  I have read papers who claim it is money (or opposite). Are these people wrong?
• Is Bitcoin not a Ponzi scheme?
• Why did you not talk about any other currencies, such as Litecoin?

Paper tips
As a general tip, there are a few pages very important in your paper. These include the conclusion page, the introduction and research question - because the professors will not likely read your entire paper line by line. Usually, professors are under a tough schedule to publish, prepare classes, get funding etc.



After all, they probably have 5000 student papers to read. You want your sources cited everywhere. Try to avoid introducing topics by terms, but start with the story that explains the term, this is more easy to read. Example:

(good example)

(bad example)

The first reads easier, but thats just my opinion  You want your references to be in order, perhaps from newest to oldest. You want some recent publications in your list, perhaps from 2013 or 2012. Otherwise they could say your data is old. Given that Bitcoin is not so old, it may not be a problem; But keep in mind there has been research into crypto-currency before bitcoin, but there was still a problem to be solved. Finally you may want to use TeXmaker, its a headache to use it, but it generate a very professional looking paper. http://www.xm1math.net/texmaker/

Another tip is to put a sound recorder on, read out look your introduction page. Then play it back. How does it sound? Its exciting or boring? You want this page is interesting, because it is one of the few pages the professor will actually read in detail. This also helps against language mistakes that you normally would over-read.

Hope this was useful. 

...

Money typically has three major and well-accepted attributes (and examples):

1)  Unit of Account (how much a business is worth, and "keeping score")

2)  Medium of Exchange (that loaf of bread costs you $3.00, the movie ticket $10.00)

3)  Store of Value (gold is store of value, and will that dollar still be worth a (real) dollar -- or close -- in 5 years?)

Bitcoin at this point works only well for number 2.  The price volatility excludes numbers 1 and 3.  There is a real case to be made to buy Bitcoin as an investment/speculation (as I have), but I would classify Bitcoin as a special case of a commodity.

So, I would not call it money.

***

You could even make an argument that our US $ is not "money", perhaps better thought of as a "currency" as the US dollar is not a good store of value over the longer term (inflation).  That is another topic...

...

There is no intrinsic value - therefore it has to be money.

It has been a while since college.  I have to say it is not money. It is a hybrid item. A combination of a piece of gold and a stock.

The USA IRS rulings are treating it as such.


As for behaving like money it values can be very volatile.
Much more subject to huge price swings that have never been seen in a stable currency.
That is more of a commodity behavior. Gold or silver have seen price swings.

 The Hunt brothers  drove silver from 3 to 50 USD around 1980.  It dropped back under 8 USD stayed low had a big jump a few years ago close to 50 and is now down to 20 something USD. I would say BTC follows a pattern more like that.


charts BTC price punch in 1 week for the longest chart.

https://bitcoinwisdom.com/

shows a 15 year chart of silver about halfway down

http://www.silver-coin-values.com/silver-charts/

very similar the 2 year btc to the 15 year silver


I would think that looking at the charts of Gold/ Silver/ Platinum/  Vs BTC     and looking at charts of USD vs GBP and other currency charts would be a starting point.
 It seems to me BTC will behave more like Gold or silver then the USD GBP or Euro would.

The liquidity Is different trading a piece of silver in at a store to purchase something is not common.

Using a BTC account could become common.  I would also consider the effect of various governments attempting to make it not very liquid at all

 ie recent USA IRS rulings now have temporarily made it more difficult to move coins around.

  Of course a good program or app for tracking coins in and out of your possession.

Would solve the  at constriction   of BTC as 'Money' Created by the IRS rulings.

    My background is Accounting and I see the IRS rulings as correct.

  I think of a btc as a piece of gold/or stock more then any other idea of classification.

I am working on my bachelor's thesis, where I am trying to answer whether Bitcoin qualify to be considered as money. On the empirical part I want to look at the liquidity and velocity to see if it shows behavioral patterns that normally is associated with conventional money.

Now to the question. I have to base the empirical research on a hypothesis, and obviously there is no absolute value of the liquidity and velocity in which a "asset" to be considerate as money.

How could I formulate my hypothesis in a concrete way, to be able to answer my research question?

General thoughts about the topic would also be nice to hear!

(Also, thanks to PETER R)