Bitcoin is something radically new. Nothing like Bitcoin has been possible until now. I would go so far as to consider it
sui generis; "in its own class". This makes it important to understand what Bitcoin actually is before we try to describe it to others.
We're getting a good handle on the code, and of course on Bitcoin's function and utility, but what words should we use to describe Bitcoin itself? There has been some debate in other threads [mostly my doing] over how it is like/not like money, cash, dollars, etc. I'd like to start this thread by focusing on the term "money", and play Devil's avocate by asking for your best arguments that Bitcoin IS money.
My legal dictionary states "In usual and ordinary acceptation it [money] means gold, silver, or paper money, used as circulating medium of exchange, and does not embrace notes, bonds, evidences of debt, or other personal or real estate." [cites omitted]
Wikipedia says "Money is any object that is generally accepted as payment for goods and services and repayment of debts in a given country or socio-economic context. The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, occasionally, a standard of deferred payment." [cited omitted]
Webster's Online Dictionary defines money as:
- 1. The most common medium of exchange; functions as legal tender; "we tried to collect the money he owed us".
- 2. Wealth reckoned in terms of money; "all his money is in real estate".
- 3. The official currency issued by a government or national bank; "he changed his money into francs".
- 4. A piece of metal, as gold, silver, copper, etc., coined, or stamped, and issued by the sovereign authority as a medium of exchange in financial transactions between citizens and with government; also, any number of such pieces; coin.
- 5. Any written or stamped promise, certificate, or order, as a government note, a bank note, a certificate of deposit, etc., which is payable in standard coined money and is lawfully current in lieu of it; in a comprehensive sense, any currency usually and lawfully employed in buying and selling.
- 6. In general, wealth; property; as, he has much money in land, or in stocks; to make, or lose, money.
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I maintain that per these definitions, Bitcoin cannot possibly be described as "money". And further, I think that those who do describe Bitcoin as "money" are doing this community a disservice.
But that is just my point of view. Are there any that can convincingly argue otherwise, that Bitcoin IS money?
It's useful to look at Bitcoin and it's Blockchain as a mechanism for the conveyance of value, that allows 'money' to be transferred across borders, globally and with minimal transaction related fees.
Taking this view you're able to see Bitcoin as somewhat of a vehicle that leverages the internet to transport fiat currencies from position 1, to position 2 - without this money having to pass through the hands of any intermediaries along the way... which allows the end user to avoid fees and therefore a bundle of value is added to the equation for the end user... at least when we're talking about international remittances.
So the fact that I can take $20, exchange it for it's bitcoin equivalent, send these bitcoins to a friend in Singapore - who then converts them into Singapore Dollars could suggest that Bitcoin wasn't mean't to be 'money,' but rather a value transmission system.
This doesn't mean that BTC to BTC transactions don't occur... but it could suggest that there is a significant amount of network participants that have the end goal of converting their bitcoins into a fiat currency at one point or another.
In my view, we need to see more BTC to BTC transactions occurring. We need more network participants who aren't playing the price speculation game and aren't simply hoarding Bitcoins in anticipation of a price hike.
A lot more work needs to be done before we get there
