Topic: Let's end one debate: Commodity vs Money (Read 4199 times)

It doesn't matter how I define money.

This is for the courts to decide.

The link into the GLBSE thread is a very clear and important example that the definition of "security" under the criminal law is way much broader that under the contract law. And it is a beautiful example how the "we didn't issue a security" defense was useless in the court. The judges and jury will always focus on the inherent deception in the sales and promotional practices. In the Bowdoin case there were additional counts of mail and wire fraud which greatly strenghtened the prosecution case.

Anyway, I'm not writing this to argue. The point is to provide the interested readers with somewhat competent perspective from non-lawyers on how to avoid getting snagged into an expensive litigation.

I'm hoping that the inteligent readers will understand the arguments and do a further research on their own. When the large portion of the Bitcoin community is engaged in some form of crookery it is easy to get inadvertently caught in some "accesory to fraud" litigation.

Although gold was illegally created by God people continue to use it as money for the last 6000 years. Go figure...

I'm half expecting that in the future the next tranches of Bitcoin will be signed off by some unknown Arsene Lupin who will access the github only through Tor and be essentially nontraceable.

For the purpose of criminal law the issuer is clear: it was Gavin Andresen until 2011-07-03, then the next two tranches were signed by "fabianhjr".

https://github.com/bitcoin/bitcoin/blame/master/src/main.cpp

and look for lines 1309 to 1318.

So, 2112 how do you define money?

By the way, the link you posted by Nagle talks about GBLSE, which is a centralized stock exchange. I don't see how it is related to this discussion.

You are quoting very good sources for the beginners. May I suggest that you dive a little bit deeper: follow the links I gave to the John Nagle's post, and follow his links to the appropriate legal sources.

This back-and-forth is kind of pointless, leads to no greater understanding for anybody. With the beginner-level argumentation one can make a proof that cigarettes are money. And in fact they were in use as such in some prisons and internment camps.

Ultimately, this kind of arguments for and against will end up as an evidence in some future trial about illegal promotional and sales activities of bitcoin. Quite obviously you are a beginner, for example don't meet the definition of "accredited investor". You also never have been involved in any securitues litigation, and probably not in any litigation whatsoever.

Please treat this forum as an opportunity to learn the wider social context of this nice innovative whatchamacallit called bitcoin. Repeatedly arguing the same point over-and-over with somebody like me is just a waste of your time. You can spend it better on a real learning and education. Web is full of the resources to learn, but all the good ones require focus and dedication, they aren't a single page summaries like the ones you referred to.

So, per the very definition of money, bitcoin is plainly just that, money.

My point is that the word money covers too many things and we need to specify more.

I don't know if this is a joke thread, I presume no.

Bitcoin is neither money nor commodity.

Bitcoin is a synthetic security, that is unfortunately receiving a lot of fraudulent promotion.

The existing laws about illegal offerings of securities will be used to prosecute those promoters who perpetuated and are perpetuating the deception.

At this time the amounts involved aren't big enough to trigger criminal prosecutions. The litigation under private or commercial law rules had already occurred.

I presume that all those discussions will be resolved in most jurisdictions in the next 2-3 years, unless the unit price of bitcoin drops to such a low levels that the outcome will not be worth litigating.

Bitcoin is neither money nor commodity.

My point is that the word money covers too many things and we need to specify more.

For me the capital question is
Does money need so called "intrinsic value" (part of its value is not exchange or monetary value derived from the fact that is used as a medium of exchange)?
And the answer is no. As said, money is information.
Money can have only monetary value.

Money can be either an object or a record.

Since the dawn of time, forum members have debated whether Bitcoin is a commodity or a currency/money. Let's ignore what the courts might call it (who the hell knows), and examine it in terms of economics.

If we were fortunate enough to live in a world where the government had not destroyed everyones' economic education, we'd know that "currency" and "commodity" are not mutually exclusive concepts.

It's important to understand where money comes from, when it doesn't come from the diktat of kings. In a world without government monopolization of money, would we have money? Of course we would. But how, without coercion, would the marketplace know what to use as money?

First, let's define commodity. A commodity is a subcategory of "goods." Specifically, commodities are goods which have little or no "qualitative variation" across units of them. Coffee beans. Rice. Wheat. Gold. Iron. Every unit is more or less the same as every other. Cars, houses, and computers are not commodities. Sand would be considered a commodity but it is so common that nobody cares enough to trade futures on it =)

And now let's look at "money." If there is no money in an economy, people trade goods with each other in barter. What you find is that they will start accepting commodities in trade frequently, because they know they are more widely desired and tradeable. Coffee beans are more easily traded than sheep (because sheep are heavy and can't be cut in half). Eventually, that commodity which becomes most widely accepted in barter becomes the de facto "money." Societal markets may gravitate toward one or several forms of money - but always money emerges, and it emerges from its prior categorization as a commodity.

So we see that money IS a commodity - it is that most widely desired commodity. It is the commodity which everyone wants to use in exchange. Review the history of gold, as it was always a commodity and gradually was accepted to the point where it was used as money. But its use as money didn't suddenly remove the label of commodity from it. Gold is both money and commodity. (gold was not chosen arbitrarily either - it's specific properties have made it the best form of money).

Just as "skiing" is a subcategory of "sports," so too is "money" a subcategory of "commodity." So let's please stop debating whether Bitcoin is a commodity or a money. It is absolutely a commodity, for each bitcoin is equal to every other - and it is also money to the extent it is used as barter for payment. Bitcoin is already used in many transactions every day, and thus it is very clearly a money as well as a commodity.

We can argue whether it will continue to be a money, or will replace other monies, etc, but it is silly to ponder whether it's a commodity or a money.

It's both.

First, let's define commodity. A commodity is a subcategory of "goods."

A security requires an issuer.