Topic: Not a currency, not a commodity, but an accounting system (Read 5284 times)

Exactly so. They represent an amount of bitcoins, which is not the same as representing actual bitcoins, in the same way that the number written on a check represents an amount of dollars, not a specific set of dollar bills.

It certainly isn't an obstacle so far as the bitcoin system is concerned. The bitcoins are just placeholders; it doesn't matter what they are, or even if they really exist. It does make a difference when trying to determine what we're actually trading--if anything--for legal purposes, however: commodities, currency, information, etc. Currency is particularly slippery. Outside of the bitcoin system, even fiat currencies which exist almost entirely in the form of digital records represent physical objects. We're expected to believe those computer records are equivalent to actual Federal Reserve Notes, even though there aren't really enough FRNs in existence to balance the accounts. It seems likely to me that if bitcoins can't be considered commodities, then they can't be treated as currency either, even if the bitcoin system as a whole amounts to a currency system.

The closest non-digital analogy for the bitcoin system seems to me to be a multiplayer game, where the bitcoins are the points. So far the legal system does not attempt to regulate gameplay, intervene in disputes over the rules, or tax people on their scores; hopefully this will remain the case in the future.

And the "value" entries in a transaction? E.g., the "50.04750000" in tx "fd207092f921894229388b6b7a0bd5b1f3e30a50629ad2001f09a0e5657faaa4" inside block 171903 as found here:

http://blockexplorer.com/rawblock/00000000000002901eeaa9c60f32ba02de5089cb44db71bacccbb850ec0c4bfd

Don't those numbers somehow represent the amount of Bitcoins being transferred? Although they do not address any individual/unique Bitcoin, I do not see that this would cause a problem as with other fungible things I shouldn't / wouldn't care either?!


Cheers
txcoin

Again, no.  Even the block reward is just another special transaction.  There are no bits that represent a bitcoin, or fifty.

Every transaction is traced back to bits that represent newly generated coins.  They reside in the blockchain as well.

No, they don't.  Only the transactions reside in the blockchain.

You keep pushing this point, but it's wrong imho.  There are actually bits that represent Bitcoins.  They reside in the blockchain.  Access to them is secured by the miner network and by your private address keys in your wallet.

Is it really necessary to explain to people that Bitcoins are just a convention that can disappear given the right circumstances?  Well, it depends.  Do you normally feel it necessary to go around explaining that all property rights are just a convention that can be taken away as well?

Can you show the code/file/db that is a dollar? I think that makes even less sense than showing a bitcoin.

If you count Wells Fargo database as being a dollar then you need to count MtGox bitcoin balance database as BEING a bitcoin in the same way, which is absurd imo.

If that average user doesn't care how stuff works, they can certainly keep using it, and assume that bitcoins themselves exist, and are represented digitally - with a serial number or something similar.  This is simply not so in reality. The question then is whether this distinction has important legal and practical implications. I'd say it does, and ignorance cannot be good in the long run.

Try talking to "average" people about dollars or euros - where they come from, for example. Most of folks will tell you that government prints/issues them, which is simply not true (not the whole truth, anyway), and this ignorance leads to real problems. I wouldn't want Bitcoin to start suffering from same obscurity, as this would open the door to abuse and manipulation. The mechanics of Bitcoin are not that hard for an average person to grasp, and we should all work diligently to help them get it right.

The same could be said for dollars in a DB.

Sure I can. I could open my Satoshi wallet and show you my balance.  The average user wouldn't
argue.

True, but there are no Bitcoins in circulation. Only signed transactions in the ledger (blockchain).  You cannot show me digits in a computer and say "See, this is one bitcoin."

Most dollars in circulation are just digits in a  computer.

OK, wow, that confirms it, they are in fact totally worthless.
 

Actually no, you cannot make a joint from a dollar bill.

Indeed, you could say that, and be entirely correct.  Because that's true.  Those Federal Reserve Notes that you carry around in your wallet are represented by the ink and paper, but currency is always an abstract idea.  As I said before, currencies are just another form of standardized unit of measurement, in this case of relative valuation.  We mere mortals need numbers to make economic calculations, and currencies are just numbers.

But the accounting system only accounts for Bitcoins.

You can say that Dollars don't really exist either, since they're just numbers on little pieces of paper, and those papers are "just an accounting system".

Good point, thank you.

This

I believe that, too.  But the Misis Regression Therom applies to naturally occuring money.

Thanks, and 100% agreed.  I'd go even further by saying that even if there were tokens in the system used to represent bitcoins, they still wouldn't be commodities - because their only use would still be as a medium of exchange.


A distinction that seems to escape some in this thread, unfortunately.  I'd also speculate that many in the "bitcoin is a commodity" camp believe so because they subscribe to an ideology + economic philosophy that claims "real" money must start as a commodity.