Topic: Not a currency, not a commodity, but an accounting system - page 4. (Read 5371 times)
A digital commodity fits it so perfectly I seriously can't see anything absurd about it.
There has been lots of discussion, for various reasons, about how to classify Bitcoin. Most of it has been focused on currency vs. commodity dichotomy (from taxes to exchanges to the Good Wife episode). Fringe discussions also involved securities.
The fact is, Bitcoin does not fit comfortably into any of these categories.
The fact is, Bitcoin does not fit comfortably into any of these categories.
Bitcoin is a commodity (limited, uniform/standard, divisible, useful), and it is a currency because its properties as a commodity make it extremely useful as such.
Real money always becomes money while simultaneously being a commodity. They're not mutually exclusive. Gold, and Bitcoin, are both commodity monies.
Bitcoin is definitely NOT a security as it requires the promise or backing of no separate party. The Bitcoin software is indeed an accounting system, but Bitcoins themselves are not an accounting system.
Part of the reason people get confused about these things is that Bitcoin is two parts: 1) a commodity useful as money and 2) an accounting and payment system which uses the commodity money. It may have been smarter to give the two pieces different names, but they're both called Bitcoin
Good point, as usual - although I might not like the consequences. If it's a commodity, in most jurisdictions each fiat-btc exchange would have a sales tax attached, and each trade of goods/services would be taxed as barter. If it's a currency, it'll be highly regulated - not a problem in itself, but has a great potential for abuse by the regulators for ideological/economic reasons, just like fiat.
There has been lots of discussion, for various reasons, about how to classify Bitcoin. Most of it has been focused on currency vs. commodity dichotomy (from taxes to exchanges to the Good Wife episode). Fringe discussions also involved securities.
The fact is, Bitcoin does not fit comfortably into any of these categories.
The fact is, Bitcoin does not fit comfortably into any of these categories.
Bitcoin is a commodity (limited, uniform/standard, divisible, useful), and it is a currency because its properties as a commodity make it extremely useful as such.
Real money always becomes money while simultaneously being a commodity. They're not mutually exclusive. Gold, and Bitcoin, are both commodity monies.
Bitcoin is definitely NOT a security as it requires the promise or backing of no separate party. The Bitcoin software is indeed an accounting system, but Bitcoins themselves are not an accounting system.
Part of the reason people get confused about these things is that Bitcoin is two parts: 1) a commodity useful as money and 2) an accounting and payment system which uses the commodity money. It may have been smarter to give the two pieces different names, but they're both called Bitcoin
Can someone explain the triple entry part?
Here: https://financialcryptography.com/mt/archives/001325.html
Quote from: MoonShadow
That's exactly what a currency is. A currency isn't the paper it's printed upon. A currency is a standardized unit of measurement, in this case, of relative valuations. The accounting in a cash economy is performed by the exchange of paper scripts that abstract value, bitcoin does the same thing using a collective & distributed triple entry ledger system (the blockchain).
Whether whittling marks on a tally stick, hauling large stones from one island to another, or printing paper notes, they all seek to achieve what is quoted above. Bitcoin just does it better.
Can someone explain the triple entry part?
There has been lots of discussion, for various reasons, about how to classify Bitcoin. Most of it has been focused on currency vs. commodity dichotomy (from taxes to exchanges to the Good Wife episode). Fringe discussions also involved securities.
The fact is, Bitcoin does not fit comfortably into any of these categories. As soon you decide it's one or the other, absurdity pops up. Some even argued, quite reasonably, that Bitcoin is simply Bitcoin, different than anything we've had before, and that it will be up to courts and people to slowly decide how to deal with it, set precedents, etc.
Isn't the most appropriate desription of Bitcoin in traditional terms: an accounting system? That's all it really does, and it does it beautifully. It's a distributed, decentralized, pseudonymous, peer-to-peer, secure, irreversible accounting system.
Thoughts?
The fact is, Bitcoin does not fit comfortably into any of these categories. As soon you decide it's one or the other, absurdity pops up. Some even argued, quite reasonably, that Bitcoin is simply Bitcoin, different than anything we've had before, and that it will be up to courts and people to slowly decide how to deal with it, set precedents, etc.
Isn't the most appropriate desription of Bitcoin in traditional terms: an accounting system? That's all it really does, and it does it beautifully. It's a distributed, decentralized, pseudonymous, peer-to-peer, secure, irreversible accounting system.
Thoughts?
Not too long ago someone used the term "ledger" instead of accounting system in a post much like this one.
BTW, it's actually a digitally distributed, decentralized, pseudonymous, peer-to-peer, cryptographically secure, irreversible accounting system.
Isn't the most appropriate desription of Bitcoin in traditional terms: an accounting system? That's all it really does, and it does it beautifully. It's a distributed, decentralized, pseudonymous, peer-to-peer, secure, irreversible accounting system.
That's exactly what a currency is. A currency isn't the paper it's printed upon. A currency is a standardized unit of measurement, in this case, of relative valuations. The accounting in a cash economy is performed by the exchange of paper scripts that abstract value, bitcoin does the same thing using a collective & distributed triple entry ledger system (the blockchain).
It's a distributed, decentralized, pseudonymous, peer-to-peer, secure, irreversible accounting system.
yes, it is just like every other distributed, decentralized, pseudonymous, peer-to-peer, secure, irreversible accounting system.
even my grandmother knows what one of those is.
Not true. It is significantly different from namecoin.
What is the absurdity in considering Bitcoin a currency?
It's a distributed, decentralized, pseudonymous, peer-to-peer, secure, irreversible accounting system.
yes, and it is just like every other distributed, decentralized, pseudonymous, peer-to-peer, secure, irreversible accounting system.
even my grandmother knows what one of those is.
There has been lots of discussion, for various reasons, about how to classify Bitcoin. Most of it has been focused on currency vs. commodity dichotomy (from taxes to exchanges to the Good Wife episode). Fringe discussions also involved securities.
The fact is, Bitcoin does not fit comfortably into any of these categories. As soon you decide it's one or the other, absurdity pops up. Some even argued, quite reasonably, that Bitcoin is simply Bitcoin, different than anything we've had before, and that it will be up to courts and people to slowly decide how to deal with it, set precedents, etc.
Isn't the most appropriate desription of Bitcoin in traditional terms: an accounting system? That's all it really does, and it does it beautifully. It's a distributed, decentralized, pseudonymous, peer-to-peer, secure, irreversible accounting system.
Thoughts?
The fact is, Bitcoin does not fit comfortably into any of these categories. As soon you decide it's one or the other, absurdity pops up. Some even argued, quite reasonably, that Bitcoin is simply Bitcoin, different than anything we've had before, and that it will be up to courts and people to slowly decide how to deal with it, set precedents, etc.
Isn't the most appropriate desription of Bitcoin in traditional terms: an accounting system? That's all it really does, and it does it beautifully. It's a distributed, decentralized, pseudonymous, peer-to-peer, secure, irreversible accounting system.
Thoughts?
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