Topic: The Definition of Cash - page 2. (Read 1928 times)
Satoshi Nakamoto used the term 'cash' in the title of the Bitcoin white paper. That's good enough for me.
Great post OP and interesting points.
One small correction, there is a "3rd party" involved in the transfer of bitcoins, that of the bitcoin network itself, miners, relaying nodes, etc. However, as long as your TX abides with the protocol the intervention of that '3rd party' is very limited and highly improbable.
Cash, or any bearer instruments are, imho, a more pure form of money, with less encumbrances and more highly fungibie in general. Also keep in mind blacklists of serial numbers for certain stolen notes, tokens etc are anti-ledgers that reduce 'cashness' for some systems.
Of course, cryptography opens up many new possibilities for alternate forms of ownership, 'cash' and monetary properties once concepts like valuable immutable data and money as a content type are absorbed.
One small correction, there is a "3rd party" involved in the transfer of bitcoins, that of the bitcoin network itself, miners, relaying nodes, etc. However, as long as your TX abides with the protocol the intervention of that '3rd party' is very limited and highly improbable.
Cash, or any bearer instruments are, imho, a more pure form of money, with less encumbrances and more highly fungibie in general. Also keep in mind blacklists of serial numbers for certain stolen notes, tokens etc are anti-ledgers that reduce 'cashness' for some systems.
Of course, cryptography opens up many new possibilities for alternate forms of ownership, 'cash' and monetary properties once concepts like valuable immutable data and money as a content type are absorbed.
Cash (noun). Rules everything around me. See also: Cream. Get the money. Dollar dollar bills. Yo.
Cash is an outdated word. I see people transferring money from their savings account to their spending account on the fly with a smartphone, to buy a damn sandwich with their card.
If that is not cash, u tell me.
If that is not cash, u tell me.
I see that the same word : cash, is often used to talk about 2 radicals different things.
In the first definition, cash distinguishes two different type of money : "ledgered" money, versus "owned by the bearer" ones.
Wire transfer, checks, swipe card, versus bills.
In Mises terminology, we might be tempted to think that this is what he refers as "credit money" versus "fiat money".
For Mises, Credit money is any claim on someone or something falling due in the future that is used as a general medium of exchange.
A bank balance represents a claim issued by the bank, that you can redeem for fiat money, and this is what is used instead of fiat money for the majority of exchanges today.
But in the past, bank issued notes, which are both "owned by the bearer" and credit money, felt into the definition of "cash", and considered more or less equivalent to government's issued money. (Milton Friedman explaining that in A Monetary History of the United States)
With this definition, is Bitcoin cash ? because the peculiar thing is that it is ledgered money but still "owned by the bearer".
I would empirically say that the specific feature of cash widely used today is whether or not the money is ledgered.
This would explain why any "Toward cashless society" articles that you can read in the web do not think that moving Bitcoin with your mobile phone is similar to using cash.
We should note that Bitcoin is the first ledgered money that is still "owned by the bearer".
But it is also the first ledgered money that does not represent Credit Money. (to my knowledge)
The second definition that I see arising from the web, and I think is better suited is the presence of third party.
Under this new definition, any medium of exchange that can be transfered between two peers without any approval by a third party is considered cash.
This definition is simple and clear cut. Under this definition, Bitcoin is cash, no other discussion needed.
Contrary to the previous definition, a "Toward cashless society" article would not focus on the fact that money becomes more and more ledgered.
It would focus on the increasing requirement of approval of a third party for any exchange between two persons.
Interestingly enough, this is the definition implied by Milton Friedman in 1999 when he was speaking of e-cash. https://www.youtube.com/watch?v=fYD17h6hlCs
[UPDATE]
This second definition is also the definition that Satoshi is using.
[/UPDATE]
So the question is which definition are you using ?
In the first definition, cash distinguishes two different type of money : "ledgered" money, versus "owned by the bearer" ones.
Wire transfer, checks, swipe card, versus bills.
In Mises terminology, we might be tempted to think that this is what he refers as "credit money" versus "fiat money".
For Mises, Credit money is any claim on someone or something falling due in the future that is used as a general medium of exchange.
A bank balance represents a claim issued by the bank, that you can redeem for fiat money, and this is what is used instead of fiat money for the majority of exchanges today.
But in the past, bank issued notes, which are both "owned by the bearer" and credit money, felt into the definition of "cash", and considered more or less equivalent to government's issued money. (Milton Friedman explaining that in A Monetary History of the United States)
With this definition, is Bitcoin cash ? because the peculiar thing is that it is ledgered money but still "owned by the bearer".
I would empirically say that the specific feature of cash widely used today is whether or not the money is ledgered.
This would explain why any "Toward cashless society" articles that you can read in the web do not think that moving Bitcoin with your mobile phone is similar to using cash.
We should note that Bitcoin is the first ledgered money that is still "owned by the bearer".
But it is also the first ledgered money that does not represent Credit Money. (to my knowledge)
The second definition that I see arising from the web, and I think is better suited is the presence of third party.
Under this new definition, any medium of exchange that can be transfered between two peers without any approval by a third party is considered cash.
This definition is simple and clear cut. Under this definition, Bitcoin is cash, no other discussion needed.
Contrary to the previous definition, a "Toward cashless society" article would not focus on the fact that money becomes more and more ledgered.
It would focus on the increasing requirement of approval of a third party for any exchange between two persons.
Interestingly enough, this is the definition implied by Milton Friedman in 1999 when he was speaking of e-cash. https://www.youtube.com/watch?v=fYD17h6hlCs
[UPDATE]
This second definition is also the definition that Satoshi is using.
[/UPDATE]
So the question is which definition are you using ?
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