Calling them currrency is already a scam. They are not a currency. They are hardly money (look up the difference yourself), because you mostly can’t buy stuff with it. And for sure, you can’t pay taxes with them.
I read a great question here on HN a while back to enthusiasts:
If you were the last person in earth to receive coins, would you still like them and endorse them?
So many comments can be traced to the idea of becoming richer. Compare this to the Euro: When the Euro was introduced as a currency in the EU in 2001, people gave zero fucks whether they were first to exchange their old currency for the new one or the last.
Sometimes I cannot buy legitimate stuff without them. Just today, I bought some books for which US credit/debit cards refused to work. And I see that every week.
I usually don't go out of my way to pay with bitcoin, but recently needed to buy a PSN prepaid card and every website I tried either declined my 2 credit cards and paypal outright or requested some ridiculous verification (record myself on camera holding a passport to my face? To buy a $10 prepaid card? No thanks)
In the end I stumbled upon a shop that accepted bitcoin and got my PSN card in the time it took to get one network confirmation.
I buy heaps of stuff with bitcoin. Not drugs or anything illegal, but computer equipment, membership fees, server hosting, domains and 2nd hand goods from friends.
You're bartering for heaps of stuff. I get heaps of stuff by offering services or other stuff in exchange. Yet my services or other stuff are not a currency. And some towns accept taxes in form of community work for example which is also not a currency.
> crypto is far from "not a currency"
It's explicitly called "not a currency" by both Fed and the ECB as far as I know. Now it all boils down to whether you prefer your personal definition of currency over the one coming from central banks and laws.
Alternative currencies are the same as alternative facts or alternative truth. They can have the same effect as the real thing and be used successfully achieve the same purpose. But they shouldn't be confused.
Some people like Bitcoin and some people use it to pay for stuff, and they want to see more people like them, so they can transact in Bitcoin more.
Some critics seem to like making frankly ill conceived semantic arguments about the academic definition of a currency (or on your case, appeals to authority), but it really has no relation to whether Bitcoin is going to succeed or not succeed.
> Some people like [cigarettes] and some people use it to pay for stuff, and they want to see more people like them, so they can transact in [cigarettes] more.
Therefore cigarettes are currency. Liking something is not an argument.
> frankly ill conceived semantic arguments about the academic definition of a currency
My argument is ill conceived because it's "just" based on the academic (legal) definition of currency? We truly do live in a world of "alternative truths” and “alternative facts” where using the actual definition of something in a relevant context is frowned upon.
Yes, a good example of prison currency. Another form of currency (in prison but also outside) is sex. And it perfectly fits GP’s “argument” that “some people like it, some people pay with it, some people want more” and all that.
We can either take the “everything is a currency” route but that gets us nowhere, or accept the official, legal, and recognized definition. The “ill conceived” argument based “only” on facts so to speak.
What's your source for an "official, legal, and recognized definition"?
The definition used by economists includes much more than just fiat money. The definition in most dictionaries includes anything used a medium of exchange. Paper money isn't even the most common form of currency these days (beaten by credit cards, checks, and electronic funds transfer).
As an example the ECB (European Central Bank, central bank for the Eurozone) declared exactly that [0], as I said in my original comment. The ECB, the Fed, the SEC (as you can read from the current HN article) all see crypto as securities and way too volatile at this time (something you don't want in a currency). This may change in the future but it doesn't change the current state of fact. Another important aspect is that accepting it as an official currency means it will have to be regulated like a currency, rather than a security or (mostly) unregulated like today.
The only major central bank that is truly dabbling in crypto is the PBC (that's People's Bank of China) and I think the consensus among people in the sector is that it's really a speculative move, just like most ICOs.
Edited for courtesy. It initially felt like one of the classic methods of arguing a fact on HN: request citations worthy of a PhD thesis for every single word. It's unfortunately all too common here to deter anyone from contradicting.
Sorry, pressed for time. But I don't think missing an unsourced comment from earlier in the thread and asking a question about it deserves that kind of response.
I asked the question hoping to learn something, and I did. So thanks for that, if not for the attitude.
Also because I noticed only now, whether currency is paper, electronic, or any other material is not actually what tells currencies apart. But while classic legal tender is backed by the goods and services of the country that uses it (I know this part is a bit arguable but let's go with it), crypto is more or less backed by nothing but the trust that the blockchain can't be hacked. One bad hack and the value of BTC becomes 0, something very hard to do with a classic currency but catastrophic if it happens. It's also very susceptible to volatile bouts, as seen before. BTC could be a "real" currency but it would be an overall bad one that could not replace the classic currencies in it's current form. It doesn't mean it can't become one but it would have to change in ways that would take it away from the current BTC.
Take a hypothetical CMU (Close04 Monetary Unit) backed by the value of my belongings. That's a token that goes up and down in value as I buy more stuff or my house gets more expensive, or as I issue more tokens (inflation). But it's only as valuable as the trust you have in me and the laws that prop up that trust. If I sell all my stuff and disappear your token is worth nothing and there's very little you can do. There are no protections, there's no legal mechanism that prevents me from selling my stuff. For a coin to become a proper currency it needs some of those props. Unfortunately most people are internet educated in these aspects so they only understand once they get swindled. Every time a cryptocoin is abused, an exchange goes bust, you see a lot of converts and crypto regulation starts to sound better.
They don't, you can use any medium for exchange. They have monopoly in deciding what is and what isn't an official currency.
As for the rest of your question, the people give them the power as part of the democratic process. Many people realized that whether they like it or not the little protection they get from a government is better than nothing. And it's enough to look at people's reaction when they get swindled out of their completely unregulated coin: ask the government to fix it and punish the swindlers.
Actually, I felt your argument was not based on the academic definition of a currency, but rather on "a central bank said so in a Twitter thread".
The arguments that people usually make about Bitcoin not fitting the legal definition of money are ill-conceived because they are semantic. Apparently, money is: a means of exchange, a store of wealth, a unit of account. It is clearly all of that to some people, so it undoubtedly fits the definition. But just because it fits into the academic definition of money, doesn't it can't be considered an asset. It fits the definition of an asset as well. Coincidentally, Wikipedia says about the term asset: "It covers money [...] belonging to a business or person".
Of course, now we are talking about money, not currency? What's the difference between money and currency?
These are all very interesting questions for linguists. But if you want to have an actual argument about something other than semantics, your discussion has to be grounded in why you care about one term or the other being applied.
But I'm bartering if I use £/$/€ too then. I barter my work for tokens, I exchange the tokens for goods. Does it matter what the tokens are if I can exchange them?
It matters because currencies, securities, and commodities are regulated differently and by different institutions. It may sound to you like they should be the same but they're not. They are different financial instruments, just like bonds and stocks are different from cash. What would you think if someone called an L3 cache "a CPU RAM", or an SD card a "micro hard disk"?
We're on a highly technical site so I would expect the same degree of accuracy when using terms from other fields as you expect when talking computers.
Well I think your expectations are wrong, but think of it like this, the end user doesn't care if the work is being done by an L3 cache or a "CPU ram", they could call it a "CPU cache", and as long as it does what they expect it to do they don't care for the specifics.
In this example, bitcoin can be exchanged for goods and services, much like an approved currency,so the end user doesn't care what you call it just that it works,and in that respect bitcoin does work.
Cryptocurrencies are fiat currencies: They have no intrinsic value except what people collectively agree to pretend they do. It's paper money on a computer.
At least gold has real uses in jewellery and industrial applications to put a floor under its value.
This is a bad necessary condition for considering something a currency.
I definitely cannot pay my taxes in USD. Does that mean USD is not a currency?
Or did you mean that you have to be able to pay taxes with it somewhere? So, hypothetically, if someone founded a microstate which allowed paying taxes in Bitcoin, then it would become a currency? But that seems ridiculous given that it would have exactly zero impact on me unless I moved there so I don't think you meant that.
As a matter of fact, I often (read: most of the time) cannot buy things using USD in my country. Yet I am a holder of USD and spend it when buying things in my country quite often. How so? Well, I sell the USD in exchange for my country's currency at the point of sale, just like Bitcoin.
> This is a bad necessary condition for considering something a currency.
On the contrary!
'Money' is just IOU notes. What gives these IOU notes value is that governments use them for paying welfare and civil servant salaries, and in turn take them back when collecting taxes.
> So, hypothetically, if someone founded a microstate which allowed paying taxes in Bitcoin, then it would become a currency?
Yes. But with a caveat: the wealth of a government's welfare/civil servant class and the threat of its tax collectors is what gives currency value. The blockchain here is entirely superfluous, this hypothetical currency would be just as valuable regardless of whether a cryptocurrency scheme is used.
So then the various cryptocurrencies fit the bill because a lot of people are willing to treat them as IOU notes among themselves.
> What gives these IOU notes value is that governments use them for paying welfare and civil servant salaries, and in turn take them back when collecting taxes.
But if some people are willing to treat a cryptocurrency as IOU notes, then that cryptocurrency is exchangeable for a currency like USD, EUR, etc, again allowing me to pay those taxes. This is no different than the case of me using USD to produce money for paying taxes to my own country which doesn't acknowledge USD, which you haven't addressed.
> Yes. But with a caveat: the wealth of a government's welfare/civil servant class and the threat of its tax collectors is what gives currency value.
I disagree. I agree with your initial point, though: money is just IOU notes. As long as there is someone willing to buy those IOU notes off of you, it's valuable.
> if you were the last person in earth to receive coins, would you still like them and endorse them?
If I was the last person on earth, I wouldn’t care for gold, precious metals diamonds, stock, bonds, cash and a whole lot of other assets (+ other last person on earth issues)
Well if I was the last person on earth to receive USD I wouldn’t be happy because that means I’d never be able to spend it on anything (if I did, that person would become a later recipient of USD).
> If you were the last person in earth to receive coins, would you still like them and endorse them?
Are you being serious when you're asking that question? That question seems to be a product of an echo chamber.
Anyways to answer your question, yes, why wouldn't you still receive and endorse them? The idea behind cryptocurrencies is follows:
* Bitcoin is the cryptocurrency which is aimed to be the perfect store of value. Because it's fixed in supply and has the maximum network security, it serves as a backbone of the cryptocurrency ecosystem. Govts and pro-intervention economists don't like it, but Libertarians and (real) pro-free market economists love it. Even if you're the last person to receive bitcoin, it's still a better option because now you can save in a non-inflationary currency.
* Ethereum and other smart contract platforms allow creation of decentralized contracts between people, this facilitates creation of a system which isn't tied or dependant on the state to enforce it. Even if you're the last person to receive Ethers or Tezos or Cardano, etc, you're acquiring it in order to use the network. It's like asking would you like to be the last person to receive the arcade machine tokens.
A couple of shops (jewelry places mainly) and most food delivery services around me accept bitcoin.
So I can use them as a currency. It's like duck typing. If it looks like a currency and behaves like a currency, it'd a currency! (Overly simplistic I know, but I'd challenge the idea that it outright can't be a currency)
The commodity being exchanged is the Bitcoin and the goods/services. If the business wants to hold the Bitcoin forever, they can. If they want to sell for USD, they can.
Paying in Bitcoin is the same way you just described as "paying in gold".
I read a great question here on HN a while back to enthusiasts:
If you were the last person in earth to receive coins, would you still like them and endorse them?
So many comments can be traced to the idea of becoming richer. Compare this to the Euro: When the Euro was introduced as a currency in the EU in 2001, people gave zero fucks whether they were first to exchange their old currency for the new one or the last.
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