5 ms·

How do you distinguish a proper currency from a hobby currency? I can think of these criteria on the top of my head: * trading volume * number of shops where i

by hiq 6y ago

How do you distinguish a proper currency from a hobby currency? I can think of these criteria on the top of my head: * trading volume * number of shops where it's accepted * whether you can pay taxes with it Did you have something like that in mind? Or something else? What would lead you to say "this is not just a hobby currency anymore"?

three_seagrass 6y ago
If you want to get into semantics, a currency something that is generally accepted or in use, meaning used by many people and organizations. For Bitcoin, transaction volume is not a good indicator of this because many of the trades (estimated >80%) these days are HFTs. Bitcoin is an asset for sure, but not a real currency.
- deleted 6y ago
  [deleted]
6gvONxR4sf7o 6y ago
I'd say non-financial usage is the appropriate measure. My dollars are a good currency because I pay my mortgage in them, I buy groceries in them, I get my paycheck in them, I pay my friends for my share of dinner in it. The usage towards "stuff" that the economy is made of (activities, goods, etc) should be the measure. I have yet to see bitcoin make a dent there. It seems like bitcoin has actually gotten harder to use there than when I first encountered it. Until then a bitcoin is like a call option or financial derivatives or really exotic instruments. Financially very relevant, heavily used, but so niche that it's of no relevance to basically everybody.
mywittyname 6y ago
Proper currencies are used to pay your bills: anything else is speculative. You might think this is a silly definition, because it means that the determination of how "proper" a currency is depends on where that person lives. And that's absolutely correct. I have no functional use for Turkish Lira. The only reason I would possess any is because I'm speculating that the value of Lira will increase relative to the currency I use to pay for my needs. Using that definition, one could create a Proper Currency Score by taking the number of people or businesses that use each currency and multiply it by the gross value of transactions performed in the currency (excluding currency exchange). This definition is at least reasonable on the surface, as the top currencies would be USD, EUR, and RMB.
- traeregan 6y ago
  > I have no functional use for Turkish Lira. The only reason I would possess any is because I'm speculating that the value of Lira will increase relative to the currency I use to pay for my needs. Or if you’re in Turkey or Northern Cyprus.
  - mywittyname 6y ago
    I'm neither, so it serves no use for me, other than for speculative purposes; and that's my entire point. If the OP wants a metric to use to gauge how "proper" a currency is, that metric should be primarily weighted by 1) how many people need to use it day-to-day, 2) the volume of goods and services transacted it in every day.

by hiq 6y ago

three_seagrass 6y ago

If you want to get into semantics, a currency something that is generally accepted or in use, meaning used by many people and organizations. For Bitcoin, transaction volume is not a good indicator of this because many of the trades (estimated >80%) these days are HFTs. Bitcoin is an asset for sure, but not a real currency.

deleted 6y ago
[deleted]

6gvONxR4sf7o 6y ago

I'd say non-financial usage is the appropriate measure. My dollars are a good currency because I pay my mortgage in them, I buy groceries in them, I get my paycheck in them, I pay my friends for my share of dinner in it. The usage towards "stuff" that the economy is made of (activities, goods, etc) should be the measure. I have yet to see bitcoin make a dent there. It seems like bitcoin has actually gotten harder to use there than when I first encountered it. Until then a bitcoin is like a call option or financial derivatives or really exotic instruments. Financially very relevant, heavily used, but so niche that it's of no relevance to basically everybody.

mywittyname 6y ago

Proper currencies are used to pay your bills: anything else is speculative. You might think this is a silly definition, because it means that the determination of how "proper" a currency is depends on where that person lives. And that's absolutely correct. I have no functional use for Turkish Lira. The only reason I would possess any is because I'm speculating that the value of Lira will increase relative to the currency I use to pay for my needs. Using that definition, one could create a Proper Currency Score by taking the number of people or businesses that use each currency and multiply it by the gross value of transactions performed in the currency (excluding currency exchange). This definition is at least reasonable on the surface, as the top currencies would be USD, EUR, and RMB.

traeregan 6y ago
> I have no functional use for Turkish Lira. The only reason I would possess any is because I'm speculating that the value of Lira will increase relative to the currency I use to pay for my needs. Or if you’re in Turkey or Northern Cyprus.
- mywittyname 6y ago
  I'm neither, so it serves no use for me, other than for speculative purposes; and that's my entire point. If the OP wants a metric to use to gauge how "proper" a currency is, that metric should be primarily weighted by 1) how many people need to use it day-to-day, 2) the volume of goods and services transacted it in every day.