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First: I admit I wasn't aware that retailers accepted bitcoins when I posted that comment. I've discovered otherwise now, so the "hill of beans" comment is wron

First: I admit I wasn't aware that retailers accepted bitcoins when I posted that comment. I've discovered otherwise now, so the "hill of beans" comment is wrong. Sorry. :) That's a game of semantics. Gold's current price has little to do with its luxury good status, and everything to do with its scarcity and historical claim to fame as a currency. "Semantics" have nothing to do with it. Commodities [0] != currencies [1], whether you're familiar with the definitions or not. One exists as a medium of exchange, while the other is a good with no differentiation between sources. Currencies are differentiated by the trustworthiness of the governments that issue them (you'd probably accept a US dollar today before accepting a German papiermark [2] in 1924). Also, gold's price is a function of the market's supply and demand for gold as either (a) an investment vehicle or (b) an input in the production of goods. Investors don't give a damn that the US dollar was pegged to gold 200+ years ago--they're simply investing in it to make money. The idea that gold is "currency" is ridiculous. Name a first-world country where gold is widely accepted as currency. Some places in some parts of the world might accept gold, but it's not backed by a central body nor does it carry a relatively stable value (unlike fiat money). [0] http://en.wikipedia.org/wiki/Commodity http://en.wikipedia.org/wiki/Commodity [1] http://en.wikipedia.org/wiki/Currency http://en.wikipedia.org/wiki/Currency [2] http://en.wikipedia.org/wiki/German_papiermark http://en.wikipedia.org/wiki/German_papiermark

beagle3 15y ago
> "Semantics" have nothing to do with it. Commodities [0] != currencies [1] Semantics have everything to do with it, as I will demonstrate below. > One exists as a medium of exchange, while the other is a good with no differentiation between sources. Well, as long as the USD is not fake, you don't care what the source is :) Similarly, for non-fake gold. > Currencies are differentiated by the trustworthiness of the governments that issue them. Today, that is true. However, the Chumash people had a currency that -- like bitcoin -- was not centrally managed, and reflected work put into something, rather than any fiat or backing store of value. http://en.wikipedia.org/wiki/Chumash_people#Culture http://en.wikipedia.org/wiki/Chumash_people#Culture - I can't remember where I read a more detailed account. Basically, you could sit on the beach all day and make money -- and it took slightly longer than the equivalent exchange rate would get you in food (so you could hunt/gather food, or make money, with comparable time expenditure, and exchange them). The whole system broke down when European drills (as manufacturing tools) were introduced and made money making simple. > First: I admit I wasn't aware that retailers accepted bitcoins when I posted that comment. I've discovered otherwise now, so the "hill of beans" comment is wrong. Sorry. So - let's get back to semantics: do you agree bitcoin is currency? (exists as a medium of exchange), or commodity? (a good with no differentiation between sources) because it has both properties, thus showing that the definitions are not mutually exclusive. A USD is currency but not commodity; Beans are commodity but not currency. Gold, Chumash beads and bitcoin are both. > Name a first-world country where gold is widely accepted as currency. In NYC where I live, hundreds of stores will accept your gold in exchange for other merchandise (at a bad exchange rate for you...). You can identify them by the sign "We buy gold". You must have seen them in other places too. > but it's not backed by a central body True, but .... > nor does it carry a relatively stable value (unlike fiat money) Wrong, and if you truly believe that you might be beyond help. The US devalued the USD by 50% in 1931. Belarus did it to their fiat currency last week. Between 2002 and 2006, the EUR/USD exchange rate went from 0.8 to 1.5 (almost 100%) - "stable"? In fact, up until 1971, the backing for the USD (and most other currencies) was gold - it only became a true fiat currency in 1971! Before that, it was a claim on some amount of gold in fort knox, and value was derived from that.

beagle3 15y ago

> "Semantics" have nothing to do with it. Commodities [0] != currencies [1] Semantics have everything to do with it, as I will demonstrate below. > One exists as a medium of exchange, while the other is a good with no differentiation between sources. Well, as long as the USD is not fake, you don't care what the source is :) Similarly, for non-fake gold. > Currencies are differentiated by the trustworthiness of the governments that issue them. Today, that is true. However, the Chumash people had a currency that -- like bitcoin -- was not centrally managed, and reflected work put into something, rather than any fiat or backing store of value. http://en.wikipedia.org/wiki/Chumash_people#Culture http://en.wikipedia.org/wiki/Chumash_people#Culture - I can't remember where I read a more detailed account. Basically, you could sit on the beach all day and make money -- and it took slightly longer than the equivalent exchange rate would get you in food (so you could hunt/gather food, or make money, with comparable time expenditure, and exchange them). The whole system broke down when European drills (as manufacturing tools) were introduced and made money making simple. > First: I admit I wasn't aware that retailers accepted bitcoins when I posted that comment. I've discovered otherwise now, so the "hill of beans" comment is wrong. Sorry. So - let's get back to semantics: do you agree bitcoin is currency? (exists as a medium of exchange), or commodity? (a good with no differentiation between sources) because it has both properties, thus showing that the definitions are not mutually exclusive. A USD is currency but not commodity; Beans are commodity but not currency. Gold, Chumash beads and bitcoin are both. > Name a first-world country where gold is widely accepted as currency. In NYC where I live, hundreds of stores will accept your gold in exchange for other merchandise (at a bad exchange rate for you...). You can identify them by the sign "We buy gold". You must have seen them in other places too. > but it's not backed by a central body True, but .... > nor does it carry a relatively stable value (unlike fiat money) Wrong, and if you truly believe that you might be beyond help. The US devalued the USD by 50% in 1931. Belarus did it to their fiat currency last week. Between 2002 and 2006, the EUR/USD exchange rate went from 0.8 to 1.5 (almost 100%) - "stable"? In fact, up until 1971, the backing for the USD (and most other currencies) was gold - it only became a true fiat currency in 1971! Before that, it was a claim on some amount of gold in fort knox, and value was derived from that.