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To which I would of course reply that they are not money ;)

by dools 3y ago

chrisco255 3y ago
To which I would reply that money is defined by three properties: 1. Store of Value 2. Unit of Account 3. Medium of Exchange Of which it's fair to say that several crypto currencies fit that bill.
- a_bonobo 3y ago
  Oh good, so Beanie Babies are also money :)
  - ensignavenger 3y ago
    Beanie Babies would make a rather poor unit of account. As at any given time, two of the same model Beanie Baby can be worth two very different amounts in trade based on their condition. Whereas a dollar bill does not matter what its condition is (at least within a reasonable range), it is still worth a dollar. Also, two different models of Beanie Babies will vary in value with relation to each other, whereas a one dollar bill will generally always be worth 1/100th of a 100 dollar bill.
- dools 3y ago
  I disagree with that definition of money. I don't think it actually defines what money is or what it does. I think that if you want to think of money in terms of "value" that rather than a "store" of value, it is a "record" of value. If you want to think of it as a unit of account, it has to be a state unit of account in order to actually function as money. And finally I think that the function of money as a medium of exchange is actually a side effect; that is to say that money is the most liquid asset because it is created by an obligation in common to all citizens of a sovereign entity. As such, it is the most likely medium of exchange because it is universally accepted. However, anything can be a medium of exchange. Hot rocks can be used to heat a room, but you wouldn't call a pile of hot rocks a heater. In the same way, virtually anything can be a medium of exchange, but money (by virtue of being created by the imposition of a tax liability) is the most effective medium of exchange. My definition of money is: a credit that can be used to extinguish a tax liability imposed by a sovereign. Everything else is a commodity.
- kmeisthax 3y ago
  Which ones? Every crypto that gets any amount of usage immediately hits up against deliberate scaling limits in the consensus mechanism[0] and stops being a useful medium of exchange. Cryptocurrency also has extreme speculative risks, which means that it's useless as a unit of account or a store of value. Fiat currencies don't have these problems[1]. Because they are instituted by a government that forces people to use it, they have a large volume of economic activity which makes it harder for the currency to swing dramatically in value. The reason why Bitcoin can fluctuate so wildly is because few actually use it like a currency, so there's nothing to buffer against market manipulators and forex speculators. [0] Because crypto needs global consensus over every satoshi in the system, all transactions need to be widely propagated to all full nodes, which imposes strict limits on how much transaction data can be processed at once. If the limits are too high then only large institutions can run full nodes which is centralizing. Of course, literally everything else in crypto is centralizing, because centralization is the gravitational force of economics. [1] No, Zimbabwe doesn't count.
nvm0n2 3y ago
I suspect Thiel has got bored with such debates at least ten years ago tbh and given his history with PayPal quite possibly 30.

To which I would of course reply that they are not money ;)

by dools 3y ago

To which I would of course reply that they are not money ;)

To which I would reply that money is defined by three properties: 1. Store of Value 2. Unit of Account 3. Medium of Exchange Of which it's fair to say that several crypto currencies fit that bill.

a_bonobo 3y ago
Oh good, so Beanie Babies are also money :)
- ensignavenger 3y ago
  Beanie Babies would make a rather poor unit of account. As at any given time, two of the same model Beanie Baby can be worth two very different amounts in trade based on their condition. Whereas a dollar bill does not matter what its condition is (at least within a reasonable range), it is still worth a dollar. Also, two different models of Beanie Babies will vary in value with relation to each other, whereas a one dollar bill will generally always be worth 1/100th of a 100 dollar bill.
dools 3y ago
I disagree with that definition of money. I don't think it actually defines what money is or what it does. I think that if you want to think of money in terms of "value" that rather than a "store" of value, it is a "record" of value. If you want to think of it as a unit of account, it has to be a state unit of account in order to actually function as money. And finally I think that the function of money as a medium of exchange is actually a side effect; that is to say that money is the most liquid asset because it is created by an obligation in common to all citizens of a sovereign entity. As such, it is the most likely medium of exchange because it is universally accepted. However, anything can be a medium of exchange. Hot rocks can be used to heat a room, but you wouldn't call a pile of hot rocks a heater. In the same way, virtually anything can be a medium of exchange, but money (by virtue of being created by the imposition of a tax liability) is the most effective medium of exchange. My definition of money is: a credit that can be used to extinguish a tax liability imposed by a sovereign. Everything else is a commodity.
kmeisthax 3y ago
Which ones? Every crypto that gets any amount of usage immediately hits up against deliberate scaling limits in the consensus mechanism[0] and stops being a useful medium of exchange. Cryptocurrency also has extreme speculative risks, which means that it's useless as a unit of account or a store of value. Fiat currencies don't have these problems[1]. Because they are instituted by a government that forces people to use it, they have a large volume of economic activity which makes it harder for the currency to swing dramatically in value. The reason why Bitcoin can fluctuate so wildly is because few actually use it like a currency, so there's nothing to buffer against market manipulators and forex speculators. [0] Because crypto needs global consensus over every satoshi in the system, all transactions need to be widely propagated to all full nodes, which imposes strict limits on how much transaction data can be processed at once. If the limits are too high then only large institutions can run full nodes which is centralizing. Of course, literally everything else in crypto is centralizing, because centralization is the gravitational force of economics. [1] No, Zimbabwe doesn't count.

nvm0n2 3y ago

I suspect Thiel has got bored with such debates at least ten years ago tbh and given his history with PayPal quite possibly 30.