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Bitcoin is a currency. Shouldn't we be more interested in the number purchases made with it instead of the current exchange value?

by johnrob 13y ago

phaed 13y ago
Not yet.
craigyk 13y ago
Yup, despite what it's advocates say, it sure isn't behaving like a currency. Major requirement of currency: very-low volatility.
- applecore 13y ago
  There are a number of currencies that experienced ridiculous levels of hyperinflation over the years. When is a currency a currency? Until it isn't?
  - Jtsummers 13y ago
    Many currencies lack stability (meaning some low % inflation/deflation(?)). I think it would be reasonable to contend that almost anything could be a currency or used as one, but stability makes for more effective currencies. While the value of BTC vs USD (or other established currencies) continues to explode, it makes it more difficult to use as a currency proper (rather than as a commodity/investment). If you have 10 BTC, it'd be difficult to spend 0.05 BTC (over 30 USD now) on a good (not a necessity) when it seems like in a week you could spend 0.03 BTC for the same thing.
    - craigyk 13y ago
      yes, I left out the 'effective' adjective. Or I should have put currency in sarcastic quotes.
exit 13y ago
is it a currency? is it a commodity? it may be something new which doesn't fit into existing categories.
ISL 13y ago
It's a thing. At the moment, some people are willing to trade ~600 cheeseburgers for one of them.
a3voices 13y ago
It's more like gold than a typical currency, due to its scarcity (20 million Bitcoins will be mined ever).
VLM 13y ago
Transfers. The overall transfer market utilizes 100 BTC (made up) and the overall transfer market at any given instant is worth $65000 (made up) therefore the average price on the transfer market is $650, although that doesn't mean anything to anyone in the transfer market. If the price collapsed to $10 tomorrow, then the international transfer market would still be worth $65000 at any given instant (duh, unless world trade collapses), it would just require 6500 BTC instead of 100 BTC. If the market can't provide 6500 BTC at $10 (I don't think it can..) then the market clearing price will rise until the transfer market obtains its average $65000. The buy and hold and the pump and dump crowds get all confused about what it means. The current exchange value on the open market has to remain constant-ish for months because of middlemen. So I ordered a Debian branded swiss army knife and the whole transaction must have taken months, I'd be pretty pissed if the exchange rate from $ to swiss francs or whatever it was varied much. On the other hand as a replacement for Western Union to send cash to Mexico or whatever, I guess the value needs to remain constant for what, like 10 minutes?

Bitcoin is a currency. Shouldn't we be more interested in the number purchases made with it instead of the current exchange value?

by johnrob 13y ago

Bitcoin is a currency. Shouldn't we be more interested in the number purchases made with it instead of the current exchange value?

phaed 13y ago

Not yet.

craigyk 13y ago

Yup, despite what it's advocates say, it sure isn't behaving like a currency. Major requirement of currency: very-low volatility.

applecore 13y ago
There are a number of currencies that experienced ridiculous levels of hyperinflation over the years. When is a currency a currency? Until it isn't?
- Jtsummers 13y ago
  Many currencies lack stability (meaning some low % inflation/deflation(?)). I think it would be reasonable to contend that almost anything could be a currency or used as one, but stability makes for more effective currencies. While the value of BTC vs USD (or other established currencies) continues to explode, it makes it more difficult to use as a currency proper (rather than as a commodity/investment). If you have 10 BTC, it'd be difficult to spend 0.05 BTC (over 30 USD now) on a good (not a necessity) when it seems like in a week you could spend 0.03 BTC for the same thing.
  - craigyk 13y ago
    yes, I left out the 'effective' adjective. Or I should have put currency in sarcastic quotes.

exit 13y ago

is it a currency? is it a commodity? it may be something new which doesn't fit into existing categories.

ISL 13y ago

It's a thing. At the moment, some people are willing to trade ~600 cheeseburgers for one of them.

a3voices 13y ago

It's more like gold than a typical currency, due to its scarcity (20 million Bitcoins will be mined ever).

VLM 13y ago

Transfers. The overall transfer market utilizes 100 BTC (made up) and the overall transfer market at any given instant is worth $65000 (made up) therefore the average price on the transfer market is $650, although that doesn't mean anything to anyone in the transfer market. If the price collapsed to $10 tomorrow, then the international transfer market would still be worth $65000 at any given instant (duh, unless world trade collapses), it would just require 6500 BTC instead of 100 BTC. If the market can't provide 6500 BTC at $10 (I don't think it can..) then the market clearing price will rise until the transfer market obtains its average $65000. The buy and hold and the pump and dump crowds get all confused about what it means. The current exchange value on the open market has to remain constant-ish for months because of middlemen. So I ordered a Debian branded swiss army knife and the whole transaction must have taken months, I'd be pretty pissed if the exchange rate from $ to swiss francs or whatever it was varied much. On the other hand as a replacement for Western Union to send cash to Mexico or whatever, I guess the value needs to remain constant for what, like 10 minutes?