License to print money... BitCoin?

Bitcoins fal 15 percent on news of US Treasury rule change.

Bitcoins are not money, they are a collectible,
like stamps or baseball cards. They have value
because of their scarcity. Money is something
you can produce more of anytime you want,
bitcoins are frozen in place. New ones come
out slower than glaciers move.

Quote: Evenbob

Bitcoins are not money, they are a collectible, like stamps or baseball cards. They have value because of their scarcity. Money is something
you can produce more of anytime you want, bitcoins are frozen in place. New ones come out slower than glaciers move.

Money, both cash and electronic money, fulfilis three functions.
Firstly, it is a means of payment, which means that a monetary value is transferred to the recipient when money is handed over.

Secondly, it forms a unit of account, in Sweden this unit is krona and öre and in the United Kingdom it is pounds and pence, and so on. With a common unit of account, we all measure the value of goods in the same way, which makes it easier to compare the price or value of different goods.

Thirdly, money is a store of value, which means that we can save by holding cash or money in bank accounts and thereby redistribute consumption from one day to another date in the future.


Bitcoins cannot be arbitrary increased, but they are divisible to 8 decimal places. Bitcoins can grow to many times their original value expressed in dollars. While it is true that a dollar could purchase 3 Mexican pesos from 1970, and has increased in value so that it could purchase 7000 old pesos today, there are practical limits as to how much one major currency can increase in value relative to other major currencies. If the dollar should grow too strong like it did in 1985, then the world bankers will get together at a hotel and conspire to bring it's value down.

The limitations on the number of bitcoins are offset by the fact that a bitcoin could be worth $20,000 in a few years.

Quote: Pacomartin

The limitations on the number of bitcoins are offset by the fact that a bitcoin could be worth $20,000 in a few years.

So could any number of collectibles, like
rock star guitars and Superbowl rings.
Will we be using that as money too some
day?

Quote: Evenbob

So could any number of collectibles,...

There is no doubt that collectibles fulfill many of the same basic qualifications as money. In 2001 many Europeans were in a rush to convert cash in national currencies into collectibles because they didn't want to take it to a bank and have to explain where it came from. The markets in antiques and paintings surged.

But blockchain technology (which underlies bitcoins) is being explored by many nations, with Sweden first in line, as a means to replace or at least augment banknotes and coins. IMHO that makes it more like money than paintings.

So far, these national digital currencies will not be any more or less free to increase in value than the national currency at present.

Austria opened the first bitcoin bank.

Quote: Pacomartin

Austria opened the first bitcoin bank.

Good grief..

Venezuela... Playing Cards as currency.
A few parts of a bit coin are said to 'color' a trading card of Pepe The Frog, a cartoon character.
The opposition political party supports the concept since there really is no alternative currency in Venezuela.

/.

Quote: Fleastiff

Venezuela... Playing Cards as currency.

The 10,000 Singapore Dollar banknote is worth US$7,0000. It is not being produced any more, but the old notes are not demonetized. It is easily the most valuable banknote in the world.


At the official exchange rate the 50,000 Venezuelan Bolivar banknote is worth US$5,000 which would make it the second most valuable banknote in the world. At black market you would be lucky to get US$50.


The most valuable banknote in the world in active production is the Swiss 1000 franc banknote worth roughly US$1000. A bitcoin is presently worth $950.

Bitcoins are legal tender in Japan... legal for all debts public and private, not just taxes.