Apologies for yet another Bitcoin thread, but I didn't want to distract the other threads with this point.
Historically there have been two types of money, money with its own intrinsic value and money with no intrinsic value.
So if a tin of beans or a packet of cigarette is used for payment, that is money with an intrinsic value.
Paper money, or fiat money has no intrinsic value.
It acquires value because it is accepted as a means of payment. In the immediate sense this is because people have confidence in the value of the paper Euro.
Behind that confidence however lies the fact that it is legal tender. Government will accept Euro in payment of tax and the bank is legally obliged to accept Euro in payment for my mortgage.
The blockchain technology behind bitcoin may give it advantages in terms of security and more dubiously in terms of anonymity. However that to my mind is not the distinguishing aspect of bitcoin. After all a visa debit is reasonably secure with minimal precaution and anonymity largely facilitates criminals. Also a €50 note is fairly anonymous.
The major difference between Bitcoin and fiat currency is that there are just 21 million bitcoin in existence. This is an interesting concept and means that inflation cannot occur, at least in the traditional, print more money way.
Is bitcoin money. Today no, it cannot be used to pay all debts. When loans are issued in bitcoin that can be repaid in bitcoin then it might be considered money.
Historically there have been two types of money, money with its own intrinsic value and money with no intrinsic value.
So if a tin of beans or a packet of cigarette is used for payment, that is money with an intrinsic value.
Paper money, or fiat money has no intrinsic value.
It acquires value because it is accepted as a means of payment. In the immediate sense this is because people have confidence in the value of the paper Euro.
Behind that confidence however lies the fact that it is legal tender. Government will accept Euro in payment of tax and the bank is legally obliged to accept Euro in payment for my mortgage.
The blockchain technology behind bitcoin may give it advantages in terms of security and more dubiously in terms of anonymity. However that to my mind is not the distinguishing aspect of bitcoin. After all a visa debit is reasonably secure with minimal precaution and anonymity largely facilitates criminals. Also a €50 note is fairly anonymous.
The major difference between Bitcoin and fiat currency is that there are just 21 million bitcoin in existence. This is an interesting concept and means that inflation cannot occur, at least in the traditional, print more money way.
Is bitcoin money. Today no, it cannot be used to pay all debts. When loans are issued in bitcoin that can be repaid in bitcoin then it might be considered money.