(quoted post by epaulson)
There has been a lot of debate about what Bitcoins are — i.e. currency vs. commodity. Also there has been a lot of debate about inflation vs. deflation with respect to Bitcoins, whether people would lend them, at what rates, etc.
I think the most apt description of Bitcoins is that they are shares of stock in this communal Bitcoin enterprise we are undertaking. It is a lot like being part of a company (right now a very small company) and being paid in stock shares. There are a fixed number of Bitcoins, as there are a fixed number of shares in a company (barring new issues/etc.).
The primary value of Bitcoins right now is the hope that they will someday be worth significantly more than they are right now. For that to happen, the Bitcoin enterprise as a whole needs to gain collective value. We, as employee/owners of Bitcoin need to generate that added value. The most obvious way is to facilitate internet commerce by bartering shares of Bitcoin for other goods. The collective computational effort of all the employee/owners helps ensure that the barter is fair by keeping a record of each transaction. The individual efforts of some Bitcoiners are helping to make the barter of Bitcoins easier or more useful.
Regarding lending/borrowing of Bitcoins, to me it is analogous to lending/borrowing stock. The primary reason to borrow Bitcoins would be because you think they are overvalued and will be worth less when you have to return them. When you borrow the Bitcoins, you can sell them now (barter them now) and hopefully it will cost you less to buy them back at a later date so that you can return them to your lender (probably plus a fee).
In essence, Bitcoins are like a “direct public offering” of stock in the Bitcoin enterprise.
Quote from: epaulson on August 17, 2010, 06:45:18 PM
I think the most apt description of Bitcoins is that they are shares of stock in this communal Bitcoin enterprise we are undertaking.
I’d like to submit that I think the most apt description of bitcoin is that it is most like a Global Exchange Trading System (GETS) which is a variation on the LETS concept that isn’t for hippies.
Descriptively it differs because it’s community is loosely knit and global rather than an intertwined small-town. As such, there can be no commonly trusted party to operate and monitor the system, so that function is trusted to redundancy and mathematics. (block list)
LETS communities can rely on “local knowledge” of peoples historical behavior and intentions. As such it is perfectly reasonable for them to advance credit to people (negative balances) in certain situations. In a GETS community advanced knowledge of all parties and intentions is not practical or even preferred. As such, GETS operates on a zero credit policy. (no negative balances)
Also, since GETS trade globally, there is no “national currency” that can be used for equivalence. As such, GETS defines it’s own unit for accounting purposes. Since this currency must necessarily vary against some national currencies, the LETS strict “no interest” principle cannot be preserved.
I think if people understood LETS they would intuitively understand GETS. The rest of the bitcoin details are just one possible GETS monetary policy.
Quote from: Red on August 18, 2010, 04:02:10 PM
… since GETS trade globally, there is no “national currency” that can be used for equivalence. As such, GETS defines it’s own unit “for accounting purposes”. Since this currency must necessarily vary against some national currencies, the LETS strict “no interest” principle cannot be preserved.
I think if people understood LETS they would intuitively understand GETS. The rest of the bitcoin details are just one possible GETS monetary policy.
Has anyone noticed that the FRN is exactly that, “it’s own unit for accounting purposes”?
The lawful United States dollar is defined in law as 371 4/16th grains of silver. This has been slightly modified, but never repealed. The “dollar” is actually a unit of measure, you can look it up. Bet they didn’t tell you that in school!
The Federal Reserve Note is “denominated in dollars”, or as Red above states, they have defined their own unit for accounting purposes. Write the Fed a letter, press them on the subject. The will reply that the FRN is “backed by the full faith and credit of the U.S. government.” What they won’t admit is that the FRN is NOT a U.S. dollar as defined in law. It is “denominated” as one only because you agree to the terms in commercial contract.
Why did we take this little tour? Because it illustrates that we can define our terms. And that it is foolish to use their terms — money, cash, dollar, currency, and a crapload of others.
Quote from: fresno on August 19, 2010, 05:40:46 PM
Has anyone noticed that the FRN is exactly that, “it’s own unit for accounting purposes”?
The lawful United States dollar is defined in law as 371 4/16th grains of silver. This has been slightly modified, but never repealed. The “dollar” is actually a unit of measure, you can look it up. Bet they didn’t tell you that in school!
The Federal Reserve Note is “denominated in dollars”, or as Red above states, they have defined their own unit for accounting purposes. Write the Fed a letter, press them on the subject. The will reply that the FRN is “backed by the full faith and credit of the U.S. government.” What they won’t admit is that the FRN is NOT a U.S. dollar as defined in law. It is “denominated” as one only because you agree to the terms in commercial contract.
Why did we take this little tour? Because it illustrates that we can define our terms. And that it is foolish to use their terms — money, cash, dollar, currency, and a crapload of others.
I thought that it proved that we can use whatever words we want and define them however we want and just because ‘they’ use the word ‘dollar’ to mean something does not mean we can use a word spelled the same way to mean something completely different.
Quote from: fresno on August 19, 2010, 05:40:46 PM
Why did we take this little tour? Because it illustrates that we can define our terms. And that it is foolish to use their terms — money, cash, dollar, currency, and a crapload of others.
So, fresno, do you consider “GETS” to be one of “their terms”?
If so, please share your preferred term for Bitcoin. I have read your comment that you already did, and I’m too lazy to find it. Please indulge me Smiley
Quote from: Insti on August 19, 2010, 06:46:04 PM
I thought that it proved that we can use whatever words we want and define them however we want and just because ‘they’ use the word ‘dollar’ to mean something does not mean we can use a word spelled the same way to mean something completely different.
Yes, we can in theory. But do we have the organization to defend our terms? Do we even agree on what those terms might be?
We have anonymity, and we’re below their radar at the moment. But that will change as soon as they see us as a threat. If you haven’t seen the wheels of justice grinding in all their hypocritical glory, you are ripe for an amazement. Any appeals to “fairness” are going to get you slapped down hard.
I say the best way not to get shot at is to not be a target, and certainly not to donate the ammo. Don’t claim to be money. It’s that easy.
ichi: Why should I do your work for you? If you want to argue, then bring something to the table.
Quote from: fresno on August 19, 2010, 09:13:34 PM
I say the best way not to get shot at is to not be a target, and certainly not to donate the ammo. Don’t claim to be money. It’s that easy.
I can’t imagine that governments would ignore Bitcoin just because it didn’t claim to be money. It’s the fact that it can anonymously mediate exchanges (including exchanges with currencies) that makes it a threat.
The solution, IMHO, is careful design and implementation, not semantics (or pleading).
Quote from: fresno on August 19, 2010, 09:13:34 PM
ichi: Why should I do your work for you? If you want to argue, then bring something to the table.
OK, would one of y’all be so kind as to post a forum URL for the prior proposal?
Re anonymity, many Bitcoin users seem far too unconcerned, IMHO.
Bitcoins have no dividend or potential future dividend, therefore not like a stock.
More like a collectible or commodity.