Comment: Simplicity

(See in situ)


Firstly, in your mathematical example, you didn't define C. Unless you meant after the equation to put "C" instead of "V". If that is the case, I kind of follow what you're saying, but would largely disagree as it wouldn't be a 1:1 ratio of value from A:C.

That aside, you're looking at this in too complicated a manner. It is very simple. Complexity of a system does not change the principles of the system. Thusly, something that wouldn't be money in the most simple system where money has value (namely a society that is at the very infancy of requiring a medium of exchange), bitcoin would not be even close to considered money. This is also true of fiat currencies. However, it is not true of gold and or other commodities that have actual use. Thus, it doesn't even pass the sniff test. In saying this, it kind of reminds me of what people were saying during the tech bubble. Someone would push a stock that had no sales, no earnings, no profit, and if you questioned them about the validity of the offering, they would just say look, they're going to go public and you'll make money (even though this was just a mania and there was no logic behind it). The phrase "we lose money on every sale but we make it up on volume" is also another phrase that comes to mind. There is literally nothing that makes sense about a bitcoin being a currency. Once again, I'm not arguing that the network might have some value, and that bitcoins might have a value if they are the only means to utilize said network; however, this does not make bitcoins money.

Once again - simplicity. Gold was desired BEFORE its use as a medium of exchange. Whether or not you believe in the likelihood of humans to desire it in the future is your belief, but it has been the case for thousands of years. To believe that without the network available for the use of bitcoins on the network, people would have a desire to keep these bitcoins somewhere in their virtual network is just folly, and thus it doesn't pass the initial test of whether or not it is money. It needs to be desirable, and thus have intrinsic value. Please explain to me how on an island with 1000 people (assuming bitcoins and gold both have the same relative scarcity) how bitcoin could be used (or would be an effectively used) as a medium of exchange. How it plays out on a larger scale will then be simple mathematics. However, if it doesn't work on that simple, smaller scale, then I can't wrap my head around the increase of complexity of the system increasing bitcoins relative value as a medium of exchange or a store of value.

By the way, this is a sincere exchange, and like I said, I don't think I'm the end all be all on understanding this... but legitimately can't wrap my head around why/how bitcoin can be money. I am still waiting to have that "aha" moment, which is legitimately alluding me. The more I think about it though, the more I become assured that bitcoin can never be considered money the same way that fiat currency is not money by definition.