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Steve Forbes: Bitcoin Not Money

Posted by Unknown on from the ron-paul-says-eat-gold dept.

MouseTheLuckyDog writes "A brief editorial by Steve Forbes, one of our moneymeisters, on why bitcoins are not money.. Hint: For those who are too lazy to read the opinion,. Bitcoins are too volatile to be money." From the article: "Money is most optimal when it is fixed in value just as commerce is facilitated when we have fixed weights and measures. When you buy a pound of hamburger you expect to get 16 ounces of meat. An hour has 60 minutes. A mile has 5280 feet. These measurements don’t 'float.' So too money best lubricates commerce when it has a fixed value."

6 of 692 comments (clear)

  1. Fiat Currency by jasonlfunk · · Score: 5, Insightful

    What what exactly is the value of the US dollar?

    1. Re:Fiat Currency by Chris+Mattern · · Score: 5, Insightful

      Money still fluctuates in value when you're on the gold standard. It just fluctuates in lockstep with the fluctuations in the value of gold. This means that it's unlikely to steadily decrease in value, but it doesn't mean it stops fluctuating.

    2. Re:Fiat Currency by Richard_at_work · · Score: 5, Insightful

      I think its useful to say that the value of a currency is really in how stable it is within an economy - once hyperinflation takes over, it doesn't matter how established the currency is, its value as money disappears (see Germany in the 1920's, Russia in the 1990's and Zimbabwe in the past decade) and people move to alternative means of payment.

      $1 today will buy me a loaf of bread. That loaf of bread might cost $1.01 tomorrow, or even $0.99, but while that's an inconvenience its not disastrous. If that loaf of bread goes from $1 one day to $5 the next, and $20 the next, then its value as actual money is gone - theres no way to establish a stable economy on such a basis because there's no way to plan for the future.

    3. Re:Fiat Currency by Anonymous Coward · · Score: 5, Insightful

      Yep, that's why keeping the gold standard was so asinine. It didn't do anything but obligate the U.S. government to hoard gold.

  2. His issue is with bitcoin's volatitilty by Shivetya · · Score: 5, Insightful

    not that their value changes, but that the changes are to volatile to make it a worthwhile currency. Its more like a commodity than anything else.

    --
    * Winners compare their achievements to their goals, losers compare theirs to that of others.
  3. Re:Say what, Steve? by chill · · Score: 5, Insightful

    Re-read the article. His point is that once a currency becomes *too* volatile it ceases being money. He doesn't say money *has* to be fixed to be useful, just that it is OPTIMAL when fixed. The *less* it fluctuates the more useful it is as a standard medium for exchange.

    "Money is most optimal when it is fixed in value..." (Emphasis mine.)

    --
    Learning HOW to think is more important than learning WHAT to think.