Hacker News Reader

Comment by kaonashi | Hacker News Reader

I think the sticking point there is differences in definition of 'unit of account'. My main point is that Bitcoin is nobodies liability; this is by design. The dollar is a liability of the issuer, which can be used to extinguish tax debt.

This goes into a much larger point about the nature of money and how it evolved from ad-hoc credit arrangements.

http://www.youtube.com/watch?v=9Tks7oJkFRg http://www.youtube.com/watch?v=0zEbo8PIPSc

View on HN

Regardless of its "technical" or "economic" definition, to the layman and all its users, Bitcoin is treated, traded, and consumed as money.

The exact origins of Bitcoin do not change its utility, which is as a unit of exchange, which is what money is in its most general and flexible definition.

All true, but it does not diminish my point; that since the dawn of capitalism, money has been a balance sheet phenomenon: being simultaneously someone's asset and someone else's liability, and in this Bitcoin is different.

What about gold coins?

That seems odd - if A visits will road and buys drugs off B then A owes B one bitcoin - that is a human level contract that is clearly understood. A balance sheet accounting of this transaction would as easily be In bitcoins as dollars (A has a liability of 1 bitcoin, B has an asset)

As long as B wishes to denominate their accounts in bitcoins this is quite reasonable.

Or am I missing something ?

(Interestingly the Indian mathematician who invented negative numbers did so using accounts and debt as an example (bhagravita? 500AD)

>Or am I missing something ?

Banking.

I don't understand - why is banking meaning that I owe someone 100 bitcoins a problem? It's an unstable currency yes but the same can be said for Zimbabwean dollar

In your case, the transaction is barter, a transfer of one non-financial asset for another.

If you have a contract to provide 100 BTC, then that contract would be money, denominated in BTC (not the BTC themselves). It would exist on one balance sheet as an asset, and on another as a liability (at the same time).

This is not true of coins.

If they're stamped by the sovereign, they are. What matters is acceptance for payment of tax debt, that's what makes it the sovereign liability.

Reply on news.ycombinator.com