[Bitcoin the currency] unit is a recorded entry in a distributed ledger
I don't want you to tell me what is the record of the Bitcoin, I want you to tell me what is the actual Bitcoin.
They are different.
The record is not scarce - I can spin up 21 trillion copies of the entire blockchain.
I want you to tell me what characteristics make a good money & how fiat would fail without a way to inflate the supply.
Money is a thing you give to someone as payment.
It has to be a thing (and not an idea) otherwise you can't give it to someone (except metaphorically).
To make something better at being a thing you give to someone as payment, it can be more durable (so you don't have to give it right away), more uniform (so there's no debate about whether this unit of the thing is more or less valuable than something else) and more divisible (so if I get some number of units of the thing I don't have to spend them all at once).
"How fiat would fail without a way to inflate the money supply?"
You're confusing two different things. There is no 'money supply' of fiat. Fiat is currency. Fiat, like Bitcoin, is an attempt to settle accounts WITHOUT money. I can imagine multiple failure modes, but the most obvious is that a group of people starts using real money and other people decide they'd like to participate with the first group and receive real money rather than tokens.
OK - your turn. What is Bitcoin [the scarce valuable currency unit]? It can't be a computer record or computer code or cryptographic signature because any of those can be copied infinitely without losing the original (because they are patterns rather than actual entities and a pattern can be copied).
Well, you can transfer full exclusive control of the digital units on the bitcoin network.
Trying to separate "money" & "currency" is nonsense.
Currency is debt. Money extinguishes debt.
What are the digital units on the bitcoin network?
Do they exist in any real sense at all?
Or are they just as fictional as Sherlock Holmes?
I still think the distiction is retarded. Debt is debt. But maybe we can agree that with a money, work has to be done upfront to produce it... Like the costs associated with mining bitcoin or gold.
No I don't agree to that at all.
If I'm lying on the river bank catching fish and a gold nugget happens to wash into my pocket it's no more or less money than an equivalent gold nugget mined from an asteroid.
Bitcoiners often default to a labor theory of value or energy theory of value, both of which are absurd. Value is subjective (meaning it relates to the subject, not that I just make up whatever I want). I value an additional unit of a good equivalent to the highest-valued new use to which I can put that good.
It's not a labor theory of value at all. There is no specific amount of work that has to be done. You could run mining software on your phone for 5 minutes and find a block which rewards you with bitcoin. It just generally requires more effort than that to acquire scarce things. If gold was just freely available it would not be money.
Yes, scarcity is a requirement for something to have economic value.
That does not mean that work has to be done or that the scarce thing derives its value from the work done to obtain it. Those are fallacies.
I agree that making up records of new Bitcoin units is expensive. So is digging a hole and filling it back up. If I could prove that I had dug a hole of a certain size and filled it back up, would that receipt be a candidate to use as a money unit?
If the only way to reverse the transaction history is to do more work than was done to record the history in the first place then the setrlement assurances provided are a function of the cost of the work done.
settlement of what?
it's easy to build a better mousetrap when the mice are all in your head
Money is valuable because it can facilitate trade. It has nothing to do with how tagible it is. Gold's tangibility has nothing to do with it's value as money. All other metals would be money too if tangibility had anything to do with it. Tangibility actually makes it worse at being money in a digital economy.
But the reality is that none of this bullshit matters. Bitcoin is going to keep working & keep being money whether you understand or agree or not.
