Money is anything that someone is willing to exchange for goods and services in a stable and semi-predictable way (i.e. you need to be able to plan ahead at least long enough to know if what you get for your current transaction, e.g. your paycheck, will be able to buy you what you need to buy in transactions in the foreseeable future) and that is easier to store and/or exchange than actual direct bartering (good/service for good/service directly).
By that general definition most crypto currencies are not money because they are too volatile and transactions are too complicated and slow.
But that is asking the wrong question. The real question isn’t “What is money?”, the real question is “What is value?”, as in why does money have value at all, what backs that value. Money only has value because a large amount of providers of goods or services with inherent value are willing to exchange those actually valuable things for your money. And the number of those can vary over time because supply or demand for a good or service increases/decreases.
Most crypto-currencies are not equipped to deal with those fluctuations in the availability of actually valuable things by adjusting the money supply. Not to mention that the required money supply also depends on the velocity of money and how much people store away in savings and don’t touch at all.
Or in other words crypto-currencies are an incredibly primitive attempt to solve a complex problem with a solution so simplistic it is not fit for purpose.
See there is a correct answer and you even know it. I really suggest you research more on Bitcoin it is entirely different than all the other crypto and the rest of them I agree are almost entirely scams just to make money. You touched on the network effect being the real value in money. It has value just because enough people decided it has value for facilitating trade. Bitcoin does exactly what you desired in a money the only flaw I see in your logic is thinking that a good money supply adjusts itself based on supply and demand. Different products obviously would do that at different rates so it would have to attempt aggregate demand changes for everything to even attempt to maintain exact price levels. That is obviously impossible, they can not do it with dollars and they can not do it with Bitcoin either.
What bitcoin does have is an inelastic supply with zero inflation and most importantly no one is in control of it who can change that. Its value in fiat is currently wildly variable on the day to day basis but it is also very early in its network effect. It will stabilize over time. Either way it is off topic enough to this post I don’t need to talk about it anymore. I do suggest reading up on it more though. It is definitely going to take a much bigger chunk out of all the current stores of value over time and, like TCP/IP is the protocol layer of the internet with everything else built out on top of it, there is in my mind a very good chance that BTC ends up the base monetary layer in the future with more layers built on top of it to facilitate more economic purposes. But even without replacing currency the value will continue to rise, even if through nothing more than the network effect of more and more people believing it as time progresses.
Money is anything that someone is willing to exchange for goods and services in a stable and semi-predictable way (i.e. you need to be able to plan ahead at least long enough to know if what you get for your current transaction, e.g. your paycheck, will be able to buy you what you need to buy in transactions in the foreseeable future) and that is easier to store and/or exchange than actual direct bartering (good/service for good/service directly).
By that general definition most crypto currencies are not money because they are too volatile and transactions are too complicated and slow.
But that is asking the wrong question. The real question isn’t “What is money?”, the real question is “What is value?”, as in why does money have value at all, what backs that value. Money only has value because a large amount of providers of goods or services with inherent value are willing to exchange those actually valuable things for your money. And the number of those can vary over time because supply or demand for a good or service increases/decreases.
Most crypto-currencies are not equipped to deal with those fluctuations in the availability of actually valuable things by adjusting the money supply. Not to mention that the required money supply also depends on the velocity of money and how much people store away in savings and don’t touch at all.
Or in other words crypto-currencies are an incredibly primitive attempt to solve a complex problem with a solution so simplistic it is not fit for purpose.
See there is a correct answer and you even know it. I really suggest you research more on Bitcoin it is entirely different than all the other crypto and the rest of them I agree are almost entirely scams just to make money. You touched on the network effect being the real value in money. It has value just because enough people decided it has value for facilitating trade. Bitcoin does exactly what you desired in a money the only flaw I see in your logic is thinking that a good money supply adjusts itself based on supply and demand. Different products obviously would do that at different rates so it would have to attempt aggregate demand changes for everything to even attempt to maintain exact price levels. That is obviously impossible, they can not do it with dollars and they can not do it with Bitcoin either.
What bitcoin does have is an inelastic supply with zero inflation and most importantly no one is in control of it who can change that. Its value in fiat is currently wildly variable on the day to day basis but it is also very early in its network effect. It will stabilize over time. Either way it is off topic enough to this post I don’t need to talk about it anymore. I do suggest reading up on it more though. It is definitely going to take a much bigger chunk out of all the current stores of value over time and, like TCP/IP is the protocol layer of the internet with everything else built out on top of it, there is in my mind a very good chance that BTC ends up the base monetary layer in the future with more layers built on top of it to facilitate more economic purposes. But even without replacing currency the value will continue to rise, even if through nothing more than the network effect of more and more people believing it as time progresses.
Cheers.