Armstrong Economics Blog/Cryptocurrency
Re-Posted Dec 16, 2017 by Martin Armstrong
QUESTION: I read your article on Bitcoin. I found it fascinating that defining what it is changes everything. You did not actually say what you thought it was, money, stock, or a commodity. Curious as to what you would classify Bitcoin as.
All the best
ANSWER: The definitions I presented are from the government perspective of taxation. They will naturally define it to be whatever produces the greatest tax for themselves.
Economically speaking, anything that can be exchanged to facilitate a barter transaction becomes a MEDIUM OF EXCHANGE. That really can be anything. It has been food, sheepskins, seashells, cattle, bronze, silver, gold, or a derivative of something as paper money began.
Pictured here is a bronze ingot of the Minoan society. It is bronze cast in the form of a sheepskin. This reflects the transition from sheepskin to the Bronze Age. Above is a Roman ingot with the picture of a bull, which also reflects that this was a transition for cattle that was money previously.
Cryptocurrency is the next transition from tangible items being used for money moving toward electronic. It is a Medium of Exchange and that makes it really a currency and not the object itself of desire. Money will always exist in different forms because humans are not all equal in motivation, only human rights and that depends if the government has something to gain then you have no rights at all at that moment.