On Jun 10, 2011, at 10:16 55PM, John Levine wrote:

In article <021CCBA9-9203-4896-8412-481B94595B20@cs.columbia.edu> you write:

...

http://gcn.com/articles/2011/06/09/bitcoins-digital-currency-silk-road-charl...

I wouldn't call bitcoins digital cash. They're more like digital tulip bulbs, or bearer shares of theglobe.com.

Whatever they are, it's a self limiting problem since the bubble will burst soon enough.

My point in posting the item to this list was not to discuss whether or not bitcoins are real digital cash, but to note that the technology has now been publicly mentioned at the policy level. But is it cash? When my son was four years old, he asked me why a dollar bill was worth a dollar. He didn't like my answer, even though it was absolutely correct: "because we all agree that it is". If you can buy things with it, it's money, unless it has some intrinsic utility of its own; if it does have intrinsic value, it's a barter transaction. Calling it "digital tulip bulbs" is a way of saying that bitcoins are not a very stable currency; with that I have no quarrel. (Don't get me started on the gold standard (I shouldn't even add this note). But I do suggest you read the (very brief) description in Steinberg's new biography "Bismarck: A Life" of the economic woes the gold standard caused in late 19th century Prussia and the other states of the Reich .) --Steve Bellovin, https://www.cs.columbia.edu/~smb _______________________________________________ cryptography mailing list cryptography@randombit.net http://lists.randombit.net/mailman/listinfo/cryptography ----- End forwarded message ----- -- Eugen* Leitl <a href="http://leitl.org">leitl</a> http://leitl.org ______________________________________________________________ ICBM: 48.07100, 11.36820 http://www.ativel.com http://postbiota.org 8B29F6BE: 099D 78BA 2FD3 B014 B08A 7779 75B0 2443 8B29 F6BE