History of money, 20th century and earlier

[Bomb#20]

* The special case of gold mining communities during gold rushes, when gold might have been used at a tavern to by drinks at a ruinous rate of exchange notwithstanding. Barmen ripping off drunken miners wasn't exactly a complete national economy, even except in Australia.

FIFY.

 

[Bomb#20]

OK, try this thougt experiment.

Civilisation has collapsed. I have a store of tinned food, and you have a load of gold bars....

...
Here's a fact that might be of interest to YOU. (It's irrelevant to my thread; I'm dismissing the tangent you're on.) The price of gold remained at $35/ounce for about 35 years. It was when it CEASED to be money that the price of gold shot up! Is that compatible with a notion that its ONLY value was its use as money?

By "when it CEASED to be money" you are referring to the moment when the fixed exchange rate was abolished; whether that constitutes "ceased to be money" is in dispute and you don't get to rely on that assumption without proving it.

Here's a fact that might be of interest to you. The price of a deutschmark remained at about 36 pence during the latter part of the Exchange Rate Mechanism. It was when the fixed exchange rate was abolished in Britain that the price of a deutschmark shot up. Is that compatible with a notion that its ONLY value was its use as money?

Hint:

Show

Yes. Duh.

 

[Bomb#20]

I do NOT understand the confusion.

When you accept a U.S. banknote it is imprinted as "Legal tender for all debts public and private." You needn't worry whether the paper is worth a dollar. A government has guaranteed its value.

And what is that worth, the promise of a government? You're very funny, Highness.

What's your point??
Did I say or imply that government- or bank-created money was certain of its nominal value? No, just the opposite.

Did I say "certain"? My point, obviously, is that your "You needn't worry" claims about those two types of money were incorrect. If you equate them with "certain", that's on you.

There would hardly be point in distinguishing intrinsic-worth money from bank-created money if the latter had a definite value.

That's a circular argument. You haven't shown there is a point in distinguishing so-called "intrinsic-worth money" from bank-created money.

Oh, nitpicking galore. One will seize on the word "guarantee." A guarantee is no better than the guarantor. If this is the Gotcha you're ranting about all I can say is STIFLE! You're just eager to belittle Swammi's writing on any grounds. That is very UNBECOMING.

Most of your post was empty abuse like that; I've adequately ridiculed it upthread so here I'm just going to ignore what you said that was non-substantive and/or pointlessly repetitive.

[snip]

Oh, it looks like that was the rest of your post.

This whole sub-exchange happened after I asked you a question back in post #27:

Would you claim a bitcoin has "intrinsic value"?

[crickets]

Does a bitcoin have "intrinsic value"?

 

[Swammerdami]

I've added some emphasis to illustrate the futility of this whole hijacking.

OK, try this thougt experiment.

Civilisation has collapsed. I have a store of tinned food, and you have a load of gold bars....

...
Here's a fact that might be of interest to YOU. (It's irrelevant to my thread; I'm dismissing the tangent you're on.) The price of gold remained at $35/ounce for about 35 years. It was when it CEASED to be money that the price of gold shot up! Is that compatible with a notion that its ONLY value was its use as money?

By "when it CEASED to be money" you are referring to the moment when the fixed exchange rate was abolished; whether that constitutes "ceased to be money" is in dispute and you don't get to rely on that assumption without proving it.

In OP I defined "money." This is a close synonym of "cash money" and denotes items of money which are actually in common use as means of exchange. This is NOT the same as "store of wealth."

Here's a fact that might be of interest to you. The price of a deutschmark remained at about 36 pence during the latter part of the Exchange Rate Mechanism. It was when the fixed exchange rate was abolished in Britain that the price of a deutschmark shot up. Is that compatible with a notion that its ONLY value was its use as money?

Hint:

Show

Yes. Duh.

I've added some emphasis to illustrate the futility of this whole hijacking.

 

[Swammerdami]

I do NOT understand the confusion.

When you accept a U.S. banknote it is imprinted as "Legal tender for all debts public and private." You needn't worry whether the paper is worth a dollar. A government has guaranteed its value.

And what is that worth, the promise of a government? You're very funny, Highness.

What's your point??
Did I say or imply that government- or bank-created money was certain of its nominal value? No, just the opposite.

Did I say "certain"? My point, obviously, is that your "You needn't worry" claims about those two types of money were incorrect. If you equate them with "certain", that's on you.

There would hardly be point in distinguishing intrinsic-worth money from bank-created money

[/B][/I]

if the latter had a definite value.

That's a circular argument. You haven't shown there is a point in distinguishing so-called "intrinsic-worth money" from bank-created money.

What prompts the whole discussion is interest in different monetary methods in the past and future. This thread discusses what's been tried in the past.
Do you not agree that precious-metal money and bank-created money have different definitions, natures, effects? Eventually we might want to look at Bretton-Woods, etc. in detail, but others have picked a very different thread direction.

My use of the term "intrinsic-wealth money" seems to have triggered much irritation. Would trouble have been avoided if I used lpetrich's term "commodity-money"?

Oh, nitpicking galore. One will seize on the word "guarantee." A guarantee is no better than the guarantor. If this is the Gotcha you're ranting about all I can say is STIFLE! You're just eager to belittle Swammi's writing on any grounds. That is very UNBECOMING.

Most of your post was empty abuse like that; I've adequately ridiculed it upthread so here I'm just going to ignore what you said that was non-substantive and/or pointlessly repetitive.

Quite to the contrary. I was responding to a complaint that made no sense UNLESS I assumed the poster was using the word "guarantee" in a different sense than I and Merriam-Webster do.

[snip]

Oh, it looks like that was the rest of your post.

This whole sub-exchange happened after I asked you a question back in post #27:

Would you claim a bitcoin has "intrinsic value"?

[crickets]

Does a bitcoin have "intrinsic value"?

Good question. Answers of Yes, No and Maybe are all valid!

One major difference with barley, gold, silver etc is that these commodities will trade in a very narrow price range relative to other goods. Historically Bitcoin has been much more erratic. BUT nowhere does the "intrinsic-worth" criterion insist on price stability.

People who access their Bitcoins via an exchange are using bank-created money of course, but what about the underlying monetary base? It MIGHT be viewed as any of the three types we've mentioned: intrinsic, bank-created, fiat. Simplest I think will be new categor(ies): "Hybrid and other moneys." This why I added "20th century and earlier" to the title!

Thank you, Mr. Bomb#20 for assuming a more respectful tone.

 

[Bomb#20]

I've added some emphasis to illustrate the futility of this whole hijacking.

Civilisation has collapsed. I have a store of tinned food, and you have a load of gold bars....

...
Here's a fact that might be of interest to YOU. (It's irrelevant to my thread; I'm dismissing the tangent you're on.) The price of gold remained at $35/ounce for about 35 years. It was when it CEASED to be money that the price of gold shot up! Is that compatible with a notion that its ONLY value was its use as money?

By "when it CEASED to be money" you are referring to the moment when the fixed exchange rate was abolished; whether that constitutes "ceased to be money" is in dispute and you don't get to rely on that assumption without proving it.

In OP I defined "money." This is a close synonym of "cash money" and denotes items of money which are actually in common use as means of exchange. This is NOT the same as "store of wealth."

If by "money" you mean "cash money" then your claim "It was when it CEASED to be money that the price of gold shot up!" is incorrect. It shot up in 1971; it ceased to be cash money in 1933.

 

[Swammerdami]

Bimetallism (simultaneous use of gold AND silver as money) was the norm for centuries, and was famously touted by W.J. Bryan complaining about "the cross of gold." Ending silver's use as money, with much higher supplies than gold, may have hastened the collapse of the gold standard.

Even if bimetallism itself is of no interest, Bimetallism Revisited may give insight into precious-metal money.

Far from being a thoroughly discredited fallacy, bimetallism has much to recommend it on theoretical, practical, and historical grounds as superior to monometallism, though not to symmetallism, or to a tabular standard. Indeed, twentieth-century technological developments have undermined many of the practical considerations that were cited against it during the nineteenth century. In particular, the wider use of deposits and of paper money have rendered almost irrelevant Jevons's concern about the weight of silver compared with gold, as well as the concern of many participants that a bimetallic standard might involve extensive recoinage from time to time. On the other hand, the reduction in the use of coins has undoubtedly weakened the "hard-money" myth that only specie is "real" money.

 

[Swammerdami]

If by "money" you mean "cash money" then your claim "It was when it CEASED to be money that the price of gold shot up!" is incorrect. It shot up in 1971; it ceased to be cash money in 1933.

YES except that there were "agreements" in place for the U.S. to maintain a $35 gold price, while other countries used the U.S. dollar as the measure of monetary value. In other words, even though the precious-metal money did not circulate, it was the BASE from which bank-created money was denominated. (As late as 1964 the London gold market priced gold at $35.09.)

This leads to the notion of intrinsic-worth money which doesn't circulate but which implicitly backs bank-created money.

 

[bilby]

... The ownership of a large stone, which would be too difficult to move, was established by its history as recorded in oral tradition rather than by its location. Appending a transfer to the oral history of the stone thus effected a change of ownership.[3]
... Thus the physical location of a stone was often not significant: ownership was established by shared agreement and could be transferred even without physical access to the stone. Each large stone had an oral history that included the names of previous owners. ...

Oh my god, the Yapese invented blockchain!

They put the 'block' into blockchain.

 

[bilby]

Do you not agree that precious-metal money and bank-created money have different definitions, natures, effects?

I don't grasp how you can remain unaware at this point that several people here do not agree on this, and that you therefore need to demonstrate it to be true, rather than demand that we accept it to be axiomatic.

You are introducing these two terms; But you refuse to explain how they are different in any substantive, important or significant way, and people are telling you that it is not obvious, despite your belief that it must be.

Explain it to us. In ways that don't include circular logic, internal contradictions, or conclusions that are refuted by observation of historical events and practices. If your only explanations are either fallacious, incorrect, or appeals to obviousness, then your distinction is probably arbitrary and useless. If it's fundamental and useful, you shouldn't have much problem explaining how and why.

 

[bilby]

This leads to the notion of intrinsic-worth money which doesn't circulate but which implicitly backs bank-created money.

Sure, but that is just pegging. It doesn't render the base currency "intrinsically valuable"; Pegging the dollar to gold makes gold intrinsically valuable in exactly the same way that pegging the French Polynesian Dollar to the euro makes the euro intrinsically valuable - ie not at all.

 

[Swammerdami]

Do you not agree that precious-metal money and bank-created money have different definitions, natures, effects?

You are introducing these two terms; But you refuse to explain how they are different in any substantive, important or significant way, and people are telling you that it is not obvious, despite your belief that it must be.

The availability of gold or silver is subject to mining production, while the supply of bank-created money is subject to consumer and business habits (a bank creates more money when people deposit coins rather than hoarding) and "fractional reserve ratios." The increasing use of paper money and checkbooks in the 18th and 19th centuries increased the supply of money and that had various implications. The evolution from a "most money is precious metal" phase to a "most money is bank-created" phase was a significant fact in economic history. (Bank-created money provides income to financeers. Since the early banks were not subject to a governmental regulator this money creation may almost seem like grift!) Reviewing this MIGHT help us evaluate prescriptions for 21st century money.

Explain it to us. In ways that don't include circular logic, internal contradictions, or conclusions that are refuted by observation of historical events and practices. If your only explanations are either fallacious, incorrect, or appeals to obviousness, then your distinction is probably arbitrary and useless. If it's fundamental and useful, you shouldn't have much problem explaining how and why.

Did the above paragraph help? If you catch even a glimmer of the point, perhaps we can work together to produce a more useful paragraph.

 

[bilby]

Do you not agree that precious-metal money and bank-created money have different definitions, natures, effects?

You are introducing these two terms; But you refuse to explain how they are different in any substantive, important or significant way, and people are telling you that it is not obvious, despite your belief that it must be.

The availability of gold or silver is subject to mining production, while the supply of bank-created money is subject to consumer and business habits (a bank creates more money when people deposit coins rather than hoarding) and "fractional reserve ratios." The increasing use of paper money and checkbooks in the 18th and 19th centuries increased the supply of money and that had various implications. The evolution from a "most money is precious metal" phase to a "most money is bank-created" phase was a significant fact in economic history. (Bank-created money provides income to financeers. Since the early banks were not subject to a governmental regulator this money creation may almost seem like grift!) Reviewing this MIGHT help us evaluate prescriptions for 21st century money.

Explain it to us. In ways that don't include circular logic, internal contradictions, or conclusions that are refuted by observation of historical events and practices. If your only explanations are either fallacious, incorrect, or appeals to obviousness, then your distinction is probably arbitrary and useless. If it's fundamental and useful, you shouldn't have much problem explaining how and why.

Did the above paragraph help? If you catch even a glimmer of the point, perhaps we can work together to produce a more useful paragraph.

It suggests that you are either reinventing the wheel, or (less charitably) attempting to muddy the waters, by your use of "intrinsic value money" to mean nothing more nor less than "commodity money".

"Commodity money" is exactly what it says on the tin - the use of a commodity as money. It says nothing about value, much less "intrinsic" value.

If your objective was only to discuss the differences between commodity money, fiduciary money, and fiat money, then by introducing the spurious and divisive term "intrinsic value" you have not only disrupted your own objective, but have also lowered the trust of your audience in your understanding of the topic.

"Bank created money" sounds like a shortening of one or both of the existing concepts "Money in the form of promissary notes" or "Money generated by fractional reserve banking"; Your apparent assumption that your audience are either unaware of these concepts at all, or that, being aware of it, they must share your beliefs that they are morally questionable, of negative net utility, and/or novel, is unwarranted.

One of the earliest ways to resolve the big problem of commodity money - that you need the commodity itself, here and now, in order to use it in any transaction - was to generate alternative tokens, IOUs, that stood in for the commodity. As such, what you call "bank created money" is just "money", and differs from "commodity money" in that it separates the two elements, allowing the commodity to sit idly in a strongroom or bankvault or treasure chest, while the money part is used in transactions via the medium of clay tablets, or bits of paper, or other media, with agreed mappings to specified quantities of whatever commodity they are hypothetically pegged to.

Money is an independent concept. Attaching it to a commodity is possible, and was until fairly recently, fairly commonplace (though it's been several millennia since it was mandatory and exclusively the case, if it ever was). But that doesn't imply that "value" is some kind of intrinsic property of any commodity (or commodities) chosen to be 'commodity money'.

If all you are trying to say is "Gold isn't useful for very much, and is fairly uncommon, and so makes a good choice of commodity for people who want commodity money", then you won't get any argument from me.

 

[lpetrich]

Bimetallism? How is that supposed to work? I ask that because its two metals are likely to have varying relative prices.

 

[Swammerdami]

The history of money is one topic on which I am rather well-informed. I am sorry if my writings are confusing.

@lpetrich -- Do you find some of my writing here confusing? If so, please call attention to specific sentences or paragraphs and help me tune my writing. Thank you.

Part of the "value" I bring to this thread, I think, are links. I posted an image of a page from the Lopez-Raymond book which gives a "hands-on" glimpse of bank-created money in late Medieval Italy.

And I linked to a paper by Milton Friedman. The topic was bimetallism, but the paper should offer insights to precious-metal money more generally.

I have used "intrinsic-worth money" for gold and silver coins, while you use the term "commodity-money." (Actually you write "commodity-based money" which might include bank-created money denominated in a commodity.) Did my terminology annoy or confuse you, @lpetrich ?

Bimetallism? How is that supposed to work? I ask that because its two metals are likely to have varying relative prices.

Good question! And it is a question which Milton Friedman addresses in the paper I linked to.

In fact, the gold-to-silver price ratio remained nearly constant throughout the many centuries where Europe used both metals for money. In the late 1800's countries abandoned the silver standard and the price of silver began to fall. (Which was cause and which effect? Discovery of large silver deposits in places like Nevada and Chile was of course a major cause.)

Friedman discusses this and, I think, implies that the deflationary crisis of 1930 might have been deferred if W.J. Bryan had had his way!

 

[bilby]

Bimetallism? How is that supposed to work? I ask that because its two metals are likely to have varying relative prices.

Not as long as both are difficult to find, and fairly useless for anything other than as money. That mostly held true in the pre-industrial world, with some notable exceptions such as the Spanish bringing large amounts of gold to Europe from their raids in the Americas.

As soon as that stopped being the case for one (silver was both found in large quantities in the Americas, and used widely in new industries such as photography, preservatives for timber, and braising alloys, including solder) the whole thing fell apart.

Gold was found in historically large quantities in the gold rushes contemporary to these changes to the supply and demand for silver; But the relative sizes of these discoveries were very different, and gold remained (as it still remains) pretty much useless.

Finding a sufficiently useless token to represent money, while simultaneously maintaining constraint on (or better still, control of) the supply of those tokens, has been a headache since money began. The big problem is to stop people from copying your chosen tokens, and thereby getting rich while destroying your economy with inflation.

Gold served well in the fairly stable economics of pre-industrial societies, but wasn't adequate thereafter due to deflationary consequences of the money supply's lack of scalability (the rate at which new gold is mined has no relationship to the rate of growth in a fast growing economy).

Ultimately, money is a synonym for value, just as energy is a synonym for work. In both cases, there are a bunch of units you could use; Dollars, Yen, ounces of gold, peppercorns, etc. for money; Calories, Joules, ergs, etc. for energy.

The difference lies in the fact that value is an opinion. So each item has a value that varies from person to person, from place to place, and from time to time.

We can, however, still measure value; We simply ask for people's opinions.

Gold, for example, according to the Perth Mint website, is currently worth between AUD3,115.30 and AUD3,086.77 - that is, the opinions of the people who are looking to obtain some gold right now, and have published that opinion to prospective sellers, is that the maximum value of a troy oz of gold is AUD3,086.77; The opinion of the people who have gold that they are prepared to sell, is that the minimum value of a troy oz of gold is AUD3,115.30.

These opinions vary constantly; As soon as the opinions of buyers and sellers overlap, the mint makes a trade that both parties are happy with - and trades continue until once again the "bid" price falls below the "ask" price.

Some people are very unhappy with the idea that value or money are mere opinions. They prefer to imagine that the (often physical) tokens that represent these opinions have some "intrinsic worth". Of course, that's the last thing we actually want from our monetary tokens; It muddies the waters if people are using their banknotes as a source of notepaper, lavatory paper, or wallpaper.

Gold, like paper, was a good monetary token, precisely because it had little use as anything other than money, so its value could be purely an expression of the opinions of the value of other goods or services, relative to that of the conceptual money, without the value of the physical tokens themselves confusing the issue; And perhaps more importantly, the money supply wouldn't fluctuate due to tokens being used up for other purposes.

Gold was used as money for centuries, in part because it is intrinsically pretty much worthless, which is a very useful quality for any physical token that we want to use to represent the pure opinion that is 'value'.

 

[Bomb#20]

But people don't have to use electrons in the bank for money. You're describing the custom of our tribe and mistaking it for a law of nature. The Sumerians used barley for money. Yes, they could eat it.

True, it's possible to have edible money. Irrelevant to the big picture.

I cannot accept that there's anything in the world chocolate is irrelevant to.

 

[Bomb#20]

Money exists to transfer value, nothing more.

What evidence do you have for that claim? What evidence do you have that "value" even exists? As far as I can see, money exists to persuade people to do what other people want them to do.

You do things, you get money. You trade that money for things others do. It's storing the value you created by working.

Your conclusion doesn't follow from your premises. Someone wants you to work; she offers to pay you with something you both know other people want. You want other people to give you stuff so you accept her deal; then you have what they want so you offer a swap. What does postulating the existence of a qi-like metaphysical substance add to the quality of the explanation?

Possessing money means you have contributed value to society, it is the measure of this value

That makes no sense. Some people possess money who have contributed nothing to society. People can be literally born with money -- a dying man with a pregnant wife leaves money in his will to his unborn child. And of course people regularly give money to their children with no regard for anything the child has contributed. My parents gave me an allowance when I was a child, and a bike. If the bike didn't mean I'd contributed, why would the allowance mean that?

Value can be given to others.

And if so, then it doesn't mean you have contributed value to society. Therefore it cannot be the measure of this value.

and can be exchanged for goods and services that actually are of use to you. Thus it is a debt on society.

Non sequitur. It can be exchanged for goods and services that actually are of use to you because the people who'll exchange goods and services for it want to, not because they owe you, let alone because some nebulous abstract third party you label "society" owes you.

If there was no expectation of getting value for your money you wouldn't have accepted it in the first place.

If by "getting value" you mean "getting stuff that you value", yes, certainly. What makes you think this implies it's a debt on society? People do all manner of things because of the results they expect; but this in no way implies anyone owes them those results.

Suppose you open a restaurant and write up some menus and hire a chef and a waiter and make a lot of food and put up a "Grand Opening" banner. If there was no expectation of getting money for your food you wouldn't have done any of that in the first place. Do you think that created a debt on society? Do other people now have an obligation to come to your restaurant and make all your efforts worth while? If they decide to cook for themselves or go to some other restaurant they find more appealing, have they cheated you? Has "society" welched on a debt? Of course it hasn't. You bet on people's preferences and you lost the bet. Doing something in the expectation of getting something for it is not a sufficient condition for creating indebtedness.

(And this is why eat-the-rich schemes do not work. Their money represents tools and whatnot, taking it away adds nothing to the consumer side of things. It just makes future people very hesitant to put their money into long term things.)

Money doesn't need to "be debt" or "represent tools" or possess any such metaphysical traits in order for taking it away to add nothing to the consumer side of things and make future people very hesitant to put their money into long term things; that's plain cause-and-effect.

That's not a rebuttal.

No? Then neither is this:

Napoleon: You wrote this whole book on astronomy, and you didn't once mention God.
Laplace: I had no need of that hypothesis.​

And what about situations where such a division is impossible? I can't sell a line of code to someone, it would be useless. I have to trade a complete program--and almost no other market participants will have anything valuable enough to trade for that.

I guess I was unclear -- I'm talking about dividing complex transactions, not complex products. For instance, you have a chicken and you want to trade it for shoes, but the shoemaker doesn't want a chicken. She wants a knife. Lucky you -- the knifemaker wants a chicken. So the three of you can make a deal, a triangular exchange. But figuring that out and getting you all together to make your three-way trade is a pain in the neck. (And it was just dumb luck that you only needed three people -- it could just as well have taken a fourteen person chain to make it beneficial to all of you.) But if everybody wants silver then you can break up the three-way deal into two two-way deals. You trade your chicken to the knifemaker for a lump of silver. Then you trade the lump of silver to the shoemaker for shoes. Now you're done, and you never need to know or care that the shoemaker is going to trade his lump of silver for a knife. The silver is money, and it's doing its money job perfectly, even though none of you owe any debts to, or are owed any debts by, one another, or "society", whoever the heck that is.

I think this is a matter of perception. The lump of silver is a claim on value that society produces.

Well, it's certainly true that many people perceive it that way; but then many people perceive that you can't explain the heavens without God. The issue is whether there's a rational basis for the perception.

Suppose you trade your chicken to the knifemaker for a lump of silver, because you expect to get shoes for it. Then you take your lump of silver to the shoemaker, but she balks at the deal you offer her. "What would I want with a lump of silver? Don't you know I'm a werewolf? Silver is poisonous to us. Get that thing away from me!". So you say "But the lump of silver is a claim on value that society produces. Those shoes are value, and I claim them." Then she says "They're not value; they're shoes. Society didn't produce them; I produced them. You can claim them all you please but you claiming does not equal me owing. If you want them, offer me something I want, not something you wrongly expected me to want."

Is she cheating you? Is "society" cheating you?

 

[Bomb#20]

Did I say "certain"? My point, obviously, is that your "You needn't worry" claims about those two types of money were incorrect. If you equate them with "certain", that's on you.

There would hardly be point in distinguishing intrinsic-worth money from bank-created money[/B][/I] if the latter had a definite value.

That's a circular argument. You haven't shown there is a point in distinguishing so-called "intrinsic-worth money" from bank-created money.

What prompts the whole discussion is interest in different monetary methods in the past and future. This thread discusses what's been tried in the past.
Do you not agree that precious-metal money and bank-created money have different definitions, natures, effects?

Do you not agree that silver money and gold money have different definitions, natures, effects? Outside of particle physics, everything has different definitions, natures, and effects from everything else. It takes more than identification of a difference to make a categorization system scientific, or useful, or even coherent.

My use of the term "intrinsic-wealth money" seems to have triggered much irritation. Would trouble have been avoided if I used lpetrich's term "commodity-money"?

Very probably. You appear to have been using "intrinsic" in some idiosyncratic Humpty Dumpty sense that doesn't match what people commonly mean by it. And your attributions of "worth" and "value" have appeared to hark back to prescientific folk-economic notions that economics learned to dispense with back around 1880.

Most of your post was empty abuse like that; I've adequately ridiculed it upthread so here I'm just going to ignore what you said that was non-substantive and/or pointlessly repetitive.

Quite to the contrary. I was responding to a complaint that made no sense UNLESS I assumed the poster was using the word "guarantee" in a different sense than I and Merriam-Webster do.

Dude, you don't get to just casually mix your own premises with the other guy's argument and infer that his argument automatically means whatever it would mean if he agreed with your premises. You're the one who claimed a guarantee means "You needn't worry", not me.

Does a bitcoin have "intrinsic value"?

Good question. Answers of Yes, No and Maybe are all valid!

If so, that's a red-flag that the notion of "intrinsic value" is ill-defined to the point of being "not even wrong".

One major difference with barley, gold, silver etc is that these commodities will trade in a very narrow price range relative to other goods. Historically Bitcoin has been much more erratic. BUT nowhere does the "intrinsic-worth" criterion insist on price stability.

People who access their Bitcoins via an exchange are using bank-created money of course, but what about the underlying monetary base? It MIGHT be viewed as any of the three types we've mentioned: intrinsic, bank-created, fiat. Simplest I think will be new categor(ies): "Hybrid and other moneys." This why I added "20th century and earlier" to the title!

Fair enough; but if your categories were well-defined in the first place this wouldn't be a judgment call -- you could just compare a new type of money with the existing definitions and see if it satisfies them. And of course getting your categories well-defined is only the first step; you still need to show why there's any point to making whichever distinctions your categorization relies on. Analogously, early biologists came up with hundreds of pointless taxonomies before Linnaeus invented one with a point.

Thank you, Mr. Bomb#20 for assuming a more respectful tone.

Your welcome. I assumed a disrespectful tone toward you in the first place because you addressed bilby and Loren so disrespectfully -- your initial disrespect created a debt of disrespect from society that I was paying off.

 

[Swammerdami]

Fair enough; but if your categories were well-defined in the first place this wouldn't be a judgment call -- you could just compare a new type of money with the existing definitions and see if it satisfies them.

Whatever. I put the OPPOSITE spin on this.

The categories of money I defined for 2oth century and earlier were VERY specific.

Precious metal as money -- what could be more specific than coins with an intrinsic worth almost identical to its purchasing power(*)?

Bank-created money is/was also very specific. An (often) trustworthy banker maintains confidential records showing the balances of his customers, and provides pieces of paper (or parchment) that constitute promises to pay out precious metals. The main POINT was NOT that all possible types of money were easily so classified, but that all types of money USED BEFORE THE 21st CENTURY could be so easily classified into three types.

I am not an expert on crypto-currency, but for Bitcoin specifically there are HUGE deviations from ANY type of 19th- or 20th-century money. The "money" depends on a protocol that can be hijacked if anyone gets (50%) control of the mining. Balances and transaction history are publicly known (anonymous IDs can be and are decoded, via spending, by law enforcement). It is the CONTRAST between the types of money that worked for centuries and new proposals for "money" that are especially interesting.

* - "coins with an intrinsic worth". By now only the willfully obtuse could be unaware how I use this term. If instead the phrase provokes another half-dozen posts repeating the same confusion as we've seen, I give up. (Would it be disrespectful to ask my detractors the questions they've still not answered? Do iPhones have "intrinsic worth"? Diamonds? Heroin? Beanie babies?)