[cryptography] Digital cash in the news...

Steven Bellovin smb at cs.columbia.edu
Sat Jun 11 10:49:49 EDT 2011

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

> In article <021CCBA9-9203-4896-8412-481B94595B20 at cs.columbia.edu> you write:
>> http://gcn.com/articles/2011/06/09/bitcoins-digital-currency-silk-road-charles-schumer-joe-manchin.aspx?s=gcndaily_100611
> 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

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