Should Bitcoin be considered a Commodity or a Currency?

[Kakashi2020]

There's a bit of confusion about this topic because some nations treat Bitcoin as a Commodity and some treat it as a Currency and then there's UK which treats it as a Commodity and as a Currency. What is your take on this?

[cks003]

Bitcoin is supported by confidence and not by commodity as in fiat money.  Currency supported by commodity is usually related to its economy, monetary policy, gold, balance of payment etc, but Bitcoin is supported by neither of them.  The price mainly is influenced by confidence and speculation/anticipation of the "investors" on the future acceptance in the market place.  Therefore, it has no intrinsic value or asset value that can support and be gauged by market place.

[Martinsx]

Cryptocurrency is not a commodity. It doesn't work like that. It's not affect by the law of demand and supply which affects most commodities. It's purely a digital currency and nothing less than that. 

[menchuuy58]

17 hours ago, Kakashi2020 said:

There's a bit of confusion about this topic because some nations treat Bitcoin as a Commodity and some treat it as a Currency and then there's UK which treats it as a Commodity and as a Currency. What is your take on this?

Its great to know that other countries are treating bitcoin as a commodity. The way I know it is its currency. Bitcoin is a cryptocurrency.

[JPK0007]

Bitcoin is a cryptocurrency but it cannot substitute the fiat currency, given the huge fluctuation in its value and the inherent risk that comes due to the volatility. I think that in the current scenario Bitcoin can be termed as an asset but not a currency. However, you never know that in the future, given its ever-increasing popularity all throughout the world it can take place as an accepted form of currency.

[Bravosi]

Currency, all the way. As many people have already suggested Bitcoin is not just some low class barter item, but a part of a huge beastly machine, that can run the economy. The only reason I can see for why many still don't consider it as a currency is because banks and etc are afraid to lose their monopoly. When people will be running money, our society will get better.

[cks003]

If Bitcoin becomes currency, the authority and ability to intervene during crisis, deflation and downturn will be replaced by pure market forces.  It is the free market that brought down the economy in 1929 crisis which highlighted the importance of mix economy, in which private and public join forces to "run" the economy.  One cannot deny the role played by banks as intermediaries in almost all of the economic transactions, but at the same time money is created in the banking system.  Money creation is the main impediment to Bitcoin becoming currency.

[janie1984]

On 11/6/2018 at 2:05 AM, Martinsx said:

Cryptocurrency is not a commodity. It doesn't work like that. It's not affect by the law of demand and supply which affects most commodities. It's purely a digital currency and nothing less than that. 

That's an inaccurate way to define a commodity. Bitcoin is affected by supply and demand as much as any commodity. It is a digital currency, yes but due to its creation through mining one can make the argument that it is also a mined commodity with a finite amount, the same as oil, gold, or any other. What makes it so difficult to correctly define is that as a society, we have moved away from using a mined mineral or object as a source of currency for a long time. Couple with the fact that this is a intrinsic value rather than a physical one, it leads to the melding of two different currency structures. Personally I think it should be treated as a hybrid, similar to the UK's method, as it cannot only be defined as one or the other when it's a combination of both.

[Martinsx]

4 hours ago, janie1984 said:

That's an inaccurate way to define a commodity. Bitcoin is affected by supply and demand as much as any commodity. It is a digital currency, yes but due to its creation through mining one can make the argument that it is also a mined commodity with a finite amount, the same as oil, gold, or any other. What makes it so difficult to correctly define is that as a society, we have moved away from using a mined mineral or object as a source of currency for a long time. Couple with the fact that this is a intrinsic value rather than a physical one, it leads to the melding of two different currency structures. Personally I think it should be treated as a hybrid, similar to the UK's method, as it cannot only be defined as one or the other when it's a combination of both.

If I'm getting what you are trying to say, cryptocurrency is both a currency and a commodity. Well, I agree with you on this to some extent but I'm seeing it as more of a currency than a commodity because not all commodities can be used to pay for transactions but cryptocurrency are used for such purposes just like currency is used. 

[janie1984]

3 hours ago, Martinsx said:

If I'm getting what you are trying to say, cryptocurrency is both a currency and a commodity. Well, I agree with you on this to some extent but I'm seeing it as more of a currency than a commodity because not all commodities can be used to pay for transactions but cryptocurrency are used for such purposes just like currency is used. 

That's why I said it's a weird hybrid of both commodity and currency, so rather than treat it strictly as one or the other policy for it should be a blended combination based on the best way- to our knowldge at this time- to govern it. Also, if you want get really into the nitty gritty of commodities, at one point in time they were used as is, when society was based on a batering or trading economy. I agree with you that now commodities obviously could not be used in the place of money, but given it being such a new technology we really have to utilize any available historic and economic inofrmation available to really try to understand the best way to govern and understand cryptocurrency. 

[Martinsx]

23 hours ago, janie1984 said:

That's why I said it's a weird hybrid of both commodity and currency, so rather than treat it strictly as one or the other policy for it should be a blended combination based on the best way- to our knowldge at this time- to govern it. Also, if you want get really into the nitty gritty of commodities, at one point in time they were used as is, when society was based on a batering or trading economy. I agree with you that now commodities obviously could not be used in the place of money, but given it being such a new technology we really have to utilize any available historic and economic inofrmation available to really try to understand the best way to govern and understand cryptocurrency. 

Then we have an understanding already because we agree on the same thing even though it's not 100% agreement but there is no need to drag it out any more. It's possible that it can be seen as a commodity and currency as well, it's only the future that would determine the real nature and value that would be placed on cryptocurrency. 

[focusedwriter10]

The fact that prices of Bitcoin do not depend solely on the demand and supply disqualifies it to be a commodity. Instead, Bitcoin is a currency, though a digital currency. 

[Bravosi]

11 minutes ago, focusedwriter10 said:

The fact that prices of Bitcoin do not depend solely on the demand and supply disqualifies it to be a commodity. Instead, Bitcoin is a currency, though a digital currency. 

I was wondering, what affects the Bitcoin market exactly? Amount of Bitcoins purchased and owned, overall global economy or something else?

[focusedwriter10]

On 12/1/2018 at 12:55 PM, Bravosi said:

I was wondering, what affects the Bitcoin market exactly? Amount of Bitcoins purchased and owned, overall global economy or something else?

Well, I may not state that clearly, but what I know is that demand and supply rarely affect the prices of Bitcoin. However, the amount of Bitcoin mined, purchased and owned affects the market.