Bitcoin as a medium of exchange - Revision history

Belcher: /* Bitcoin as a low-trust medium of exchange */ Add date note

2020-03-04T18:10:30Z

Bitcoin as a low-trust medium of exchange: Add date note

← Older revision		Revision as of 18:10, 4 March 2020
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	* '''Low fee'''. [[Transaction fees]] can vary between a few cents and a few dollars depending on network demand and how much priority you wish to assign to the transaction. This property is traded off with being fast.		* '''Low fee'''. [[Transaction fees]] can vary between a few cents and a few dollars depending on network demand and how much priority you wish to assign to the transaction. This property is traded off with being fast.

	The '''fast''' and '''low fee''' properties usually cannot come together, there is a tradeoff between them. A fast transaction usually doesn't have a low fee, a low fee transaction usually isn't fast. See the article on [[Transaction_fees#The_market_for_block_space\|transaction fees]]. This tradeoff could be made better with technology that hasn't been created yet (see [[Lightning Network]]).		The '''fast''' and '''low fee''' properties usually cannot come together, there is a tradeoff between them. A fast transaction usually doesn't have a low fee, a low fee transaction usually isn't fast. See the article on [[Transaction_fees#The_market_for_block_space\|transaction fees]]. This tradeoff could be made better with technology that hasn't been created yet as of 2017 (see [[Lightning Network]]).

	==Volatility==		==Volatility==

Belcher: /* Bitcoin as a low-trust medium of exchange */ added hard to counterfeit as a feature

2018-01-16T14:45:06Z

Bitcoin as a low-trust medium of exchange: added hard to counterfeit as a feature

← Older revision		Revision as of 14:45, 16 January 2018
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	* [[Irreversible Transactions\|'''Irreversible''']]. Once a transaction is settled nobody can undo it, like cash. (but [[Irreversible_Transactions#Consumer_Protection\|consumer protection]] is still possible.)		* [[Irreversible Transactions\|'''Irreversible''']]. Once a transaction is settled nobody can undo it, like cash. (but [[Irreversible_Transactions#Consumer_Protection\|consumer protection]] is still possible.)
	* '''ID-less'''. Does not require ID or registration to use. So can be used by privacy-conscious people, minors, computers, unbanked people, third-world residents, stateless people, etc		* '''ID-less'''. Does not require ID or registration to use. So can be used by privacy-conscious people, minors, computers, unbanked people, third-world residents, stateless people, etc
			* '''Hard to counterfeit'''. Wallet software (especially [[full node]] wallets) will always do cryptographic checks on incoming transactions. It's virtually impossible to get a fake bitcoin accepted.
	* '''Worldwide/borderless'''. Works anywhere where the internet does.		* '''Worldwide/borderless'''. Works anywhere where the internet does.
	* '''Anonymous'''. Does not reveal any ID to your counterparty, requires care see [[Anonymity]].		* '''Anonymous'''. Does not reveal any ID to your counterparty, requires care see [[Anonymity]].

Belcher: /* Bitcoin as a money-like good */ word

2017-12-16T01:40:51Z

Bitcoin as a money-like good: word

← Older revision		Revision as of 01:40, 16 December 2017
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	These properties may not be exact, but in practice all of them are true. Bitcoins are divisible down to [[Satoshi_(unit)\|0.00000001 bitcoin]] but sending amounts below 0.000002 btc (0.0002 USD) via a blockchain [[transaction]] is usually not practical. Wallet software recognizes every bitcoin the same as every other, so it's fungible, but bad privacy practices could in theory destroy this property if they become widespread. Some people use lightweight wallets which would [[Full_node#Economic_strength\|accept counterfeit bitcoins as payment]]. Despite this bitcoin can function as a money-like good in practice today.		These properties may not be exact, but in practice all of them are true. Bitcoins are divisible down to [[Satoshi_(unit)\|0.00000001 bitcoin]] but sending amounts below 0.000002 btc (0.0002 USD) via a blockchain [[transaction]] is usually not practical. Wallet software recognizes every bitcoin the same as every other, so it's fungible, but bad privacy practices could in theory destroy this property if they become widespread. Some people use lightweight wallets which would [[Full_node#Economic_strength\|accept counterfeit bitcoins as payment]]. Despite this bitcoin can function as a money-like good in practice today.

	Bitcoin is also reasonably widely accepted, it can be ~~almost~~ bought and sold almost anywhere in the world especially in the developed world with a variety of methods. See the guide on [[Trading_bitcoins\|buying and selling bitcoins]], for example some bitcoins could be transferred to a bitcoin debit card to spend them ~~whereever~~ regular debit cards are accepted.		Bitcoin is also reasonably widely accepted, it can be bought and sold almost anywhere in the world especially in the developed world with a variety of methods. See the guide on [[Trading_bitcoins\|buying and selling bitcoins]], for example some bitcoins could be transferred to a bitcoin debit card to spend them wherever regular debit cards are accepted.

	Bitcoin's value can be volatile, there is little mechanism for encouraging stability or avoiding bubbles, although [[Controlled supply\|supply is pre-determined]]. This usually leads to commerce being denominated in USD or another more stable currency and only settled in bitcoin. Similar to how in certain less-stable countries dollars or euros are used and settlement happens in the local currency.		Bitcoin's value can be volatile, there is little mechanism for encouraging stability or avoiding bubbles, although [[Controlled supply\|supply is pre-determined]]. This usually leads to commerce being denominated in USD or another more stable currency and only settled in bitcoin. Similar to how in certain less-stable countries dollars or euros are used and settlement happens in the local currency.

Belcher: /* Bitcoin as a low-trust medium of exchange */ reworded the part about the tradeoff between fast and low fee

2017-08-26T15:33:40Z

Bitcoin as a low-trust medium of exchange: reworded the part about the tradeoff between fast and low fee

← Older revision		Revision as of 15:33, 26 August 2017
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	* '''Low fee'''. [[Transaction fees]] can vary between a few cents and a few dollars depending on network demand and how much priority you wish to assign to the transaction. This property is traded off with being fast.		* '''Low fee'''. [[Transaction fees]] can vary between a few cents and a few dollars depending on network demand and how much priority you wish to assign to the transaction. This property is traded off with being fast.

	The '''fast''' and '''low fee''' properties ~~are not fundamental to bitcoin~~'~~s blockchain~~ [[~~transactions~~]]. ~~They~~ could be made better with technology that hasn't been created yet (see [[Lightning Network]])~~, bitcoin's fundamental value is the low requirement for trust and the censorship-resistance, irreversible transactions and permissionlessness that come with that~~.		The '''fast''' and '''low fee''' properties usually cannot come together, there is a tradeoff between them. A fast transaction usually doesn't have a low fee, a low fee transaction usually isn't fast. See the article on [[Transaction_fees#The_market_for_block_space\|transaction fees]]. This tradeoff could be made better with technology that hasn't been created yet (see [[Lightning Network]]).

	==Volatility==		==Volatility==

Belcher: added timelock page as an example of a useful smart contract

2017-08-20T16:40:31Z

added timelock page as an example of a useful smart contract

← Older revision		Revision as of 16:40, 20 August 2017
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	* '''Quick setup'''. You can start accepting bitcoins instantaneously, without setting up merchant accounts, buying credit card processing hardware, etc, because bitcoin wallets are simple items of software.		* '''Quick setup'''. You can start accepting bitcoins instantaneously, without setting up merchant accounts, buying credit card processing hardware, etc, because bitcoin wallets are simple items of software.
	* '''Push system'''. Other internet mediums of exchange like credit cards are 'pull systems', where the receiver is given the sender's credentials and then they pull money into their account. (hopefully the correct amount!)		* '''Push system'''. Other internet mediums of exchange like credit cards are 'pull systems', where the receiver is given the sender's credentials and then they pull money into their account. (hopefully the correct amount!)
	* '''Programmable'''. A web server can understand or create transactions automatically, for example to release escrow or automatically provide a good or service. Smart [[contracts]] can be written with the knowledge that they will be followed no matter what. This allows bitcoin to do things which other media of exchange cannot, such as [[multisignature]].		* '''Programmable'''. A web server can understand or create transactions automatically, for example to release escrow or automatically provide a good or service. Smart [[contracts]] can be written with the knowledge that they will be followed no matter what. This allows bitcoin to do things which other media of exchange cannot, such as [[multisignature]] or [[timelock]].
	* '''Fast'''. Transactions are broadcast through the peer-to-peer network in seconds and can become irreversible within an hour.		* '''Fast'''. Transactions are broadcast through the peer-to-peer network in seconds and can become irreversible within an hour.
	* '''Low fee'''. [[Transaction fees]] can vary between a few cents and a few dollars depending on network demand and how much priority you wish to assign to the transaction. This property is traded off with being fast.		* '''Low fee'''. [[Transaction fees]] can vary between a few cents and a few dollars depending on network demand and how much priority you wish to assign to the transaction. This property is traded off with being fast.

Belcher: /* See Also */ added link 'Bitcoin as an investment'

2017-07-31T20:00:25Z

See Also: added link 'Bitcoin as an investment'

← Older revision		Revision as of 20:00, 31 July 2017
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	== See Also ==		== See Also ==

			* [[Bitcoin as an investment]]
	* [[Principles of Bitcoin]]		* [[Principles of Bitcoin]]
	* [[Irreversible Transactions]]		* [[Irreversible Transactions]]

Belcher: /* Bitcoin as a low-trust medium of exchange */ added 'quick setup'

2017-07-28T20:19:11Z

Bitcoin as a low-trust medium of exchange: added 'quick setup'

← Older revision		Revision as of 20:19, 28 July 2017
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	* '''Accountable'''. Publishing your public keys reveals all your transactions, anybody with those keys can see all your transfers on the blockchain record of all bitcoin transactions. (this may be useful for a charity, revealing to an auditor, as proof of reserves for a custodian)		* '''Accountable'''. Publishing your public keys reveals all your transactions, anybody with those keys can see all your transfers on the blockchain record of all bitcoin transactions. (this may be useful for a charity, revealing to an auditor, as proof of reserves for a custodian)
	* '''Good uptime'''. Works 24 hours a day, 365 days per year.		* '''Good uptime'''. Works 24 hours a day, 365 days per year.
			* '''Quick setup'''. You can start accepting bitcoins instantaneously, without setting up merchant accounts, buying credit card processing hardware, etc, because bitcoin wallets are simple items of software.
	* '''Push system'''. Other internet mediums of exchange like credit cards are 'pull systems', where the receiver is given the sender's credentials and then they pull money into their account. (hopefully the correct amount!)		* '''Push system'''. Other internet mediums of exchange like credit cards are 'pull systems', where the receiver is given the sender's credentials and then they pull money into their account. (hopefully the correct amount!)
	* '''Programmable'''. A web server can understand or create transactions automatically, for example to release escrow or automatically provide a good or service. Smart [[contracts]] can be written with the knowledge that they will be followed no matter what. This allows bitcoin to do things which other media of exchange cannot, such as [[multisignature]].		* '''Programmable'''. A web server can understand or create transactions automatically, for example to release escrow or automatically provide a good or service. Smart [[contracts]] can be written with the knowledge that they will be followed no matter what. This allows bitcoin to do things which other media of exchange cannot, such as [[multisignature]].

Belcher: added bitcoin debit card example

2017-07-28T13:47:45Z

added bitcoin debit card example

← Older revision		Revision as of 13:47, 28 July 2017
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	These properties may not be exact, but in practice all of them are true. Bitcoins are divisible down to [[Satoshi_(unit)\|0.00000001 bitcoin]] but sending amounts below 0.000002 btc (0.0002 USD) via a blockchain [[transaction]] is usually not practical. Wallet software recognizes every bitcoin the same as every other, so it's fungible, but bad privacy practices could in theory destroy this property if they become widespread. Some people use lightweight wallets which would [[Full_node#Economic_strength\|accept counterfeit bitcoins as payment]]. Despite this bitcoin can function as a money-like good in practice today.		These properties may not be exact, but in practice all of them are true. Bitcoins are divisible down to [[Satoshi_(unit)\|0.00000001 bitcoin]] but sending amounts below 0.000002 btc (0.0002 USD) via a blockchain [[transaction]] is usually not practical. Wallet software recognizes every bitcoin the same as every other, so it's fungible, but bad privacy practices could in theory destroy this property if they become widespread. Some people use lightweight wallets which would [[Full_node#Economic_strength\|accept counterfeit bitcoins as payment]]. Despite this bitcoin can function as a money-like good in practice today.

	Bitcoin is also reasonably widely accepted, it can be almost bought and sold almost anywhere in the world especially in the developed world with a variety of methods. See the guide on [[Trading_bitcoins\|buying and selling bitcoins]].		Bitcoin is also reasonably widely accepted, it can be almost bought and sold almost anywhere in the world especially in the developed world with a variety of methods. See the guide on [[Trading_bitcoins\|buying and selling bitcoins]], for example some bitcoins could be transferred to a bitcoin debit card to spend them whereever regular debit cards are accepted.

	Bitcoin's value can be volatile, there is little mechanism for encouraging stability or avoiding bubbles, although [[Controlled supply\|supply is pre-determined]]. This usually leads to commerce being denominated in USD or another more stable currency and only settled in bitcoin. Similar to how in certain less-stable countries dollars or euros are used and settlement happens in the local currency.		Bitcoin's value can be volatile, there is little mechanism for encouraging stability or avoiding bubbles, although [[Controlled supply\|supply is pre-determined]]. This usually leads to commerce being denominated in USD or another more stable currency and only settled in bitcoin. Similar to how in certain less-stable countries dollars or euros are used and settlement happens in the local currency.

Belcher: added section on volatility

2017-07-28T12:57:12Z

added section on volatility

← Older revision		Revision as of 12:57, 28 July 2017
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	The '''fast''' and '''low fee''' properties are not fundamental to bitcoin's blockchain [[transactions]]. They could be made better with technology that hasn't been created yet (see [[Lightning Network]]), bitcoin's fundamental value is the low requirement for trust and the censorship-resistance, irreversible transactions and permissionlessness that come with that.		The '''fast''' and '''low fee''' properties are not fundamental to bitcoin's blockchain [[transactions]]. They could be made better with technology that hasn't been created yet (see [[Lightning Network]]), bitcoin's fundamental value is the low requirement for trust and the censorship-resistance, irreversible transactions and permissionlessness that come with that.

			==Volatility==

			Bitcoin's exchange rate is currently more unstable than many other currencies. It is hoped that as bitcoin becomes more widely used its volatility will drop. This has already happened when comparing the volatility between 2017 and 2010. See the site: http://btcvol.info/

			Despite this, bitcoin's volatility can be mostly avoided when using bitcoin for commerce by buying the required amount of coins and then immediately spending them (for example, to donate to an organization without the payment being blocked, or paying for a VPN anonymously)

	== See Also ==		== See Also ==

Belcher: /* Bitcoin as a low-trust medium of exchange */ added "or seize" to the 'unfreezable' point

2017-07-26T18:43:47Z

Bitcoin as a low-trust medium of exchange: added "or seize" to the 'unfreezable' point

← Older revision		Revision as of 18:43, 26 July 2017
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	Bitcoin also has these properties above and beyond the required ones for money. Almost all of them come from the low requirement for trust of bitcoin which separate it from almost any other medium of exchange. See [[Principles_of_Bitcoin#Low_trust]].		Bitcoin also has these properties above and beyond the required ones for money. Almost all of them come from the low requirement for trust of bitcoin which separate it from almost any other medium of exchange. See [[Principles_of_Bitcoin#Low_trust]].

	* '''Censorship resistant'''. Nobody can block or ~~seize~~ a transfer of any amount.		* '''Censorship resistant'''. Nobody can block or intercept a transfer of any amount.
	* '''Permissionless'''. No arbitrary gatekeepers can stop someone using it. The bitcoin software can be installed by anybody and used to send/receive.		* '''Permissionless'''. No arbitrary gatekeepers can stop someone using it. The bitcoin software can be installed by anybody and used to send/receive.
	* '''Un-freezable'''. Nobody can freeze your accounts.		* '''Un-freezable'''. Nobody can freeze or seize your accounts.
	* [[Irreversible Transactions\|'''Irreversible''']]. Once a transaction is settled nobody can undo it, like cash. (but [[Irreversible_Transactions#Consumer_Protection\|consumer protection]] is still possible.)		* [[Irreversible Transactions\|'''Irreversible''']]. Once a transaction is settled nobody can undo it, like cash. (but [[Irreversible_Transactions#Consumer_Protection\|consumer protection]] is still possible.)
	* '''ID-less'''. Does not require ID or registration to use. So can be used by privacy-conscious people, minors, computers, unbanked people, third-world residents, stateless people, etc		* '''ID-less'''. Does not require ID or registration to use. So can be used by privacy-conscious people, minors, computers, unbanked people, third-world residents, stateless people, etc

← Older revision		Revision as of 01:40, 16 December 2017
Line 7:		Line 7:
	These properties may not be exact, but in practice all of them are true. Bitcoins are divisible down to [[Satoshi_(unit)\|0.00000001 bitcoin]] but sending amounts below 0.000002 btc (0.0002 USD) via a blockchain [[transaction]] is usually not practical. Wallet software recognizes every bitcoin the same as every other, so it's fungible, but bad privacy practices could in theory destroy this property if they become widespread. Some people use lightweight wallets which would [[Full_node#Economic_strength\|accept counterfeit bitcoins as payment]]. Despite this bitcoin can function as a money-like good in practice today.		These properties may not be exact, but in practice all of them are true. Bitcoins are divisible down to [[Satoshi_(unit)\|0.00000001 bitcoin]] but sending amounts below 0.000002 btc (0.0002 USD) via a blockchain [[transaction]] is usually not practical. Wallet software recognizes every bitcoin the same as every other, so it's fungible, but bad privacy practices could in theory destroy this property if they become widespread. Some people use lightweight wallets which would [[Full_node#Economic_strength\|accept counterfeit bitcoins as payment]]. Despite this bitcoin can function as a money-like good in practice today.

	Bitcoin is also reasonably widely accepted, it can be ~~almost~~ bought and sold almost anywhere in the world especially in the developed world with a variety of methods. See the guide on [[Trading_bitcoins\|buying and selling bitcoins]], for example some bitcoins could be transferred to a bitcoin debit card to spend them ~~whereever~~ regular debit cards are accepted.		Bitcoin is also reasonably widely accepted, it can be bought and sold almost anywhere in the world especially in the developed world with a variety of methods. See the guide on [[Trading_bitcoins\|buying and selling bitcoins]], for example some bitcoins could be transferred to a bitcoin debit card to spend them wherever regular debit cards are accepted.

	Bitcoin's value can be volatile, there is little mechanism for encouraging stability or avoiding bubbles, although [[Controlled supply\|supply is pre-determined]]. This usually leads to commerce being denominated in USD or another more stable currency and only settled in bitcoin. Similar to how in certain less-stable countries dollars or euros are used and settlement happens in the local currency.		Bitcoin's value can be volatile, there is little mechanism for encouraging stability or avoiding bubbles, although [[Controlled supply\|supply is pre-determined]]. This usually leads to commerce being denominated in USD or another more stable currency and only settled in bitcoin. Similar to how in certain less-stable countries dollars or euros are used and settlement happens in the local currency.

← Older revision		Revision as of 13:47, 28 July 2017
Line 7:		Line 7:
	These properties may not be exact, but in practice all of them are true. Bitcoins are divisible down to [[Satoshi_(unit)\|0.00000001 bitcoin]] but sending amounts below 0.000002 btc (0.0002 USD) via a blockchain [[transaction]] is usually not practical. Wallet software recognizes every bitcoin the same as every other, so it's fungible, but bad privacy practices could in theory destroy this property if they become widespread. Some people use lightweight wallets which would [[Full_node#Economic_strength\|accept counterfeit bitcoins as payment]]. Despite this bitcoin can function as a money-like good in practice today.		These properties may not be exact, but in practice all of them are true. Bitcoins are divisible down to [[Satoshi_(unit)\|0.00000001 bitcoin]] but sending amounts below 0.000002 btc (0.0002 USD) via a blockchain [[transaction]] is usually not practical. Wallet software recognizes every bitcoin the same as every other, so it's fungible, but bad privacy practices could in theory destroy this property if they become widespread. Some people use lightweight wallets which would [[Full_node#Economic_strength\|accept counterfeit bitcoins as payment]]. Despite this bitcoin can function as a money-like good in practice today.

	Bitcoin is also reasonably widely accepted, it can be almost bought and sold almost anywhere in the world especially in the developed world with a variety of methods. See the guide on [[Trading_bitcoins\|buying and selling bitcoins]].		Bitcoin is also reasonably widely accepted, it can be almost bought and sold almost anywhere in the world especially in the developed world with a variety of methods. See the guide on [[Trading_bitcoins\|buying and selling bitcoins]], for example some bitcoins could be transferred to a bitcoin debit card to spend them whereever regular debit cards are accepted.

	Bitcoin's value can be volatile, there is little mechanism for encouraging stability or avoiding bubbles, although [[Controlled supply\|supply is pre-determined]]. This usually leads to commerce being denominated in USD or another more stable currency and only settled in bitcoin. Similar to how in certain less-stable countries dollars or euros are used and settlement happens in the local currency.		Bitcoin's value can be volatile, there is little mechanism for encouraging stability or avoiding bubbles, although [[Controlled supply\|supply is pre-determined]]. This usually leads to commerce being denominated in USD or another more stable currency and only settled in bitcoin. Similar to how in certain less-stable countries dollars or euros are used and settlement happens in the local currency.