Quote from: Erdogan on January 27, 2015, 01:54:34 PM

Quote from: mirelo on January 27, 2015, 01:37:34 PM

Quote from: Erdogan on January 27, 2015, 12:49:06 PM

Quote from: mirelo on January 27, 2015, 12:28:01 PM

Quote from: Erdogan on January 27, 2015, 12:19:53 PM

The value of the money is formed individually and expressed in the market. Basically each actor compares two things at the time and decides what is best for him at that moment. A nickel or a coke. Maybe you (mirelo) confuse it with the unit of account. That is something that is chosen by a businessman, and the crucial traits are fungibility and divisibility. By the way, a 10 dollar bill is not exactly as valuable as 10 one dollar bills, that you will discover, if you go to a bank with truckloads of money, they will charge you for handling the notes.

The value of money is not "formed individually," but socially. It is not just "expressed in the market," but decided by the market. No buyer can determine the price of anything independently of the seller.

This is fundamental, and a trader in money types should know. The market price is just the last price on the market of one of the goods (money) measured in the other good (which is also money in our case). It does not represent the value of anything except what is in the minds of those two traders at that exact moment, and the two have opposite opinion of the value of the two things, one of them thinks that the amount of bitcoins in question is more valuable than the amount of dollars in question, and vice versa for the other trader. The other individuals that are on the market, either with offers stated, or just waiting to accept a suitable offer, have completely different opinions of the value in the moment. Not even speaking about those that are currently not trading.

A businessman in general has to have some tool to decide if what he is doing is creating value or not, therefore he needs a unit of account. The value does not have to be completely stable for that to work, just reasonably stable. He knows that when he comes out of a set of trades with less dollars than he started out with, he has lost. For many types of business that is enough. If your projects have long durations however, dollar is not good enough either, you have to invent something like an inflation adjusted dollar, or use something else completely.

People are so used to the money that they do not see it, they don't see that any trade is two way with money as half the trade, and the money is some stuff you buy and sell also. It is about viewing it from the opposite angle, where money is the stuff in your focus, and the goods you trade is the payment. When we trade forex and bitcoin, we are driven to see it because both of our good types are money.

You are one step away of eating money rather than food (and having a great disappointment).

I suppose you mean you reject it out of hand. The difference between money and other goods is clear, money is never destroyed by consumption, because it is not useful for anything, while other goods have mostly use value, and sometimes just a small exchange value. But the rules of the market, supply and demand and price discovery by trade, are the same.

Either something is money and buys commodities or it is a commodity and is bought or sold for money. Of course, anything can play both roles, but not simultaneously to the same person. People can believe they buy and sell money only because deriving monetary value from debt requires mistaking the future for the present.