Quote from: painlord2k on December 03, 2014, 11:00:53 PM

Quote from: Atdhe on December 01, 2014, 09:42:34 PM

Jesus f***** Christ.
Here it seems everyone is doing his own definitions. I have MA in macroeconomics btw. No, money is NOT commodity. Money is what people accept as money, period.

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DEFINITION OF 'COMMODITY'
1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often used as inputs in the production of other goods or services. The quality of a given commodity may differ slightly, but it is essentially uniform across producers. When they are traded on an exchange, commodities must also meet specified minimum standards, also known as a basis grade.

2. Any good exchanged during commerce, which includes goods traded on a commodity exchange.

Money is a commodity because every unit is interchangeable with any other unit of the same type. Gold can be money because every coin is interchangeable with every other coin of the same type of size/weight.

When you say "money is what people accept as money" you are right, but beg the question "what does people accept as money?"
Individuals could accept anything as money one time, but what will they continue, in the long run, to accept as money?
What is the fitness function of money?
What people will accept as money in the long run is what have the best features to be money.

Being debt and relying on a third party is not a good feature for any form of money.
Fiat money have some features making up for this problem, albeit not completely.

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What you are talking about is monetary base and you have some false assumptions about it as well. If everything what you write was true, fiat money would never existed, yet they exist based on thin air.

In fact, fiat money could not exist without being linked to something from the start.
Fiat money, initially, was linked to gold and/or silver.
When the link was removed (after the possibility to return to gold and silver coins was removed too) people had some past experience of the value of fiat money (E.G. how much 1 $ bill could buy). So it continued to work. Every other fiat currency created is always linked to something else at the time of its creation (E.G. the was linked to a fixed exchange rate with the previous national currencies).

Any counterfactual example of a fiat currency established without any link to a previous currency or form of money?

Good. It is vital to fork debate to nonsense, only because you want money as commodity.

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Commodities are most often used as inputs in the production of other goods or services.

While I can imagine the paper US dollar to serve as input for toilet paper, it is beyong my imagination what input can be digital money (botg cryptocurrencies and digital fiat).

There were many kinds of money in history like shells or stones, that were no way commodity (although such money is in very stupid way called commodity money and mixed for example with barley, which was commodity [and money]). The only purpose of those artefacts was...to serve as money. Same case as fiat money or BTC, the only difference is that fiat or BTC is not pshysical. And that was part of the monetary evolution. From physical money to something we can not touch.

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Individuals could accept anything as money one time, but what will they continue, in the long run, to accept as money?

You still mix it up with the commodity. Money of course is the symbol that people gradually agree on, that serves as money in long term! If something - in your case commodity - is accepted as money one time, it does not mean it really is money. Money by definition need to be accepted by most and in the long run. Therefore BTC btw. is not money yet. Commodities on the other hand have big disadvatage to serve as money especially in modern societies. This is why states with fiat money won over the states based on gold.

I understand completely the mindfuck in human brains. We see that money is in the middle of all real economy, so brain does not want to accept that themoney can be somewhat less real. And if it is less real like the fiat, then it is evil. Unfortunately such approach is just the mindfuck.

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Being debt and relying on a third party is not a good feature for any form of money.

Well it is necessary feature of any money. All money can be seen as debt and debt is the reason why money exist. Today I do my work as car washer for example and because of specialisation, I am not directly rewarded. I get money instead. Form of IOU in special way that everyone accepts. Later I will pay to third party. That is the basics of economy and even thousands years ago it worked like that.

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In fact, fiat money could not exist without being linked to something from the start.
Fiat money, initially, was linked to gold and/or silver.
When the link was removed (after the possibility to return to gold and silver coins was removed too) people had some past experience of the value of fiat money (E.G. how much 1 $ bill could buy). So it continued to work. Every other fiat currency created is always linked to something else at the time of its creation (E.G. the was linked to a fixed exchange rate with the previous national currencies).

Any counterfactual example of a fiat currency established without any link to a previous currency or form of money?

Do you think that teenagers think about some past link to gold? No. Most people accept money only because other people accept the same money..as money. Most people do not think even that deeply. Part of the people fall like you under very false rationalisation that there is or should be something behind money, but that is it. In the past people needed the false impression that money is backed more, but today, with complexity of the world, people just give up and use what works (it can be USD, smartphone or BTC). For money to exist it is not important why people believe in them. It is always some made-up mythology bullshit. The important thing aboutmoney is that people believe in it.

So that is why hopefully BTC can exist as currency. Postmodern people do not ask questions "how" or "why". Those questions make no sense by money. Money is 100% tautology. Money is money because it is money. If something is not money, then it is not money. Fortunatelly for BTC, most people now are so shallow, that they will swallow it and money can be freed from the quasi-state, where it had still pretend some pegging to gold or so.