I just read an article penned by Steve Forbes, Chairman and Editor-in-Chief of Forbes Media. In his article he argues that Bitcoin isn’t money because it has no fixed value.
You can read the article here - Bitcoin: Whatever It Is, It’s Not Money!
It’s an interesting reaction because when I’m awash in financial data and currency markets, the last thing I’m thinking is how amazingly stable everything is.
Now to preface, I am absolutely no expert in currencies, finance, money, interest, or trade. And I’m bad at math. But I do observe keenly. I was taken aback by the core of his argument because I have worked as a sort of grease monkey at a Forex trading service, and if there was one thing I took away from that experience it’s that what we consider money has no true fixed value. The value of one currency measured against another currency is simply an agreement between two or more parties of what that currency will buy. And to be frank those agreements are not very stable at all.
I won’t go into too much detail but the value of what currency we use to buy milk at the store, depending on the day and the moods of the banks, was completely arbitrary. Anyone who works closely with the inner mechanics of what makes up a Forex market will be able to see this first hand coming from the quote streams from each individual bank. OANDA does a great job of smoothing out these temper tantrums so that forex traders don’t get jammed by them.
Back to the article; some excerpts from Steve!
The basic reason: it has no fixed value. It trades like a stock or commodity. In recent days it has been crashing after a spectacular rise in terms of dollars. Such volatility makes it useless as a means to do transactions. Money has only one purpose–it makes doing transactions, that is buying and selling products and services and securities, infinitely easier than barter. All the other purposes of money flow from this basic function.
But currencies are traded much like stocks or commodities because they do ebb and flow so wildly. In fact as an example commodities themselves can be used as an insulation against currency fluctuations. Further, one of the services many Forex exchange houses offer major corporations are methods for smoothing out international currencies to protect them from even slight changes in currency rates.
That stability you perceive, it takes a herculean effort to maintain.
Perhaps this is a distinctly American perspective. If you’re in the US using US greenbacks, “money” must seem solid as a rock. Everything is priced about the same, the price of groceries doesn’t fluctuate that wildly, and when they do there’s either a large-scale effort to make it seem normal, or else there’s hell to pay. Yes, the United States does set the standard for pricing on a lot of goods.
We don’t really know how this coin is created.
With all due respect, Steve, you don’t. Here’s a link that’ll help clarify things. And I think this is where we’re really running into trouble here. Bitcoin is new, very new, and to people who still have a brick and mortar mindset about the nature of trade and value it must seem like complete voodoo. It can be forgiven to not know, for now, but it won’t be for long. Especially if you’re touting yourself as an expert in fiance. Better start reading!
Unless you are addicted to volatile trading for the sake of trading, stay away from the Bitcoin. Thankfully its plunge will be a salutary caution to most folks.
Which is odd, because most folks still trade NASDAQ in one incarnation or another.
If there’s an argument to be made that Bitcoin will never be stable because it’s unregulated, and therefore it can’t be seen as money, you might want to think twice because that doesn’t always help.
My experience with “virtual currencies” tells me that mainstream trading of them for goods and services will stabilize the currency in question over time. Once people decide that a new iPad is 5 BTC, for example, trading will become less speculative and things will get a lot more boring.
In short… Any given thing that exists doesn’t rely on your understanding of it. And if you don’t understand it you can’t define it. In this case Bitcoin exists, and it is money.
Years ago I “developed” a method for keeping myself on track while doing intense stretches of knowledge work that would impose intermittent breaks on the hour. I called it something like 50/10, and it was pretty effective at helping me to focus without burning my brain out.
50 minutes of pure work, 10 minutes of brain break.
Of course, somebody else thought of this first and with a much better framework! Enter Francesco Cirillo and the Pomodoro technique.
For the last year or so I’ve abandoned my own method for Pomodoros. It’s a valuable habit that works great in conjunction with organization methods like GTD.
When I’m at my desk I have a really simple, but pretty, kitchen timer that works to keep me focused. It helps to have a physical item timing down.
I use Pomodoro Timer Pro by Tatkov Lab on my Android smartphone (its not currently compatible with the Nexus 7, but it would look funny here anyway). It’s a smooth app that’s also esthetically pleasing.
You can get a free eBook in PDF format directly from the Pomodoro website that does a much better job of explaining the method than I can.
I’m getting back into the saddle after a really lazy biking year. In 2012 I think I got on a bicycle less than I have at any time since I was five years old! So this year I’m trying to make up for it by hitting the road as much as possible.
I didn’t really have any concrete plans to outright buy a new bicycle this year, but maintaining my aging 1999 Schwinn Moab is starting to get expensive (this year it could use a full overhaul, new tires, and I’d need new clip shoes). I sold the Bad Boy to pay for my Canon 5D, so it’s out of the picture completely. The Bad Boy was great, but I never felt like I could just stop it anywhere since it was such a theft-magnet.
I decided to check out the stock at Bikes on Wheels just to get a feel for what was out there now. I was casually sniffing around for a standard city bike with a high level of reliability and low maintenance.
With the help of John on the sales floor, I was looking at similar rides from Norco, when the Linus models caught my attention immediately. Specifically the Roadster Sport.
Jumping on, the Roadster felt comfortable and balanced right away. I found out it had a 3-speed internal hub, which was interesting. I only really ever use a handful of gears when I’m riding even if I have some crazy number like 21-speeds, and an internal hub requires less maintenance apparently.
I agreed to take it out for a test run, just to see how I liked it…
Hell yes I liked it.
To be honest i was sold before I got back to the store. The Linus Roadster is incredibly stable. Easily as stable feeling, if not more-so than my Schwinn Moab (taking into account that I’ve been riding it for almost 13 years), and it has the advantage of being more comfortable to boot. The 3-speed hub has excellent ratios for my 37 year old knees and the built-in shifter is responsive. There isn’t a lot of guesswork about what gear you’re in. Also with the internal hub you don’t have that awkward shifting that forces you to try and predict when you’re going to stop.
In the city, at low speeds or higher speeds (like going down Pottery Road) again stability is top-notch, which is of utmost importance when you’re negotiating traffic. For the past couple of days I’ve been riding it around in the late winter crappyness that is Toronto. The only thing that was concerning was my own riding competence.
Details; the pedals are solid steel, very rugged. The bars are the same with very little give. It’s “light enough” in that it’s not back-breakingly heavy but it certainly won’t be the lightest thing on the road. The frame isn’t super stiff so hitting bumps isn’t brutal. It comes with a high quality bell and luggage rack.. Not the most exciting features but they make all the difference when you need them.
I may regret saying this so early into the year, but I’ll be very surprised if this bike doesn’t outlive me.
Final note: The staff at Bikes on Wheels are great. It’s a very helpful and relaxed crew. I’d highly recommend going there if you’re hunting for a new ride.