Why Gold is commodity money and Bitcoin is not.
The Theory of Money and Credit – and Bitcoin?
In the article I covered the theoretical aspects of fiat vs commodity money but I missed the occasion to mention the practical reason.
A commodity like gold has demand for monetary use and non-monetary use (industrial, artistic). When the demand for monetary use increases relative to non-monetary use, gold flows from industry and jewelry to money production. And vice-versa.
Like a person who has so much gold money, it melts some of it and use it as jewelry. Or a company who has so much monetary gold in account, it uses part of it as raw material for industrial production of some goods.
But in bad times, the person/company brings the jewelry/raw gold to the bank to be cast as money.
Bitcoin cannot be molded for monetary or non-monetary uses. Bitcoin is not a commodity.