Why Gold is commodity money and Bitcoin is not.

GoldNRollGoldNRoll Posts: 211 Bronze ✭✭✭
I wrote an article for the Austrian Economics Center blog, about bitcoin not being commodity money:

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.
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