I’m going to make this fairly quick. I have a single, fairly simple definition of what constitutes money. I go to the grocery store, pick up a 12-pack of beer, take the beer to the register, and pay for it. With money. The store clerk looks at the money, recognizes it as such, and accepts it in payment.
I can do this with Federal Reserve Notes anywhere. At the grocery store, at the movies, at the gas station, at Starbucks, literally anywhere I can reach by car. In certain communities, I can even do this with other countries’ money, such as Canadian dollars spent in Watertown, New York, or Mexican pesos spent in El Paso, Texas. I haven’t tried the latter, but I’m sure that, due to the proximity of the Mexican border to El Paso, stores there have a similar setup to those in Watertown, where I tender the foreign currency, the register software calculates the value in US dollars based on the current exchange rate, and tells the clerk how much change to give back, in US dollars. I cannot do this with bitcoin. The store clerk will look at me like I’m from freaking Mars. The value of a bitcoin is so hard to pin down that a reasonable exchange rate cannot be determined in the way that euros to dollars (accepted nearly everywhere in the EU) can be.
So no, bitcoin is not money. It is, at best, a commodity that can be bartered. It’s not even a very good commodity, since I could probably pull out a shiny new American Eagle silver dollar, take that to the store, and have at least some chance of being able to trade it for a 12 pack of beer. Try that with bitcoin, and the clerk will look at you as if you were on drugs, which is one of a very few things you actually can buy with bitcoin.
My question is, if bitcoin is more useful for illicit transactions than legal ones, why hasn’t the US Treasury, Congress, the US Department of Justice, or the Secret Service, whose original function was ensuring the validity of our actual currency, tried to make trading in it illegal? You know it’s only a matter of time, and then what? I’ll gamble with my retirement fund the old fashioned way, with index funds, thank you very much.