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Comment by guiomie | Hacker News Reader

Can you trade an index ?

In most cases, no. But Futures and Options on Futures are usually tradable on an Index once the futures are created.

If I make one hundred pieces of blue paper and I call it a currency and I start selling it to people, would this type of behavior be questionable? Bitcoin is just a complicated high tech version of this. It's debateable whether or not Bitcoin is empty dreams, outright fraud, or an actual currency. What bitcoin is, is not the point. The point is this "index" you want to buy.

Lets say I make 100 pieces of red paper but this time I say each piece of paper represents 1/100th of an index fund that tracks the cost of the blue paper. Also whoever buys a red paper from me has to pay me annual fund management fees.

You're telling me you want to buy these pieces of paper that ALREADY track a "currency" that is quite sketchy in nature? If you want to gamble your money, gamble the right way, buy the blue paper, or in other words just buy bitcoin straight up.

> It's debateable whether or not Bitcoin is empty dreams, outright fraud, or an actual currency.

It's also debatable if you've stopped beating your wife or are in a loving marriage with her. Hopefully you see what we both did there.

Context: http://en.wikipedia.org/wiki/Mu_%28negative%29

Personally, I don't consider Bitcoin a currency. It's more than that.

Perhaps my wife enjoys BDSM and thus loves being beaten while at the same time being in a loving marriage with me. Different perspectives yield different conclusions, especially when whether or not something is "currency" depends entirely on perspective itself. Hopefully you can realize that.

I'm curious to hear why you think it's more then "currency." Personally I think you can't even call it a currency yet.... Though this may change down the road.

I love your response, as it is all about context and understanding. My main point was centered on the fact you really can't speak for others unless you have their context, which is impossible because you aren't them. I do realize how important that distinction is! :)

Bitcoin provides features of currency, but does so with a nod to identity management as access is limited to those with the keys. This means cryptocurrencies could give way to federation, which is payments + identity + some standard. The problem cloud continues to disrupt everything in sight - including traditional 'currency'.

I am also surprised regulatory agencies are allowing this. An index fund which tracks prices of a currency based on a cryptographic standard.

> If I make one hundred pieces of blue paper and I call it a currency and I start selling it to people

You just described fiat currency. Just change blue to green. (in the US - others than many other colors, so pretty). Bitcoin is backed by a cryptographic standard. The USD is backed by the government and a military force. Both are seen as valuable by someone. Both have little or no true valuable items behind them, other than confidence. One, the government and the guns, the other, the anti-counterfeit nature and provability via the global ledger.

The dollar is backed by culture and tradition, the government has no control over whether or not you want to use or accept a dollar for goods.

Bitcoin is still new and thus still speculative. Being backed by cryptography doesn't mean shit. It just means you can't copy it. So what? It still holds zero intrinsic value. Sure the dollar holds no intrinsic value either. But why the dollar vs bitcoin vs some other cryptographic currency I pull out of my ass? The difference is culture and tradition, the dollar has tons, bitcoin... not as much. This is why the price of bitcoin fluctuates so wildly. Most people don't buy bitcoin to use as currency... the entire BC market is like a gambling house where people try to buy and sell paper from each other.

Don't get me wrong, I'm not saying don't buy bitcoin or don't support it... I'm just saying to be aware of what it currently is, and what it may transform into in the future...

> The dollar is backed by culture and tradition, the government has no control over whether or not you want to use or accept a dollar for goods.

The government has control through the legal system which is the ultimate recourse for dispute over payment of goods, and it exercises this control by assessing damages, when a dispute is resolved through the courts, in US dollars.

if bitcoin ever becomes currency, who says courts won't have power to enforce payment via bitcoin?

The main difference is inflating the money supply. The government cannot control the supply of bitcoin the way they do with green dollars.

> if bitcoin ever becomes currency, who says courts won't have power to enforce payment via bitcoin?

Bitcoin is currency.

What it is not is legal tender.

Courts in the US have the legal power to enforce payment in bitcoin or Euros or chickens or hours of service or any other form now. They also have well-established rules that they only do so in manners other than the legal-tender currency established by the government in certain exceptional cases.

I agree, except for the part where you say bitcoin is currency.

Most people will not accept bitcoin as a medium of exchange. I cannot go to my local grocery store and buy something with bitcoin. I can, however by something with dollars. Thus bitcoin is not yet a currency.

"If I make one hundred pieces of blue paper and I call it a currency and I start selling it to people" - This is what modern currency is. Pieces of paper issued by government.

Right, of course. But there's a difference. Why do you choose bitcoin over dogecoin? Why do most people choose the dollar over bitcoin?

Decades of culture and tradition have molded the dollar into something different from people just selling paper. Bitcoin is not yet such a thing.

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