This is a guest post by David Orrell, a mathematician and author of books including Truth or Beauty: Science and the Quest for Order (Yale University Press). He is currently working on a book about money.
“I do not understand where the backing of bitcoin is coming from. There is no fundamental issue of capabilities of repaying it in anything which is universally acceptable, which is either intrinsic value of the currency or the credit or trust of the individual who is issuing the money, whether it’s a government or an individual.” — Alan Greenspan
Is bitcoin money? To most readers the answer will be a resounding yes, but to many people, including former Federal Reserve Chairman Alan Greenspan, the answer is less clear. Indeed, one of the things holding back the adoption of cybercurrencies such as bitcoin is that they do not conform with traditional ideas about money.
Bullionists, for example, argue that money needs to be backed by precious metal – and bitcoin is not. Chartalists (from the Latin charta for a record), on the other hand, assert that