In the past year, discussion of Bitcoin as a currency or money has overtaken an earlier paradigm in which Bitcoin began to be interpreted as beyond money and currency. Like many argue that the US Constitution was written in an earlier time, say “before automatic weapons” or “equality,” and thus making it irrelevant, many individuals have noted the ways in which Bitcoin is actually a part of a paradigm outside the purview of money and currency. While containing most, if not all, of the characteristics of Aristotelian money, it also portrays Platonic interpretations of what money is, such as that the value of currency should independent from the material with which money was made. Thus, Bitcoin is both conservative and progressive all at the same time.
Instead of being seen as currency and/or money, Bitcoin can more accurately be seen as the distributed application architecture that partitions tasks or work loads between peers. Once a p2p exchange comes online – and many programmers do believe such an achievement is possible – this will be truer than ever. This p2p exchange will transform a large part of the Bitcoin network into a near network of equally privileged, equipotent participants in the application. These participants will support a peer-to-peer network of nodes. Uncommon to the p2p world, Bitcoins’ nodes will not all be made equal. Nonetheless, with the support of p2p exchanges, Bitcoin begins to resemble a pure p2p network (assuming a p2p exchange is developed.), and more accurately, a futuristic p2p network.
The Bitcoin QT client gives Bitcoin a p2p dynamic, insofar as it allows all participants to make a portion of their resources, such as processing power, disk storage or network bandwidth, directly available to other network participants. Reflective of the Bitcoin network QT is designed to mediate, this is done without the use of central coordination by servers or stable hosts.
In a p2p exchange network setting, all participants would act as both suppliers and consumers of Bitcoin resources.
Bitcoin stands not only to tap into file sharing and p2p networks, but in fact tap into the future of these rather new advents. In astonishing display of the pace of change in the internet age, the future of p2p systems encompasses collaborative themes going beyond peers doing similar tasks while sharing resources, and instead seeking diverse peers that bring unique resources and capabilities to a virtual network, and engaging such participants in greater tasks beyond those that can be accomplished by individual peers, yet that are beneficial to all the peers. This is the sort of p2p exchange Bitcoin stands to become.
So, whilst propelling us into the future, Bitcoin also takes us back to square one: in the context of exchange, Bitcoin has, in some ways, brought us back to “sharing” – that is, file sharing. The practice of distributing or providing access to digitally stored information, like computer programs, multimedia, documents and electronic books is common. This is what Bitcoin is: the sharing of digitally stored information. And, because Bitcoin is a) not an overtly accepted medium of exchange and b) not even predominantly shared amongst what government terms “users”, Bitcoin is not money or currency, and thus is not a financial instrument.
It therefore depends on the future of the Internet, and the Internet alone. Will all sharing of digitally stored information become a matter of public knowledge, with individuals having absolutely no right to privacy via computers and smart phones, etc? Will p2p networks become outlawed?
Using widely available open source software, and the voluntary contributions of globally located nodes and users, the p2p network that is Bitcoin is beyond money and currency. It can be used in exchange for certain things, like money, but so can logins for online paid services. And moreover, most people are merely holding onto bitcoin’s expecting that they will still be around in the future. That is their bet, and their bet alone, and it has very little to do with dollar value. When one holds onto a stock or bond, it is for monetary gain. This cannot be argued of the average Bitcoin user. One could hold onto a folder of thousands of downloaded albums, betting that their value will rise in the future. Both parties would probably be right. But, this makes neither of the digital packets (either the albums or the BTC) money.
It’s just a new kind of sharing, everywhere, all at once.