Bitcoin Philosophy 101

Aristotle was a smart guy, as Jessica Alling of Motley Fool points out, and he knew a thing or two about money. Specifically, he applied his intense powers of logic to determining whether or not money is “good money.”


Alling applies this logic to Bitcoin. And the alt-currency does seem to fit Aristotle’s ideas.

First it’s durable. “Money must stand the test of time and the elements. It must not fade, corrode, or change through time.”

Bitcoin’s digital nature makes it long-lasting.

Second, money must be portable. A rock the size of a house may be valuable, but you can’t lug it everywhere you want. Bitcoin is mobile and can, basically, assume whatever value its members ascribe to it.

Third: Divisible. Since Bitcoin can be broken down into ever more discrete chunks, it is indeed divisible.

Finally, it has to be tied to something of value. Although Bitcoin is often criticized for not being intrinsically valuable, Alling says the currency does fit modern views of currency.

She says, “Though we are used to the idea that currency should be tied to something of worth, the gold standard was eliminated more than 40 years ago in the U.S. Ever since, the U.S. dollar has been a fiat currency, yet widely accepted across the globe. The only tie associated with the dollar is the good faith promise that its value will be honored. Since the value of Bitcoin is based on the user’s perception of its worth, it has a similar promise backing it among the peer-to-peer network that supports it. Taking a literal view of this last criterion, Bitcoin receives its last check mark on Aristotle’s list. But the discussion of whether Bitcoin is a good form of currency will continue, mainly hinging on the acceptance of this last point.”

So, it looks like Aristotle would give Bitcoin an “A” in an introduction to currency philosophy. I just hope that stupid Alexander the Great wasn’t leaning over your shoulder. What a cheater.