Bitcoin is the most famous virtual currency. But is it just a currency? Not if we stick to the classic definition. Explanations. By Jacques Baudron, Paris Sud University - Paris-Saclay University From the top of its fragile highs and lows, bitcoin dominates the poster for several months. But, we warn, bitcoin has no intrinsic value, and virtual currencies are not receivables. What does this statement mean? To find out, one must first understand why a currency is a debt.
The first claims, stories of goldsmiths During the first half of the seventeenth century, goldsmiths are among the few trades able to fight headaches. They are equipped, for their activity, strong safes. The wealthy merchants, who are particularly vulnerable, have therefore quickly solicited them to shelter their precious metals. The case is obviously not free: it is against a recognition of nominative debts and, of course, fair compensation for the service rendered. Upon presentation of this paper, all or some of the precious metals deposited could be withdrawn.
As things evolve, IOUs become anonymous and only mention the amount of gold required in return. IOUs being much easier to handle than gold, they are quickly preferred for trade in goods or services. These notes, exchangeable for the mentioned gold weight, constitute receivables.
Goldsmiths have permanently in their trunk of gold reserves that sleeps. Businesses in turn seek funds for the development of their activities and both parties quickly find common ground on the basis of notes-recognitions of debt identical to those of the depositors. These recognitions of debts have an ephemeral life: they are destroyed as soon as the debt is released.
Establishment of the monetary creation mechanism Goldsmiths are quick to note that gold goes in and out but the level of stocks does not fall below a certain threshold. Statistically, not all borrowers present their debt acknowledgment at the same time. Hence the idea of offering more IOUs than there is gold. The total amount on the issued IOUs is greater than the gold weight of the guarantee. There is a risk of being unable to cope with an influx of claims, but it is visibly measured as the system grows. That said, the model set up to replenish the post-Louis XIV period by John Law nevertheless showed in 1720 that a simultaneous request from all users is not just theory!
The monetary creation mechanism is born. When a trader borrows, he collects his notes printed by the silversmith. The sum is reported in the registers. Debt notes are issued, and the gold level in the coffers does not change. The merchant uses these notes-certificates to pay his suppliers, who will use them in turn to pay employees, who can themselves use them to buy bread and so on. The currency circulates, and all these exchanges have as their point of origin a simple writing in a register ...