While there is a great deal of insight in the Austrian definition of money, that does not disprove that Bitcoin is, or will be used as, money.
After all, the market may price bitcoins high today but even if they drop tomorrow, as long as they stabilize, they can be used as money.
Although it is true that whatever is the most liquid asset in the system becomes money, often that asset is liquid because of local law enforcement. Which is the case with fiat currencies.
Most money today is credit money. Bitcoin is not credit-money. The "underlying value" of bitcoins is not what's relevant. What's relevant in decentralized situation is the value TO SOMEONE of an asset is what they can trade it for of genuine use to them. So the value of a bitcoin today may be limited to speculating with it. But as more merchants accept bitcoin and the market is saturated and brings diminishing returns, the value of the bitcoin will stabilize.
Similar things happened with rapidly growing social networks, like Skype or Facebook. Those are the economics at play here. Initially maybe Facebook was a way to just put up your profile, because not all of your friends were on it. But eventually it became the way to stay in touch and update your friends on what's happening, because enough of your friends used it that it became useful.
When enough people trust bitcoin to accept it as money, then it will become money. Until then, the jury is out. But the network effect only grows stronger with the number of users...
After all, the market may price bitcoins high today but even if they drop tomorrow, as long as they stabilize, they can be used as money.
Although it is true that whatever is the most liquid asset in the system becomes money, often that asset is liquid because of local law enforcement. Which is the case with fiat currencies.
Most money today is credit money. Bitcoin is not credit-money. The "underlying value" of bitcoins is not what's relevant. What's relevant in decentralized situation is the value TO SOMEONE of an asset is what they can trade it for of genuine use to them. So the value of a bitcoin today may be limited to speculating with it. But as more merchants accept bitcoin and the market is saturated and brings diminishing returns, the value of the bitcoin will stabilize.
Similar things happened with rapidly growing social networks, like Skype or Facebook. Those are the economics at play here. Initially maybe Facebook was a way to just put up your profile, because not all of your friends were on it. But eventually it became the way to stay in touch and update your friends on what's happening, because enough of your friends used it that it became useful.
When enough people trust bitcoin to accept it as money, then it will become money. Until then, the jury is out. But the network effect only grows stronger with the number of users...