Bitcoin as an Information Commodity
Bitcoin is very new. People are still trying to work out exactly what it is. What Bitcoin is now and what it will become over time may change. For now, according to a research paper from the University of Amsterdam, Bitcoin is best understood as a money-like information commodity (MLIC).
Commodities come about through a process of ‘commodification’. Commodification is the process of transforming entities into a class of entities that can be exchanged on a free market and which are paid for by money.
As a result Bitcoin may be considered a result of commodification, starting from digital monies that are still under state control (e.g USD, EUR, etc). Such monies seem not to meet the definition of a commodity because free market forces are not allowed to regulate their market value.
The phrase ‘ information commodity ’ is used for private information which is owned by an individual. The institution of ownership for that particular kind of commodity is called privacy.
Privacy indicates that commodities may be owned by an owner with the effect that all forms of access by non-owners are a breach of the rights the owner enjoys in virtue of his ownership. The use of informational commodity is justified in this case because there is a market for such information, even if privacy is about regulating and constraining that market.
Law and philosophy explains concepts like property, title to ownership, ownership of property, and possession. An MLIC can be in the possession of agents. Possession of a quantity of the commodity provides an agent with a number of capabilities that are self-explanatory from the perspective of a conventional functionality of money.
The extent to which agents can be owners of an item may vary from case to case. By speaking of an MLIC no commitment is made to a particular bundle of rights which is implied by ownership or possession of an item. Technically the same MLIC may exist in different legal regimes.
The researchers from the University of Amsterdam have provided an interesting and in-depth analysis. It is well worth the read. They coin MLIC (money like information commodity) as the preferred classification for Bitcoin.
This is after comparison to several other candidates for a preferred base type for Bitcoin.
The theory on Bitcoin is to allow for a systematic discussion of its development through all stages including an initial stage and a possible demise without being constrained by the implications of it being a money or a near-money.