Tuesday, March 11, 2014

Bitcoin and Its Referents

The term 'Bitcoin' is used in different ways, which can cause confusion. For the sake of clarity below I list the six different types of things the term 'Bitcoin' refers to, and then describe how these relate to each other. 

What does 'Bitcoin' refer to?
(1) bitcoin [lower case] is a currency.
- Used in a sentence: 'Some say that because bitcoin is deflationary it cannot succeed.'
- Other examples of currencies are the dollar and the euro.

(2) A bitcoin [lower case] is a currency unit.
- Used in a sentence: 'I have two bitcoins in my MtGox account.'
- Other examples of currency unit are dollars, pennies, euros and cents. 

(3) Bitcoin [upper case] is a p2p (=decentralized and distributed) computer network.
- Used in a sentence: 'Because Bitcoin is decentralized it will be difficult for governments to take down.'
- Other examples of (p2p) networks are the Kad network and the eDonkey network.

(4) Bitcoin [upper case] is a p2p payment system for bitcoin the currency.
- Used in a sentence: 'Double spending is impossible in Bitcoin.'
- Other examples of payment systems (for other currencies) are banking systems, PayPal and credit cards.

(5) Bitcoin [upper case] is an open source cryptographic protocol.
- Used in a sentence: 'People are building applications such as currency exchanges and smart contracts on top of Bitcoin.'
- Other examples of protocols are TCP, IP, SMTP and BitTorrent.

(6) Bitcoin is a technology.
- Used in a sentence: 'Last year Bitcoin beat the Apple A7 processor, node.js, Planet Labs and Project Loon to win the award for Best Technology Achievement.'
- Other examples of technologies are hammers, cars and iPhones.

No Other Referents
'Bitcoin' has no other referents. There is for example no such thing as Bitcoin the software. The term for the original software written by Satoshi (and since updated) is Bitcoin-QT. 

Moreover, while there is definitely such a thing as the Bitcoin community we don't refer to it by the single word 'Bitcoin'. So it wouldn't make sense to say something like: 'Google's announcement today caused a lot of excitement in Bitcoin.' Instead we'd say something like 'Google's announcement today caused a lot of excitement in the Bitcoin community.'

How do these six things relate to each other?
We can say that Bitcoin is a revolutionary technology that consists of Bitcoin the (open source cryptographic) protocol that operates on Bitcoin the (decentralized and distributed) computer network, which instantiates, maintains and secures Bitcoin the p2p payment system that lets people send and receive bitcoins which are units of bitcoin the currency

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