[Ifroham4]

Thailand has become the first country to ban bitcoins after the central bank ruled it is not a currency.

In a statement on its website, Bitcoin Company Limited said it had given a presentation to the Bank of Thailand about how the currency works in a bid to operate in the country.
However, at the end of the meeting, "senior members of the Foreign Exchange Administration and Policy Department advised that due to lack of existing applicable laws, capital controls and the fact that Bitcoin straddles multiple financial facets... Bitcoin activities are illegal in Thailand".
The ruling means it is illegal to buy and sell bitcoins, buy or sell any goods or services in exchange for bitcoins, send any bitcoins to anyone outside of Thailand, or receive bitcoins from anyone outside the country.
Bitcoin said it "has no choice but to suspend operations until such as time that the laws in Thailand are updated to account for the existance [sic] of Bitcoin", adding that "the Bank of Thailand has said they will further consider the issue, but did not give any specific timeline".
Launched in 2009 in the wake of the global financial crisis, bitcoins are "mined" using complex computer source code. The virtual currency started as a relatively niche method of payment, devised by an anonymous programmer, but can now be used for anything from online gambling to pizza delivery.

[Slonopotam845]

This ban will be just about as effective as if they were to ban email. LOL

[softy54534]

The ban will be effective for legitimate businesses that use bitcoin, and probably your average person that uses bitcoin.

Of course, others will simply circumvent it.

[S.T.D.]

The ban will be effective for legitimate businesses that use bitcoin

Haha, like any legitimate physical business uses bitcoins.

[Beerinkol]

Well do you mean physical as in brick'n'mortar store? Or what?
Because a lot of decent sized companies accept bitcoins. Also I have recently seen articles about a bunch of little tech-minded companies accepting them for their physical location like a printer in Chicago.
Wordpress
Humble Bundle
Reddit
OkCupid

[Ifroham4]

I mean physical as in sells physical products, something you can hold. Because all of those don't sell physical products. Yes you can buy hardware from some sites I believe but you can't really do anything substantial like by food or pay the bills.

[tgs]

There is a site that will order you pizza for bitcoins

[NeroASERCH]

I mean physical as in sells physical products, something you can hold. Because all of those don't sell physical products. Yes you can buy hardware from some sites I believe but you can't really do anything substantial like by food or pay the bills.

Yes you can. You can even lease apartments with them in some places. There's examples, small amounts of them sure, but examples of everything from bars to restaurants accepting them.

[brraverishhh]

ugh, any contract with bitcoins would terrify me. Look at that huge crash. A landlord would be out a lot.

[9mm_fan]

You can insulate yourself from the fluctuations in value. There are services that let you price in dollars but pay in bitcoin.
Interestingly, although Bitcoin has had crashes, the lowest point it reaches has been around October-November but always higher than the same low point in the previous year. That's not to say that is an indication of the long term trend, but it carries a similar weight to any speculation based upon looking at the crashes.
Long term, Bitcoin is either worth lots or next-to-nothing.

[softy54534]

Why not just treat it a as commodity then?
Is there any law that prohibits me from paying for things with other things as opposed to money?

[Slonopotam845]

you just cracked the system with this question.

[S.T.D.]

Out of curiosity, what exactly defines what a currency is?

[Beerinkol]

We do.

[Ifroham4]

In Thailand, apparently the central bank of Thailand.

[tgs]

There's a lot of economic theory that goes into defining a currency. The four generally accepted requirements of currency are:

medium of exchange - can use it to trade for goods and services
unit of account - can use it to measure and compare values across different goods and services
store of value - holds its value over time

This is a more classical definition. In modern times, currencies are tied largely to the political unit (every currency except the Euro for the most part). Each country defines, prints, and manages its own currency.

This is because of the widespread usage of fiat money (currency that is not backed by any commodity, and therefore must be backed by the declaration of a government or organization). Basically the currency must be guaranteed by something, and in most cases it is guaranteed by the future economic power/relevancy of the country that is backing it.

For most countries, this power is put in the hands of that country's central bank, because it has been observed that if you put that power in the hands of the politicians, they will cave into the temptation to create money in order to maximize short-term gain, which will create inflation and eventually destroy the value of that currency, which usually causes wholesale economic downfall.

Generally speaking, the more politically independent the central bank is, the better it is for the stability of a currency.

[NeroASERCH]

Generally speaking, the more politically independent the central bank is, the better it is for the stability of a currency.

Sounds like that should make bitcoin the most stable currency ever since it's central bank is a distinctly a-political mathematical algorithm..

[NeroASERCH]

Generally speaking, the more politically independent the central bank is, the better it is for the stability of a currency.

Sounds like that should make bitcoin the most stable currency ever since it's central bank is a distinctly a-political mathematical algorithm..

[brraverishhh]

That does have a stabilizing effect on the price, but other intrinsic traits of Bitcoin make it very very unstable.

Bitcoin is not guaranteed by anybody.

The value of the dollar is in many ways guaranteed by the idea that the US government is responsible for (and intrinsically tied to) its value. Bitcoin doesn't have any agency or economic engine or source of production that guarantees its value.
You might hear that Bitcoin and fiat money have the same amount of backing, but I think that's a disingenuous argument. The dollar has the backing of an entire code of laws, most importantly, tax law. That tax law turns economic output of the US and it's citizens into revenue, which is the engine that generates the dollar's value. Bitcoin doesn't really have anything close to the same support system, which is why it's value fluctuates wildly based on people's perception of it's future value.

Bitcoins are designed for deflation, and deflation is bad.

Deflation is a bad thing for modern economies. Here's(Greg Mankiw's Blog: 2008 = 1929?) a Greg Mankiw blog post that I think lays it out pretty well. The real effects are way more nuanced, but I think the basic concepts are pretty accessible. The two mechanisms he lays out are the debt-deflation relationship and the effects of expected deflation.
Inflation is a very helpful lubricant for a currency over time, especially ones in growing countries (both in terms of population and economy).

[9mm_fan]

Out of curiosity, what exactly defines what a currency is?

You want a currency to be easily liquifiable, easy to distribute and make sure it becomes universally utilized. In the end, all currencies are artificial, but these days, most currency is anchored to a state or government's rules. You other forms of currency such as MS points (going the way of the dodo) which are limited in their use. Your air miles from a credit card are also a sort of currency but they aren't a universal currency. I'd imagine bitcoin isn't an attractive currency because you can't "print more" bit coins if needed. Also, they don't directly represent the amount of resources produced and services traded in a country or in the world.