<p>It is not <strong>legal tender</strong>, and there is no one that's forced by law to accept it.</p>

<p>It is a digital token with the properties of money and (with the current state of computation) not possible to forge or to double spend. It is not backed up by anyone, but its users.</p>

<p><em>The users are the ones who give value to it</em>, and that's because bitcoin is useful.</p>

<p>Currently it is a very good way to make quick payments to individuals without bank accounts, can be transferred to anyone, including people that live in countries without support from payment companies (like those that live in countries that cannot accept paypal payments)</p>

<p>It is decentralized, meaning that you can't take it down by attacking only one entity. And there is no central authority that can alter the history of bitcoin transactions.</p>

<p>Instead of thinking of it like <em>fiat money</em>, you should think of it as digital gold, it is scarce, it is expensive to obtain and its value isn't backed by any government, is backed up by people willing to buy it and use it as a currency or a store of value.</p>

<p><em>Obs:</em> I edited the answer to clarify some points, but the accepted answer in <a href="https://bitcoin.stackexchange.com/questions/182/where-do-bitcoins-come-from-and-what-gives-them-their-value#answer-185">this</a> SE thread could give you a lot more insight on what gives value to it.</p>

CC BY-SA 3.0
2016-03-29T21:12:37.427Z
Going from the Wikipedia article on [Money](https://en.wikipedia.org/wiki/Money), I'm going to disagree with you: "Money is any item or **verifiable record** that is generally **accepted as payment** for goods and services and repayment of debts in a particular country or **socio-economic context**…" Bitcoin easily fulfills the "Medium of Exchange" and the "Store of Value" properties. I've seen it used as a "Unit of Account", although it isn't widespread in use for that.
Murch
CC BY-SA 3.0
2016-03-29T21:30:41.957Z
In the U.S. it is worth noting that the IRS does not treat bitcoin as money, current guidance says it should be treated as property and is taxed as such. This is different than how foreign currency is treated and taxed.
Mark S.
CC BY-SA 3.0
2016-03-29T22:39:20.687Z
@Murch, what I meant was that it is not legal tender. Nobody is forced by law to recognize the value of bitcoin. I agree that if a lot of people use something like money and that it has the properties of money then it is money. But a lot of newcomers don't have that intuition, and personally I believe that it is a lot easier to learn what bitcoin is to just say that it is not money, gold can be used the same way but it is not money for a lot of people.
galileopy
CC BY-SA 3.0
2016-03-29T22:59:47.730Z
@MarkS.: While I'm aware that the US is treating it as a commodity, several countries appear to treat it as currencies (e.g. Argentina, Australia, Luxembourg, Japan, Sweden). UK and Germany treat it as "private money".
Murch
CC BY-SA 3.0
2016-03-29T23:10:15.997Z
@galileopy: I see, yet, while yours is probably a good approach when you're engaging in conversation directly, I don't think we should conflate money and legal tender here, but rather make full use of their distinct meanings. If you worry that people can't distinguish the two, perhaps it's better to add a few lines to highlight the difference.
Murch
CC BY-SA 3.0
2016-03-30T00:27:06.810Z
@Murch that makes sense, I'll do that. Thanks!!
galileopy
CC BY-SA 3.0
2016-03-29T20:06:51.510Z
2016-03-30T00:37:02.147Z
2017-04-13T12:47:34.187Z
galileopy
<p>No, there isn't any authority. Simply, the node that mined new block adds new special transaction that says "miner has new 25 bitcoins to spend".</p>

<p>The network, accepting the new block, accepts this reward to miner.</p>

CC BY-SA 3.0
2016-03-29T15:40:30.883Z
2016-03-29T15:40:30.883Z
alessandro308
<p>Every time a hash is successfully created, a reward of 25 bitcoins is paid. Who pays this reward, and on what authority? How does this become legal tender? How is it not counterfeiting?</p>

<money>
How is Bitcoin money?
Graham Dyer
# How is Bitcoin money?

(Asked by: username_0 on 2016-03-29)

Every time a hash is successfully created, a reward of 25 bitcoins is paid. Who pays this reward, and on what authority? How does this become legal tender? How is it not counterfeiting?

**Tags:** money


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## 2 answers

### Answer by username_1 on 2016-03-29. Score: 1

It is not **legal tender**, and there is no one that's forced by law to accept it.

It is a digital token with the properties of money and (with the current state of computation) not possible to forge or to double spend. It is not backed up by anyone, but its users.

*The users are the ones who give value to it*, and that's because bitcoin is useful.

Currently it is a very good way to make quick payments to individuals without bank accounts, can be transferred to anyone, including people that live in countries without support from payment companies (like those that live in countries that cannot accept paypal payments)

It is decentralized, meaning that you can't take it down by attacking only one entity. And there is no central authority that can alter the history of bitcoin transactions.

Instead of thinking of it like *fiat money*, you should think of it as digital gold, it is scarce, it is expensive to obtain and its value isn't backed by any government, is backed up by people willing to buy it and use it as a currency or a store of value.

*Obs:* I edited the answer to clarify some points, but the accepted answer in [this](https://bitcoin.stackexchange.com/questions/182/where-do-bitcoins-come-from-and-what-gives-them-their-value#answer-185) SE thread could give you a lot more insight on what gives value to it.

> **Comments:**
> **username_2**: Going from the Wikipedia article on [Money](https://en.wikipedia.org/wiki/Money), I'm going to disagree with you: "Money is any item or **verifiable record** that is generally **accepted as payment** for goods and services and repayment of debts in a particular country or **socio-economic context**…" Bitcoin easily fulfills the "Medium of Exchange" and the "Store of Value" properties. I've seen it used as a "Unit of Account", although it isn't widespread in use for that.  
> **username_3**: In the U.S. it is worth noting that the IRS does not treat bitcoin as money, current guidance says it should be treated as property and is taxed as such. This is different than how foreign currency is treated and taxed.  
> **username_1**: @username_2, what I meant was that it is not legal tender. Nobody is forced by law to recognize the value of bitcoin. I agree that if a lot of people use something like money and that it has the properties of money then it is money. But a lot of newcomers don't have that intuition, and personally I believe that it is a lot easier to learn what bitcoin is to just say that it is not money, gold can be used the same way but it is not money for a lot of people.  
> **username_2**: @MarkS.: While I'm aware that the US is treating it as a commodity, several countries appear to treat it as currencies (e.g. Argentina, Australia, Luxembourg, Japan, Sweden). UK and Germany treat it as "private money".  
> **username_2**: @username_1: I see, yet, while yours is probably a good approach when you're engaging in conversation directly, I don't think we should conflate money and legal tender here, but rather make full use of their distinct meanings. If you worry that people can't distinguish the two, perhaps it's better to add a few lines to highlight the difference.  
> **username_1**: @username_2 that makes sense, I'll do that. Thanks!!  

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### Answer by username_4 on 2016-03-29. Score: 0

No, there isn't any authority. Simply, the node that mined new block adds new special transaction that says "miner has new 25 bitcoins to spend".

The network, accepting the new block, accepts this reward to miner.


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