In the article Forbes regurgitates two neoclassical myths - first, that money evolved naturally out of barter systems, and second that money is an expression of fixed material values grounded in processes of production.
On the first point, there is no evidence in history that money evolved out of barter systems, and a great deal of evidence that it did not. As the anthropologist Caroline Humphrey says:
No example of a barter economy, pure and simple, has ever been described, let alone the emergence from it of money; all available ethnography suggests that there never has been such a thing. (Quoted in David Graeber, Debt: The First 5,000 Years).
David Graeber adds to this:
We did not begin with barter, discover money, and then eventually develop credit systems. It happened precisely the other way around. What we now call virtual money came first. Coins came much later, and their use spread only unevenly, never completely replacing credit systems. Barter, in turn, appears to be largely a kind of accidental byproduct of the use of coinage or paper money: historically, it has mainly been what people who are used to cash transactions do when for one reason or another they have no access to currency. (David Graeber, Debt: The First 5,000 Years)
On the second point, Forbes' asserts that money is "optimal when fixed in value", that "money has only one purpose ... buying and selling products", and that it is a fixed unit on the same order as material units (ala "hamburgers"). Here he is recanting the whole neoclassical bible, which states that economics and politics are separable, that government should stay out of economics or (our future standard of living will suffer), and that money is a natural expression of processes of production grounded in material value.
The castle of neoclassical theory is, however, far from complete, as the 2008 crash so clearly demonstrated. Worse, Forbes ignores this and continues to repeat neoclassical tenets as though they are fact.
Take Forbes statement that money is "optimal when fixed in value." At the limit case, this is clearly false. Assuming for a moment that money could be fixed in value, like a kind of physical unit or a determined expression of material value. Of course, this raises two issues: First, there is the problem of which material value to anchor to. Then there is conversion problem: how do we convert all other values into this fixed material unit? Assuming these could be solved, this would suggest that prices remain constant, much the same way the speed of light remains constant. How then do you explain profit, or any market at all for that matter? Clearly, Forbes must allow for at least some level of price setting, which then in turn suggests variability or "floating" of pecuniary value. Unsurprisingly, in empirically terms, no modern democratic currency is based on fixed values. The opposite is the case: currency itself is treated as a commodity that can be bought and sold on markets, and this is only possible because money does not have a fixed value.
But if monetary value is variable and not linked to material goods, what are the units of money? The answer, in neoclassical terms, is to base definitions of money on a fictitious unit, the util. Since the util is abstract and not observable directly, there remains the problem of how to measure it. Current definitions are claimed to be "reasonable" and "generally accepted" but economists. But utils remain an idealization, and hardly the known unfloating physical quantity Forbes suggests. Forbes simply glosses over or ignores the of the uncertainties and shortcomings of marginal utility theory. Nitzan and Bichler make this case convincingly in their excellent if controversial Capital as Power. They summarize:
Neoclassical theory remains an edifice built on foundations of sand. The most questionable of these foundations is the notion that capital is a material entity, measurable in physical units and possessing its own intrinsic productivity. In fact, capital fulfils none of these requirements. The result is that the theory is unable to convincingly explain not only the structure of prices and production, but also the distribution of income which supposedly results from such structure. (Nitzan & Bichler, Capital as Power)
Following B&N's argument leads to two conclusions. First, a better title for Forbes's article is "Bitcoin: Whatever It Is, It's Not Money, Whatever That Is!" Second, Bitcoin is actually (and more uncomfortably) precisely what money is: nothing but capitalization, which in turn is an expression of power. The volatility of Bitcoin is then purely a reflection of its limited access to power, and not, as Forbes claims, because it is without a material unit or a fixed value.