Woah woah don't freak out everyone...jeeze anyone who raises concerns about our project is insta-shunned, its madness I say.
He is actually just restating the Mises Regression Theorem (we all love Mises, right?)....the 'seed value' Mosler is looking for (ie the "final demand" or "the thing that you can only buy with BTC and nothing else"), exists in several places, namely low-cost/instant international payments, unfreezable accounts, inflation-proof, etc.
Yeah, but those are monetary properties. It sounds like he's saying that the "seed value" has to be either (a) the state forcing you to pay taxes in the currency or (b) a non-monetary use for the commodity. But it seems to me that the supposed requirement for a "seed value" is just an acknowledgement of the bootstrapping problem that confronts any new would-be currency. Money relies on network effects. If a commodity has not yet come to be accepted as money and it also doesn't have any non-monetary usefulness, why would anyone ever be the first person to trade their goods or services for it? The answer is simple: speculation. People first assigned value to bitcoins because of its incredible monetary properties. They reasoned that other people would also come to appreciate those properties and value bitcoins for the same reason. And they were right. You can now trade other currencies for bitcoins on an open market. And you can also use them to buy many goods and services directly. So... does a currency need a "seed value" of the type described above to become valued? No. It's an empirical question, and it's now been answered. So I just don't get how anyone could still be hung up on this issue.
I would actually argue that:
1) There must be seed-value pre-speculation (ie, WHY will this thing retain or increase its value).
2) A "non-monetary use" would INCLUDE (a) taxes [and a solution to the network-effects-coordination problem (of which, again, one solution would be taxes)], making that somewhat redundant.
3) Therefore, money does require seed-value to become valued.
And, even though I agree with your insight, that the seed-value might need to be non-monetary, its pretty irrelevant because I completely forgot to mention
silkroad.
In fact, in (subconscious?) conformity to the regression theorem, I personally thought bitcoins were a strange scam until I read the SR wired article, at which point my opinion changed completely.
I'd REALLY like to see someone bounce silkroad off of Mosler as a source of final demand. That would likely change his mind (and we would have a new ally). I'll do it if no one else will, but I've never been in contact with him.
Or you can all continue to make fun of someone via pseudo-anonymous internet post that no one will see. I has hear that help teh bitcoin.
