Topic: [2015-11-24] Jeffrey Tucker on Bitcoin "From Bitcoin Skeptic to Evangelist" (Read 605 times)

It's doing a fine job. Gradually removing some of the less well performing components (block storage & mempool) + bugs from the original implementation (the various malleability attacks and the mempool flooding stuff) has been laborious for the github contributors, but they're really beginning to get there with the upcoming release. I hope that with pruning mode now working wit the wallet, plus lots more work on regulating messaging over the network much better, the main client should be that little bit more usable again.


It's true, you can try to make an assessment as to money qualities purely on an objective basis and fail. Platinum is rarer than gold, and exhibits similar or equal physical/chemical resilience, but I think I'm right in saying that being so rare actually works against it for use as money (and it's certainly true that the concept of platinum as money has never really caught on).


I've thought about this too; the awkward example I came up with is collectibles. People into are into all number of specificities of baseball cards or coins or stamps or comic books, and each individual collectible (as such that friends and acquaintances are aware of one another's collections) carries a peculiar context dependent currency, in that an actual opportunity to trade for a given piece is within reach (and the notion can even form a part of the relationship between parties).

The money systems that emerge naturally in prisons is another good was to illustrate the psychological/"game" nature of money; people in prison that do not smoke will acquire cigarettes if they need to trade in a cell block where cigarette's are the dominant currency (and the thought of using the cigarette for it's manufactured purpose does not cross their mind).

So it seems like money status is a peculiar kind of demand driven status, attained by crossing an unknowable threshold in desirability (and strictly in the eye of the beholder). And it often comes with another slightly strange property; the holder frequently appreciates the trade value, and not the purpose value (which is paradoxically how a given item attains it's value as a trading instrument to begin with....     )

This isn't my field, for sure, but here goes.

I can't think of any counter to your point "it became money before it had any previous price value for any other purpose" other than Tucker's network/blockchain gambit. How much of Mises' work would unravel (if any) as a result? (I have no idea).

On a much more mundane scale, I quibble about the relevance of the raison d'etre and designer intent, perhaps using hindsight about smart contracts and such, but you're right that BTC certainly seemed intended for use as money. As an aside I think BTC is working spectacularly well as money in these early days - warts and all, given that it is not propped up by government coercion, and I thus infer with relief that government coercion is not a necessary property of money.

Your notion "the network had a perceivable value for use as money, but the value was qualitative, not quantitative" is useful, but, I fear, could be applied to anything known to have been used historically as money. It would have descriptive value (good) but not much predictive value (better).

Presumably the essential property of "money-nature", if it exists, must be something external to the money itself, something purely situational/psychological/social, but then the fun begins - does it take one person, two, or a million to buy-in before the entity is "really" money? Is it still money if the people who used it as money are gone? Is it still money if a government forbids its use? Does something that is not money become money if a government mandates its use as money? On and on. Heh - let's go down to the Economics Lab and see what we can replicate.                 

 

To me, this is all brilliantly illustrative of the paradoxical nature of money. Because "money" value is a total abstraction, it only attains a valuation when the first trade is made involving any such instrument. It was Bitcoin's clear value as a transactional instrument that facilitated it's first trade; no surprises there, as it was designed to promote that behaviour.

So I'm going to try to delineate a subtlety properly: the network had a perceivable value for use as money, but the value was qualitative, not quantitative. You can describe the motivation that sold those 2 pizzas for 10,000 BTC, but you can't put a price on it. And since the notion to make the deal necessarily came before the deal was struck, I think you can reasonably conclude that the metaphorical egg in this case definitely did exist before the consequent chicken. 

I can't help but reject the idea that the network, whose entire raison d'etre depended on attaining a market value, can skip Mises' step for having a previous market price (or the "value" synonym that Mises himself used) in order for it to emerge as a form of money accepted by the market. Not when the medium has been consumately designed to be used as money, and was never used for anything else.

And so I would argue that the literal opposite to the effect described by Mises Regression theorem was demonstrated with Bitcoin's entrance into the marketplace: it became money before it had any previous price value for any other purpose, precluded by it's design for the purpose of money.

Thanks, Carlton. I'm thinking that the Regression Principle issue may be an "eye of the beholder" thing. Tucker seems to have satisfied himself that it's a fit by looking at Satoshi's position and concluding "The innovation here, even according to the words of its inventor, is the payment network, not the coin. The coin or digital unit only expresses the value of the network. It is an accounting tool that absorbs and carries the value of the network through time and space."

https://tucker.liberty.me/bitcoin-and-misess-regression-theorem/

Certainly without some such escape mechanism BTC appears to invalidate the Regression Principle, and I'm scared to think about what might follow from that.     

I like the notion that the underlying value is "the network" or "the blockchain", but of course I am wary of how the bankers appear to be trying to distort/interpret that notion recently. I'm also acutely aware that I might have overlooked something important - I just dabble in Mises-world, and am usually easily persuaded by Tucker's reasoning.

Didn't one of the bitcoin big shots give FEE 10k coins during the last peak? That said, I've heard Tucker on Free Talk Live many times over the last few years talk about how wonderful bitcoin is and how it changed his life. I love listening to him speak cause he has that super intellectual tone to his voice.

I like it, the opposite of which is always difficult with Tucker. I don't agree where he maintains that Bitcoin adheres to the Regression Principle; it doesn't, it invalidates it  . Sorry Mises.  Great stuff though, thanks aigeezer.

http://fee.org/anythingpeaceful/tucker-on-bitcoin-from-skeptic-to-evangelist/

"Satoshi’s White Paper should be reread every few months."