Topic: GoldMoney [FB post]: James Turk in conversation with Félix Moreno de la Cova - page 6. (Read 14827 times)

Except that Bitcoin is all of that (quantum electrodynamics) and more being an abstraction running on top of it (gold, silicon, copper, etc.).

So Bitcoin fits into the Regression Theorem and the Emerging Order theory, yet the mainline Mises/Hayek crowd is still hesitant. Maybe they're waiting for the government to give Bitcoin its imprimatur?

i actually tried to put up a comment request yesterday but couldn't get their commenting function to work.  i'll try again.

Felix also mentioned Hayek's theory of Emerging Order which fits Bitcoin to a tee:

Hayek’s key insights included a recognition that, because knowledge is dispersed and depends on time, place, and context, no central authority could acquire all the knowledge required to plan an economy. He also sought to better understand a phenomenon first identified by philosophers of the Scottish Enlightenment – that of spontaneous orders. Many orders such as languages, Hayek noted, are not constructed by a central authority. Instead, millions of individuals acting on their own create an ordered way of communication with one another.

If one thinks about it, the quantum electrodynamics which are responsible for the physical properties of a the gold in a Krugerrand and lend it some of it's strength as a monetary instrument are every bit as conceptually challenging as the mathematics and cryptographic algorithms which do the same for Bitcoin.  Vastly more-so I would suggest.

Perhaps you could nudge them?

I have an interview lined up to be released around the first week in October with a finance/economics blog that does about 10m visitors per year and the author interviewing me recently gave a speech at the NY Fed. Hope I can handle the heat! Going to be fun exposure for Bitcoin either way.

sunnankar:  get yourself on Capital Account.  she's cute too. 

This is the obvious synergy between GoldMoney and Bitcoin.  Turk needs to add Bitcoin as both a deposit/withdrawal mechanism as well as simply another "hard-commodity" offering alongside gold, silver, platinum, palladium.

Thanks for that. Basically bitcoin would be just another digital commodity within the network, with better properties as money. Interesting thought

Considering MtGox has, as of August 2012, 192,270 registered accounts with 15,391 active in the last 30 days (about the same size as GoldMoney's 22,349 customers), and has grossed about $525,000 from Jan-Aug 2012, surely Mr. Turk cannot be so dense as to not sense the tremendous business opportunity; particularly given the relatively low cost of implementation because of GoldMoney's current system of AML/KYC, etc. already in place.

Plus, given all the negative experiences MtGox customers have had they could use a good competitor.

+1

Yes, pre-existing commodities/assets have been re-organized into a new form (the essence of entrepreneurship) to create a new commodity that is valued in the marketplace.

Mr. Turk's logic is twisted; particularly in the interview. He asserts, "Bitcoin is not a tangible asset. ... A financial asset has counter-party risk." This is probably because he conflates definitions and has incorporated a factor and treated it as an element.

The issue is whether either corporealness or scarcity is an element for tangibility?

If I were in the interview I would have retorted and reframed it, "What is tangible? Does something have to be corporeal to be tangible?"

Then I would have used his own words against him. He asserts that Goldgrams are tangible as they represent ownership of the underlying tangible and corporeal asset, gold. But the legal construct of ownership is incorporeal; and some may argue not even tangible, or at least not as tangible as the realness imparted by the physics and chemistry sciences, because it is not based on something real (laws of men).

From one of my earlier posts:

"The word tangible means 'perceptible by touch' or 'clear and definite; real' but the etymology for tangibility has more to do with mental sense than corporeal status. It appears to be used to connote realness as opposed to fantasy, delusion or illusion.

I have been thinking a lot about tangibility and how it applies in monetary science in an attempt to formulate a rule or theorem.

In the Information Age I think organized information, information objects, can have properties of tangibility just as clear and definite, or real, as physical objects. Thus, for something to be real it does not have to be corporeal.

The Bitcoin Magazine exists in both a corporeal (paper) and incorporeal (PDF) form. Both are both clear and definite thus they are equally real. One is an information object the other a physical object. But this distinguishment does not go to tangibility as they both exist in the real world and are not figments of imagination, fantasy, delusion or illusion. We would agree that the Bitcoin Magazine Issue #1 is tangible, regardless of paper or PDF form, and flying fire breathing black dragons are not tangible. Indeed, a bitcoin may be more tangible than a Goldgram because bitcoins are backed by the laws of mathematics while Goldgrams are merely backed by the laws of men (transfer of 'ownership').

Then Mr. Turk adds counter-party risk and payment risk in a discussion about financial assets. But Bitcoin is not a financial asset, at least not if those two risks are elements, as bitcoins have neither counter-party nor payment risk and if he thinks it does then he does not understand the 'double spend solution' as well as he thinks he does. The software solution to the double spend issue limits bitcoins while technology has the potential to synthesize precious metals, like gold, through nuclear transmutation or electricity or space is another example. Thus, using Mr. Turk's logic you could have things which are tangible but not scarce and things which are not tangible yet scarce.

A bitcoin is real because it has clear and definite organization of information therefore making it an information object in the real world and is not a figment of imagination, fantasy, delusion or illusion. Bitcoins are not subject to counter-party risk and there is not payment risk so long as the Bitcoin network is functioning. Bitcoins exist solely as organized information. Therefore, a bitcoin is tangible but not corporeal.

Thus, the argument can be summed up as Bitcoin:Gold::math:physics/chemistry.

At least, that is a rought draft of the argument and why the use and definition of words is so important for the communication of ideas.

Here's another take on the "regression theorem" in this context:

Bitcoin: A New Commodity Created To Serve Market Demand
http://economicsandliberty.wordpress.com/2011/06/22/bitcoin-a-new-commodity-created-to-serve-market-demand/

watch the interview again.  Turk did ask him how one would become an exchange for Bitcoin...

"Debt is money" is apparently a strong one.

yep.  b/c that graph indicates net debt destruction which will paradoxically drive UP the value of the remaining USD's in the system.

Some nam-shubs are hard to recover from.   

As I understand Mises's regression theorem per Rothbard:


Bitcoin follows the theorem perfectly if it's perceived in its environment: the network. TCP/IP itself has already been commoditized long ago and IP addresses, domain names and network access themselves are all commodities.

Bitcoin is a natural evolution of the network and trading on it, just as gold, silver and seashells were natural progressions of trade in the meatspace.

The best way to approach this fallacy is to dig a bit deeper and ask if he thinks gold coins are money around the world because they are tangible. If you dig deeper you see it has nothing to do with it's tangibility but rather it's history of having value, the properties it has and utility value it has, a gold coin that is. A counter could be that tomorrow we could discover another tangible element with far better qualities and properties suited for the role of money that could make golds value plummet due to having an inferior quality as money or we could find that it's easy to mine asteroids for gold and gold looses it's property of being scarce again rendering it less useful as money which could make it's value plummet.

So tangible has nothing to do with it being accepted as money and therefor it's irrelevant. What is relevant are the utility value and it's properties and history of course which are all aspects of money bitcoins can match and/or surpass gold's performance at.