Topic: Is Bitcoin money? An analysis from the Austrian school of economic thought (Read 2943 times)

I've not read everything but what I have read is not bad at all.  I was rather hoping to see some detailed economic analysis of the block generation system but I imagine what I'm looking for is beyond the scope of an M.Sc.  This was more of a literary review, and a reasonably fair and thorough one at that.  Some quick notes:

Page 18: What do you mean by:
I would certainly consider bitcoins property.

Page 41: laszlo bought 2 pizzas for 10 000 BTC: thread and pics.

Page 72: It's not clear to me what point you are making with:

Page 75: Chapter 9 seemed to me to carry a political bias which did not keep with analytical nature of the work up to this point.  I draw attention in particular to a sentence from page 78:
It appears that the necessity of regulation is taken as axiomatic and a case is only made for light regulation versus heavy regulation (please correct me if I'm wrong; it's late).  To clarify, I wouldn't expect you to apply a libertarian ethos to this section simply because this is an Austrian perspective, but would hope for something more politically neutral and broad minded where the notion of a state not regulating Bitcoin activity at all is entertained.

Can I just say this exactly why I find it annoying when people try to be clever using complicated words like fallacious and ad hominem without actually fucking researching properly what it really means or conveniently ignoring the fact that they're doing it themselves, just saying, it's been spammed around this board a lot lately, it doesn't make you look clever when you use it, just rather ignorant and irritating.

Please internet, get a damn dictionary and look at the meaning of a word or phrase before you use it, as for this whole argument amongst Austrian economics about Bitcoin the one thing that people tend to bicker on is the intrinsic value of Bitcoin and I personally think that is the blockchain, the ledger and the ability to transfer the money anywhere in the world.

Edit: OH LOOK AT WHAT I FOUND!

http://wiki.mises.org/wiki/Regression_theorem

In five seconds -_-

Hi, just noticed this. I'm the author of this paper. This thread brightened my day! If you have any questions, requests, or comments don't hesitate to contact me, although I am rather busy these days. First and foremost I'm happy that my work has resulted in some discourse 

That's something different.

If you read http://mises.org/humanaction/chap17sec4.asp carefully, you will not find anything denying my i nterpretation

"This certainly does not involve explaining the specific monetary exchange value of a medium of exchange on the ground of its industrial exchange value." (cit. L.v. Mises)

You just stated (in bold) that the regression theorem is wrong.

Wrong. Sorry. The Regression Theorem is right, just the understanding of many people (even learned people) is wrong.

The Regression Theorem answer a simple question: "what is the value of a fiat currency based on"?.
It explain the currency today's value is based on the value of the currency yesterday (or one hour ago).
Then you can take back to the last time it was convertible in gold (or something else like silver, salt, fur, etc.)
Then you can take the value of gold (or whatever was used at the time) from the last  moment it was convertible in fiat at a fixed rate until the first time it was used as an indirect mean of exchange.
Then what could be the value of gold, at the time, based on?
It was based on its direct use value (because there was nothing else to give it value).

People usually understand this as "to be money you need to start from some commodity with value, better if it have a large value".
And they are not completely wrong, because larger is the value (compared to its weight and size) better as a money these commodities will perform.
But it don't say "something without a direct use value" can not become money or a mean of indirect exchange (money being the most accepted and available of these).

If it has the ideal characteristic of money (by design) it can start from zero and climb from there just starting from a non-zero value introduced just by chance. What I call "noise".

bitcoin is the money of the future

The regression theorem has been a showstopper for some austrians.

I love it that all the "Austrian economists" here backtrack when one of their own says bitcoin is not money.  Pure comedy.  LOL

I also think that the regression theorem is basically wrong. But you could also view it in a birds perspective, taking account of the humanity knowledge. So fiat money (no redeemability, no backing) is a result of gradually fooling the public into using it, but as everybody knows that it works, it is possible to introduce new fiat money types directly. Since the public knows that unredeemable and unbacked money can work, it is possible to directly issue sound money like bitcoin, which has good money qualities, and a supply that is decided outside the reach of politicians.

I can use bitcoin on newegg, overstock, dell, etc. I can also use money on these sites. I consider it money.

Money is anything people consider something to be worth something. If a group of people consider a few rocks to be worth something, then it is currency to them. With the amount of traffic bitcoin has received, yeah, it'
s definitely money haha.

I value many theories of the Austrian School but the regression theorem is nonsense.
bitcoin got its value when it was first invented because people recognized its a better system than anything else to maintain balance of trade.
it does not need to derive its value from anything before it was invented.

Your experience fits right into the theory: Money is whatever the traders use as money. The stuff that is to be money, need to have some useful characteristics, else people will not use it as money.

If someone has this wrong, like many hot shots do, they just make the wrong decisions. So knowing "theory of money", like other knowledge, can be good for you.

I'm very tired of this kind of "theory of money" bs. Theory is helpful to determine which scientific experiments are worth implementing to understand how reality/economy works. Bitcoin is the experiment. No matter what any theory says, bitcoin will either be money or not - based on what really happens in the real world. So far, bitcoin is the best money, I have ever seen - and most people who actually use bitcoin understand this immediately. But I don't know what I don't know, and ultimately time and experience will tell. That is the great thing about bitcoin. We are actually doing the experiment instead of arguing about theories developed in the last century. Want to build a better money? Now you can!

No, barter is when you exchange good for good, both having direct use value.

In order for something to be considered money it would also need to have a store of value, and needs to be accepted for payment.

Thats called a barter

Bitcoin is money, and entering to Wall Street will inforce that idea.

Recently i heard some exchanges that instantly turns your Bitcoins to USD and you can ask them for a debit card so you can pay at any place where Bitcoins are not accepted yet...

Yes its money, you can use it as a medium of exchange for many things, so we can call it money.