Topic: The free Market and Bitcoin (Read 1302 times)

Were all in free market, that's mean anyone can transact with people of any country in the world of internet and bitcoin is as a means of payment that can be accepted by some people but im sure one days bitcoin can grab at least 10% of the population in the world.

It is not free because we are not fully free, everything is set to comply with the government standard rules and regulations, this is just a payment system and not a real money. I don't thing it can ever compete with fiat because we just want to see the increasing adoption and see the price growing, in the end it's still base on fiat. Without exchanges it would not be possible for us to withdraw our funds and enjoy what we have.

Free market is actually an idea that dwells only in mind. But even though we can not have that ideal market but at least we are making some models based on that idea. Hopefully if we cannot attain such ideology at least we can make our market better by using the patter of free market. Soon if the world is accepting bitcoin then we can integrate bitcoin into that idea of a free market using bitcoin.

Technically, no.

A perfect free market should be a market where the prices of goods are not intervened by anyone.

The government is indirectly and directly manipulating the price of goods and services, by putting on regulations on certain industries as well as rigging the fiat currencies of their country. Basically if you look at China, they devalue their currency so that they can export more goods. When they devalue they stay competitive in a world where the biggest countries have the cheapest labour costs.

So a free market technically can only be achieved by a decentralised currency, such as bitcoin.

The is no ideal free market in the world, absolute free market only exit in theory, even that has come into play in Bitcoin with some people looking to be the President and secretary of Bitcoin.

In the US, people were prosecuted for hoarding gold during the Great Depression. The public was ordered to surrender excess gold, and seizures and prosecution was authorized for those who didn't comply. In the 1970s, Nixon abandoned the last vestiges of the gold standard by signing an order that disallowed the exchange of fiat for gold. While that may not affect private deals, the legal authority to require creditors to accept certain currency in payment of debts is what determines how the government establishes what the official currency is.

When the definition of free market concerns about lesser regulations, I believe bitcoin will help free markets to boom because basically bitcoin will support peer to peer business model so that it can avoid many government's regulations.

When people will prefer transacting with their neighbors/friends, I believe free trading will come into more effect like we can do business without any hesitations in free market way.

Its hard to say that we are in a free market even in Bitcoin because everything can influence anything. At first I thought that Bitcoin cannot be influenced by any government or whatsoever but when the news came out about China supporting the shut down of all Chinese Bitcoin Miners the price of Bitcoin plumetted from 1200$ back to 700$ per Bitcoin. So even Bitcoin can be influenced outside of the supply and demand system.  It is safe to say that Bitcoin is not always controlled by Whales of the market but also the econony as a whole.

The currency is your choice though.  The government only declares what the legal tender is in the system (the fiat currency) but this is not oppressive.  In Northern Ireland, I'm told that the old pound coin is technically out of circulation, but shops routinely accept it - anyone could use anything as a currency.  In fact, if I said "I'll give you some magic beans for that cow" an you accepted the deal, we could equally view magic beans as a currency.

My point is that what the government declares about currency only restricts the free market if trading with anything except the legal tender was illegal.  Even if they restricted the use of Bitcoin or any other specific currency, even that would not affect the free market any more than restricting the sale of currently illegal products does.

I never really thought of it that way because when you grow up in a society where prices are always going up because more money is being printed you tend to automatically not think outside of the box.

Technically it's still a free market although because you're using fiat it's a grey area where you feel free, but your currency is actually causing you to lose out.

This is based on the assumption that a free market is a good thing, but that isn't always the case.

A "free market" is in fact based on employment and gives power to private companies.  These companies earn money from their workers and essentially take credit for it, which is why people always talk about Bill Gates when they talk about Microsoft.  There are many things about a "free market" which is bad for an economy.

Fiat currency can have a free market, simply because it doesn't restrict trade but enables it.  Decentralised currencies are just an addition to a free market.

No person singularly can control it, but there are factions that wield immense control over bitcoin. The largest mining pools control the fate of bitcoin every time they decide to support one fork over another. If the intent was to create a currency that couldn't be controlled by any one person, they may have succeeded. If the intent ws to create a currency that couldn't be controlled, they did not succeed.

there won't be any free market with fiat, because fiat is the pillar of the country's economics and it need to be controlled so the inflation rate can be controlled and without controlling the fiat there will be chaos, but it is different with bitcoin, the purpose of bitcoin was to create a currency that nobody can control, that is why bitcoin is very suitable as sub currency but not as a main currency

That was hard to do because if there is a free market, who will decide the value of the fiat? It is a real money and we will be prone to theft and bribary if that happens. The idea is good but it would not be easy. Fiat don't have the same characteristics Bitcoin has, that's why because cryptocurrencies is the one who can perform that goals. Everything is getting greedy if money is involved, and I think there won't be someone who will print fiat if it is a free market. Even Bitcoin is being tampered by greedy services nowadays.

Yes but after the FIAT is converted into bitcoins it ceases to be under the control of central banks and any form of regulation so there can be free market after its brought into Bitcoin.

I don't see why that's not completely free market, Bitcoin and the other crypto's can compete totally free.

After 6 years working with bitcoin I still have a hard time to express what the economic point is of the bitcoin network and the currency.
Part also of my lack of economic knowledge. After reading this book a must say that my view of BTC gets formulated to perfection ;-)

We are a mixed economy, not a pure free market economy. Bitcoin is more free market than fiat, but not completely free market either. At this point, the miners and the bitcoin foundation are both special interests. They govern and jockey for influence based on their own needs and there is a lot of money at stake (billions of dollars in total), and any time big dollars are at stake, ideas become corrupted.

If money is denationalized than there will be no inflation in fiat and banks/government don't want to have zero inflation because they want to print more money backed by nothing to add tax/debt to their citizens and make profit.

Most of the trade market is dominated by US dollar which is just a national currency of USA. 

Yes they are good example of free market currency which can be accepted worldwide in same form and have fixed supply like gold. But we may not see bitcoin being accepted in trade market due to lots of politics.

I'm already stunned by this book that is available for free on this site.
This is a book from 1970 and in this book Hayek is predicting the use of private competing tokens.
It's a great read.

https://mises.org/library/denationalisation-money-argument-refined

"As soon as one succeeds in freeing oneself of the universally but tacitly accepted creed that a country must be supplied by its government with its own distinctive and exclusive currency, all sorts of interesting questions arise which have never been examined."



Competition in currency not discussed by economists

It is an extraordinary truth that competing currencies have until quite recently never been seriously examined.1 There is no answer in the available literature to the question why a government monopoly of the provision of money is universally regarded as indispensable, or whether the belief is simply derived from the unexplained postulate that there must be within any given territory one single kind of money in circulation—which, so long as only gold and silver were seriously considered as possible kinds of money, might have appeared a definite convenience. Nor can we find an answer to the question of what would happen if that monopoly were abolished and the provision of money were thrown open to the competition of private concerns supplying different currencies. Most people seem to imagine that any proposal for private agencies to be allowed to issue money means that they should be allowed to issue the same money as anybody else '(in token money this would, of course, simply amount to forgery) rather than different kinds of money clearly distinguishable by different denominations among which the public could choose freely.

 F. A. Hayek. 'Denationalisation of Money: The Argument Refined'.

I guess this is the reason why cryptocurrency are getting popular.  It get rids of regulation.  We are free to setup our demand and sell price. 


This is a good differentiation of a free market.  No body are regulating the price so everyone has the right to pump or dump the market.  While in fiat, if ever there is some irregularities happening, central authority butt in and fix the issue.