Pete, who has commented here once in a while, and quite often over at the mises.org forum, issued a challenge to me. And yes, it’s about those stupid bitcoins again. Why, oh why, am I the go-to guy about this topic?
Truth be told, if it involved being praised to the skies and offered medals and cash rewards, I would never get tired of it. But just the opposite. Humble Smiling Dave is besmirched and ridiculed.
Pete concludes his article with a request from me of the following:
- Explaining why a trade between two non-consumption goods is not indirect exchange, and provide a method for classifying such trades (as according to Mises, the only two options are direct and indirect exchange)
- Providing a clear distinction between a non-money medium of exchange and money, and providing examples of such non-money media of exchange (preferably ones that he considers sustainable)
- Explaining how Bitcoin is to be classified (as according to Mises, the only three options are consumer good, producer good and medium of exchange)
- And last but not least, as a bonus, he can try to describe the process by which Bitcoin will collapse
OK, sure. One at a time.
1. It’s a direct exchange of a peso for a bitcoin [or for a dollar]. It’s not indirect exchange, because the peso was directly exchanged for the bitcoin [or the dollar], with no intermediary.
2. Non money medium of exchange: cigarettes in a prison. You can get pretty much everything the prison community has to offer for cigarettes. If we posit a small group of “cigarette haters”, which we define to mean people who will refuse to accept cigarettes in exchange for anything, then cigarettes are not yet a money in the prison. It’s not yet universally accepted.
Now if we are talking about a prison of a million inmates, and only one cigarette hater, he obviously doesn’t count. If 30% of the inmates are cigarette haters, then cigarettes are not yet money. What exact number is the make or break magic number of haters for cigarettes to be or not to be money? Mises says it’s not clear, meaning not known, meaning debatable.
Now just as there is a dividing line between a medium of exchange and of money, which Mises talked about explicitly, so too there is a dividing line between not being a medium of exchange at all and being a medium of exchange. If one person only in a prison population of a million accepts cigarettes, cigarettes are nothing. If so many people accept them that cigarettes are close to the no man’s land Mises talked about as maybe being money, they certainly are media of exchange. Where is that dividing line between media and non media of exchange? As with the other magic number, it’s not clear. But i have given some guidelines in my various articles.
3. There is a fourth class Mises didn’t bother to mention, because it usually has no influence on an economy. I call this class “Stuff Only Fools and Idiots will Bother With.” No offense. Bitcoin is right in there, at the head of the class.
To make perfectly clear what I mean, I will challenge Pete to answer this question. How would he classify the invisible non existent clothing the Emperor paid good money for in the classic story “The Emperor’s new Clothes”, by H. C. Anderson? Wherever he puts those, bitcoin goes right with them.
4. Bitcoin will collapse the same way the Ithaca Hour and all the other phony moneys through the years collapsed.
Guys, I’m tired of bitcoin. Pete’s other questions will have to find someone else to answer them. I’ve spent too much time on it. I have bigger fish to fry. Marx, Keynes, MMT, the Monetary Disequilibrium crowd, defending Say’s Law, educating myself.
Smiling Dave – You are correct in your assessment of bitcoin. Bitcoins are mearly goods, goods that someone is willing to obtain through an exchange of money. It is no different than exchanging money for a basket of apples. The fact that some people may then exchange a service, ie, a haircut, for the basket of apples does not make the basket of apples a money. In the same way, bitcoins are not money. The fact that bitcoins have increased in value is no different than tulips or beanie babies rising in value. Bitcoins will crash when people want their “money” back. Just like tulips and beanie babies.
Thanks for your comments, Anon.
First of all, Bitcoin decreases transaction costs of trade, which gives them a comparative advantage against other media of exchange. I therefore expect Bitcoin to proliferate in areas where the transaction cost difference is significant, or which are sensitive to transaction costs. None of the doomsayers address the issue of transaction costs, nor attempt to answer the question if people switch from Bitcoin to something else, what would it be. As a switch from Bitcoin (in particular in the areas delineated above) increases transaction costs, there is no reason to switch from Bitcoin, as that increases the transaction costs and thus decreases the profits of those businesses. There currently is no alternative medium of exchange for those businesses and probably won’t be for the foreseeable future. Compared to Bitcoin, neither tulips nor beanie babies decrease transaction costs.
Second of all, both tulips and beanie babies continue to exist, merely their price decreased from the bubble levels. Both are still routinely being sold and both.
So the argument is a double fail.
I also provided a point by point address to the reply of Dave on another post on my blog.
Bitcoin isn’t unique in this. Bartering with diamonds also “decrease transaction costs of trade” when compared to bartering with potatoes, especially for large transactions. So this feature doesn’t make Bitcoin “different” from tangible goods and therefore doesn’t refute Dave’s argument.
I really don’t understand what you’re trying to say. If anything, it supports my position. Diamonds decreases transaction costs over potatoes, therefore, diamonds will be preferred to potatoes as a medium of exchange. Similarly, Bitcoin decreases transaction costs over fiat or gold, therefore, it will be preferred to them as a medium of exchange. This shift will continue until Bitcoin does not decrease transaction costs over the alternatives anymore.
I can’t speak for Dave and his argument against bitcoin, so you’ll have to take it up with him (although it seems he’s too tired of answering the same old arguments again and again to respond). All I’m saying is that bringing up transaction costs of trade is derailing the conversation, since all things have a transaction cost of trade. Bitcoin isn’t unique there, so again, therefore it can’t refute Dave’s arguments. (Sorry to repeat myself, but I don’t know how to make it any simpler).
Also, just by the way, I provided two posts with point by point refutation of Smiling Dave’s arguments:
http://www.economicsofbitcoin.com/2013/02/the-contradictions-of-smiling-dave.html
http://www.economicsofbitcoin.com/2013/02/smiling-dave-responds-or-not.html
BTW Pete, I could not approve your earlier comment for two reasons.
1. Attributes to me things I never said.
2. Uses language inappropriate for a family site.
Either your argument is a non-sequitur or I don’t get it. I mention transaction costs because they explain demand for Bitcoin. They do not explain demand for tulips or beanie babies. So the analogy “Anonymous” provided is inaccurate. The reasons he uses to conclude the crash is forthcoming are inadequate.
You mentioning potatoes and diamonds has no effect on my argument. I’m pointing out a gap in the argument of “Anonymous”. How is that derailing?
I did not claim that Bitcoin is unique in its ability to decrease transaction costs of trade as such. I claimed that this differentiates Bitcoin from beanie babies and tulips. So while Bitcoin may or may not fail, the reasons brought for by “Anonymous” are insufficient to make that conclusion.
Furthermore, what Bitcoin however is unique in, is that it decreases transaction costs more than any other available medium of exchange (with the potential exception of Ripple). Unless this changes, the acceptance of Bitcoin will probably grow, rather than sink. So not only is the analogy of “Anonymous” inaccurate, once the analogy is amended for the gap I pointed out, the conclusion should be exactly the opposite.
> I’m pointing out a gap in the argument of “Anonymous”..
You said in your reply to him/her, “None of the doomsayers address the issue of transaction costs…” Once you said that, it follows that from then on you’re arguing against *all* doomsayers. Not just Anonymous.
Furthermore, when I wrote “…therefore [your argument] doesn’t refute Dave’s argument.” you could have replied immediately with statement to end the confusion. Instead, you did not, and argued along a different path. If what you say now, that you were always arguing against Anonymous, is true, then why wait until now to say this?
You also state, “I also provided a point by point address to the reply of Dave on another post on my blog.” How is not clear that you are arguing against both?
If you still contend to be just objecting to Anonymous, then from my perspective, you have moved the goal posts. In which case, it serves little purpose to continue, as we both know we’ll just go round and round, so I won’t argue further.
> How is that derailing?
Because it’s throwing away all of the arguments already put forth by Dave and others and replacing it with a litmus test, ie: Does it decrease cost of trade? In your opinion, if so, then it proliferate; if not, it will fail. It’s like if I said, “I believe Richard Nixon knew and approved of the Watergate scandal because his former staff members testified this was true,” and you said “When Richard Nixon was a kid, he helped find homes for unwanted puppys, so he would never do that.” You’ve invented your own rationale for why bitcoin would succeed, and ignored everything else.
>… So while Bitcoin may or may not fail…Furthermore, what Bitcoin however is unique in, is that it decreases transaction costs more than any other available medium of exchange (with the potential exception of Ripple) Unless this changes, the acceptance of Bitcoin will probably grow, rather than sink.
Before you were calling others “doomsayers” and now you are unsure yourself if bitcoin will succeed or not? We have jumped off the tracks and wholy gone in another direction!
As a sidenote, Ripple has a lot of problems. The biggest one has already reared its ugly head in real life, which is the temptation for commercial entities to place extra fees on their promises. For a real life example, when bitstamp (which is part of the ripple network) promises to pay you in bitcoin it charges an extra 1% processing fee. So in reality it’s living up to 99% of its promise, yet there is no large scale trust rejection because of this. Due to the lack of reaction this leads down a slippery slope where various fees are charged and no one knows when a dollar is really a dollar. This makes the landscape confusing and ultimately bound to fail.
Tim,
Dave is deleting my posts, so I can’t write replies that address the points to the extent I would like to. If you want to continue the debate, please contact me directly.
I’ve explained why I deleted your post. Feel free to repost it in an acceptable manner, meaning language appropriate for my kids to read, and not attributing to me something I did not say.
In any case, I’m fine with you and Tim continuing through direct contact. I merely offer you the option of staying here.
You’re not the go-to guy, but you’ve taken a decision to stifle debate whenever the topic is discussed anywhere. If you stop doing that, my guess is people will probably stop being “obsessed with you”.
Oh, and you haven’t actually addressed his points.
No, you’re not the go-to guy, but you’ve taken a decision to stifle debate whenever the topic is discussed anywhere.
If you stop doing that, people will probably stop being “obsessed with you”. But you already knew that, which is why you keep doing it.
Oh, and you haven’t actually addressed his points.
Two different IP addresses, both identically worded. Hmm.
Thank you both for your contributions.
(In response to bitcoinblogger’s post that was a response to your initial post)
Cross-posting a response I posted elsewhere, about how I I think satisfies or will gradually come to satisfy the regression theorem, particularly as the state grows, and it’s inherent value (which is still relative).
Personally, I will disagree a bit here, since I do not think it would become money in a Robinson Crusoe, free society scenario… it is only until some other forces arise that would create a need for private, censorship-resistant, regulation-resistant, medium of exchange that would give bitcoin value.
——————————————————————————————————
Second, the originating commodity in the regression theorem need not be something that is actually consumed, like classical examples of salt, metals, tobacco, crops, etc. It just has to have some kind of use of its own before becoming money.
Well, what if you had a tool whose primary utility was to get around or through government barriers? A virtual “hammer” for trade barriers, if you will. What if people started exchanging cash for this special hammer, then traded that hammer for other goods?
But what if the act of trading that hammer is also the same act of using it to break barriers? That is, its inherent commodity utility is exercised by the very act of its own trading. Imagine swinging it or throwing it to your recipient and smashing through barriers placed in between, metaphorically[1]. That virtual hammer is the commodity with some valued use identified by the regression theorem before becoming money.
Now it is not yet money per se, because people still store most of their income/capital value in other units (fiat or commodity). So it is still a currency at this point, primarily used as a medium of exchange rather than a store of value. However, as it circulates, and if it gains more confidence to store bitcoin longer term, this virtual commodity–this “hammer”, then shifts from being mere currency to becoming more money-like.
It doesn’t necessarily have to replace anything. It can just circulate along side other monies or supplement them. Who knows, maybe we’ll have a gold or silver backed bitcoin bank/exchange/fund/instrument.[2] This would also have the advantage of being able to set up some kind of secure proxy ownership of the hard asset that would be as private as you like. So long as you merely have a claim–an electronically secure title with no personal information–on the asset, you can remain anonymous. However it is reduced to being as private as those you trust once you ship it or claim it in person or via another person.
In my opinion, bitcoin would likely not emerge as money in a free society. Interestingly that itself would also be evidence of bitcoin conforming to the regression theorem since in a free society–free of politically controlled fiat monies, where monies are denationalized and can be privately secure–bitcoin would not have that unique originating commodity utility it has today.
[1] Technically, a more apt commodity metaphor would be like “oil” rather than a hammer, since bitcoin works around barriers rather than actually breaking them.
[2] I wrote this a while back, but interestingly Trace Mayer had a similar post about this with regards to GoldMoney:
http://www.runtogold.com/2013/01/goldmoney-mulls-bitcoin-integration-why-your-gold-is-not-safe-there/
I understand what you are saying about hammer and oil, I think. But that use is just one more benefit of using bitcoin as money. The basic problem presented by the regression theorem remains, which is, how many hours of my hard work should I give up to own a bitcoin? The answer would depend on what you could buy with it. But you don’t know what you could buy with it, since everyone else is asking the same question. It’s value to you depends not on what you think of it [because you cannot use it with out involving another person], but on everyone else thinks of it. And they have the same problem.
Contrast this with gold when it first got started. Even if nobody else cared about gold, if one person wanted it to make jewelry, he would give it value for that. And if many people valued it for that use, it would have have completed the first requirement to be a medium of exchange.
Initially it was like that, but now there is a market for it, developed out of freedom-oriented people who value those inherent bitcoin attributes. I don’t know how much you’ve looked around, because it is probably not apparent, but you can now buy many things with it. A variety of online services take bitcoins, like WordPress and Mega, and various web hosting services and VPN services. In fact, this is the only way to ensure your security.
But there are also goods and services available. Yes they are still a minority and unfortunately it’s all scattered (sort of like libertarians, lol), but here a few examples:
https://www.bitcoinstore.com/ (electronics)
http://mandrik.com/ (food)
http://www.stompromp.com/ (musical instruments)
http://coinabul.com/ (gold/silver)
http://www.bitmit.net/en/
https://www.spendbitcoins.com/places/
https://www.coindl.com/
http://stripcoin.com/
http://www.forbes.com/sites/jonmatonis/2012/08/31/bitzino-and-the-dawn-of-provably-fair-casino-gaming/
(bitzino and satoshidice and switchpoker for gambling)
freelancing, work-for-hire:
http://bitgigs.com/
http://workforbitcoin.com/
https://www.btcworkers.com/
and of course, the infamous silk road
But what you say about gold
“Even if nobody else cared about gold, if one person wanted it to make jewelry, he would give it value for that. And if many people valued it for that use, it would have have completed the first requirement to be a medium of exchange.”
… is analogously true for bitcoins as well:
“Even if nobody else cared about bitcoin, if one person wanted it to ensure privacy and unrestricted trade, he would give it value for that. And if many people valued it for that use, it would have have completed the first requirement to be a medium of exchange”
As far as determining how much of their own labor/work was worth, it is currently done implicitly through the marketplace, and more explicitly through exchanges, the most well known being MtGox. However, there is also:
https://localbitcoins.com/
local or geography based P2P currency exchange, if you do not want to use the centralized, ForX-like system of formal exchanges.
Many people probably use MtGox as the reference for valuing their work/goods. But some people can stray from that as you can witness in various prices as well as in localbitcoins.com
This is actually better than the system used for precious metals today. I’m a big fan and buyer of gold and silver, but you have to admit it is highly regulated. You cannot setup your own exchange, nor use PMs as actual currency, due to legal tender laws (see the fate of Bernard von NotHaus of liberty dollar). You are by law completely dependent on the COMEX for all PM prices in US, which itself is highly manipulated. And the CFTC which regulates the COMEX, decided a couple months ago to ban Intrade, a prediction market based in Ireland, from the US. Outside of the CFTC, the same is true with gambling.
All those sites together are a drop in the bucket. The average person has nothing to do with those sites, and everything to do with amazon.com and their local supermarket and mall. None of those places accept bitcoin at all.
It’s not analogously true for bitcoins, because “privacy” and “unrestricted trade” are talking about using it as money, not for its intrinsic value. Are you sure you grasp what the Regression Theorem is stating?
The question is not how much their labor is worth, but how much a bitcoin is worth. They know their labor’s worth in dollars.
Those websites tell you what a small amount of traders are trading it for today. But they don’t tell you what you can buy at the supermarket or any major store with your bitcoin [answer: nothing].
Your comments about gold are all true, but gold isn’t used as money nowadays. I was using gold as a theoretical example of what can become a money.
I think there are good and bad aspects to Bitcoin. Specifically the ability to directly exchange Bitcoins electronically is great. The bad is that they represent ‘unit of work’ rather than for something real. If somebody takes the Bitcoin protocol/technology and uses it for electronic warehouse receipts for a commodity such as gold or silver we would have something useful.
Sure, when it is not the actual money, but a means of transportation, it’s great. [Although it might lose its power then. I mean how will Mr A prove that he now owns the commodity. or get it delivered?]
All my articles about bitcoin are about when bitcoin is trying to be the actual money.
Does anyone here actually use Bitcoin?
I do. And many people i know do as well. You all seem to have the wrong idea about what its for. How much cash do you carry? I’m guessing not much. When do you need cash? Probably when splitting a tab, buying things on craigslist, paying a friend to help you move, etc.
Now, how hard is it to use Bitcoin? Its not.
1. Install blockchain.info app on your smart phone
2. Set up an account, which entails nothing more than creating a password
3. Buy some bitcoins from a friend that has some. Block chain makes this easy by allowing you to enter usd amount based on current exchange rate. Give your friend a 20 and he/she can send you 20 worth of bitcoins immediately, and i really mean immediately.
If you’re trying to get rich off Bitcoin by hoarding, then you’re as stupid as someone stuffing fiat money in a mattress. I personally only have as much Bitcoin as i would have cash in my wallet, so about $50-$100 worth.
That, my friend, is the true value of Bitcoin. Among those who accept it, and its very easy to join that club, it is an alternative, competing currency to the usd or whatever debased bulls!t paper your government issues.
Now go read your stupid books needlenose, because me, and those who stand with me in the revolution against monetary tyranny are busy living the life that future generations will write books about.
What have you said here that refutes Mises’ regression theorem?
Oh hey, one more thing I want to point out. The website you are blogging on, WordPress, accepts bitcoin.
All I see in your argument is a myriad of informal logic, including an overall straw man argument, many appeals to authority, appeals to ridicule and I sense an individual who is critically and reluctantly commenting on a topic that he doesn’t understand and therefore doesn’t enjoy conversing on.
I see the value of education and reading books. I do that myself. The important point that I am trying to impart is the fact that we are living through very active and dynamic times. History is being made as we speak and if you knew more about bitcoin, and how it works on a technical level as well as the principles that it is based on, I think that you would see that it is an economic experiment that could only be imagined in previous times.
The time is ripe for an idea like bitcoin to flourish. The failure of traditional systems to serve the masses in an equitable fashion create a dire need for an alternative to state controlled money. If you understand economics, I’m sure that you realize that for many, an effective monetary system can be the difference between life and death, or liberty and slavery. To roughly quote Victor Hugo, “Nothing is as powerful as an idea whose time has come.”
I don’t know what the future holds, but I see bitcoin as being the most effective step this far in creating something that is as fluid as cash and at the same time as convenient as electronic transactions. Bitcoin has for the most part solved the “double-spend” problem that has always created functional barrier to creating such a system outside of the traditional finance system, where double spending is in fact, the norm (fractional-reserve banking).
So, to close this out, I want to state that it doesn’t matter what exchange rate the Bitcoin is against the dollar. Any sellout panics will, for the most part only scare out the speculators who are only there to make a quick buck. The true “intrinsic” value of bitcoin is how it functions and the investments made by companies in the bitcoin “ecosystem” that facilitate the exchange of goods, services and assets for bitcoin. This value will not be scared away by any bursting of a “bubble,” as bitcoin has already survived a few bubbles and corresponding crashes and comes back because people that really use it and understand it don’t expose themselves to its volatility to the point where it would really matter (if my $100 of bitcoin were to suddenly be worth $10, it wouldn’t be the end of the world. I would buy more and keep using it for transactions where it is the most convenient form of currency).
What have you said here that refutes Mises’ regression theorem?
I couldn’t help myself, so here goes …
I haven’t done the math on this myself, but I read that if somehow, some way, bitcoin had the same “monetary velocity” as the USD, at the point where all bitcoins were created (which will be 21 million in the year 2130, please read up on how inflation is managed before commenting back), each bitcoin would be worth somewhere in the neighborhood of $450,000. Yes you read that right.
I’m not suggesting that this will happen, as we all know that the world will go through a lot between now and then. Regardless, the unique property of bitcoins is that they are infinitely divisible. Currently most bitcoin clients will only divide to 8 decimal places, a unit of bitcoin called a “Satoshi.” That can be changed in future versions of bitcoin clients.
My point in all of this is that unlike other currencies, if the value of bitcoin rises relative to other currencies and commodities, it will not hinder it’s ability to conveniently process small transactions, such as to buy a sandwich or donate small change to a person / cause that you appreciate. Since this system is still in its infancy, and the traditional monetary systems of the world are in shambles, there is no way for any of us to determine at this point if the recent rise in bitcoin price is in fact a bubble, or if it is underpriced and working up to a realistic, stable market price, fueled by it’s functionality and immunity to politics and other factors that in theory would probably be best kept isolated from being able to influence currency supply or movement.
I have been studying bitcoin for some time and it is indeed very fascinating. Everything from the way that it functions to the culture among those who develop it. I liken it to a “wild west” of sorts with regard to economics. I don’t think it is going away any time soon.
What have you said here that refutes Mises’ regression theorem?
Okay there, I’m not saying that Mises’ regression theorem doesn’t apply. I am in fact saying that it does and that very real people are bartering goods and services for bitcoin. In fact, I recently purchased precious metals with accumulated bitcoin in order to mitigate my exposure to bitcoin’s price instability. Keep in mind, the price instability is largely derived by the fact that the bitcoin/fiat exchanges are relatively low volume and the market capital of bitcoin only recently exceeded $300 million.
My problem with you however, has nothing to do with Mises. It is your summary dismissal of bitcoin as a real force in the progress of monetary systems.
I would like to posit that it is simply based on your ignorance of the topic. For your own sake, learn about how it actually works. Try it out, you can buy bitcoins with bitinstant if you don’t know anyone that has any. Next time you are at a restaurant with a friend and choose to split the tab, invite your friend to install the bitcoin client on their smartphone and accept bitcoins as reimbursement for your half of the bill. It will only take about one minute to set up. If nothing else it is a way to actually experience and experiment with what could be considered the “bleeding edge” of economics.
Your response however, in bringing up Mises’ regression theorem is non-sequiter.
Please re-read your post. You said:
“4. Bitcoin will collapse the same way the Ithaca Hour and all the other phony moneys through the years collapsed.
Guys, I’m tired of bitcoin. Pete’s other questions will have to find someone else to answer them. I’ve spent too much time on it. I have bigger fish to fry. Marx, Keynes, MMT, the Monetary Disequilibrium crowd, defending Say’s Law, educating myself.”
There is no way to be sure at this point that bitcoin will collapse. It already has a few times, and came back to life. That is because its function is what gives it value and even if a bunch of know-nothing dilettantes flee in panic every time the price drops a little bit, there are always people willing to exchange goods or services for bitcoin because of its unique properties. As time progresses, and as the market capital of bitcoin increases and reputable institutions begin to recognize it, which is in fact happening, the price may stabilize to the point where you may find your immigrant gardener asking for it instead of fiat, because it makes it far easier and cheaper for him to send money back to his motherland.
“Phony Money?” what is your reference? Are USD not phony money? I like JP Morgan’s quote “Gold is money, everything else is credit.” While gold has its own inadequacies with regards to being a practical form of money, our current financial system puts this quote into real perspective, especially in light of these magical solutions such as “quantitative easing.” All of that phony balony does nothing more then unjustly encumber the tax paying public with the debts of a microscopic class of sociopathic individuals who are literally taking our time and our lives away through institutionalized extortion.
Those “bigger fish” you want to fry are old, rotten and smelly. Try some fresh fish over here where the action is at. Learn by actually experiencing what you are trying to talk about instead of just dismissing something new because you don’t understand. The truth is, that you don’t even really need to understand bitcoin in order to use it, and that is the beauty of it. That is the reason why it is growing right now.
It can be seen as a weapon in the arsenal of the common people in our resistance against monetary tyranny. I am an American and I take pride in being part of a free people and free people must remain vigilant in the defense of liberty. Bitcoin, at this point embodies monetary liberty adapted to a modern age of advanced technology. History is being made here.
I’ve dealt with this many times. If you search for an article here called Bitcoin All In One Place you will find the appropriate links. Short version: Very real people is not enough, It has to be huge amounts of very real people. See articles for details.
The reason I’m sure it will collapse is because that is what is predicted by the regression theorem.
As for the difference between USD and bitcoin, Mises talks about it in Human Action. I’ve explained in the articles or the comments about fiat currency.
As for the technicalities of bitcoin, I confess that I know nothing about them, because they are irrelevant. No matter how it works, the regression theorem proves that it will never be money. Please show me which line of the regression theorem depends on some technicality of how bitcoin works. I’ve discussed this in my articles as well.
The discussion of whether Mises Regression Theorem applies to bitcoin has nothing to do with resisting tyranny. Our emotional attitudes to money and tyranny and bitcoin do not affect the essential question, which is: Does Mises’ theorem prove bitcoin is untenable as a money or not?
The question is not whether bitcoin is or is not where the action is. The question is, has Mises proved that bitcoin is doomed to failure?
Bitcoin can only be a weapon in the arsenal of the common people if it is not doomed to failure. The question under discussion is, has Mises proved it is doomed to failure or not?
Do me a favor Mr. Dave. Try actually responding to what I have to say instead of throwing some sophist non-sequiter at me. I’m not some kind of genius like you but I’m smart enough to see what you are doing.
I give you the courtesy of actually quoting what you said that I have a problem with in my last response. Now you quote what I’ve said that you disagree with, okay.
I’m serious here about getting to the bottom of these facts and I recognize that if you actually put your brain to work and refuted some of the things that I have to say I might actually learn something because I’m pretty sure that you know more about economics than I do.
I might sound a little insulting but that is because when it comes to topics like this I’m serious about getting to the truth of it and the only way that’s going to happen is if we cast off the intellectual laziness, throw on the symbolic intellectual “boxing gloves” and derive some logical conclusions based on solid facts.
I’m not being sophist, and I am responding to what you say. My response is the same to all you have written, that it does not show why Mises was wrong, nor why his theorem does not apply to bitcoin.
In my previous reply I replied more explicitly, referrring to things to you said, and pointing out that they do not address the main question.
What I mean is, assume Mises theorem is true, and that it applies to bitcoin. If we grant that, there is nothing left to say, meaning all the matters you raised will not change that Mises has proven bitcoin is doomed. For instance, if a chemical analysis proves a wedding cake is filled with poison, nothing else would count when deciding whether to eat it. Its pretty design, the beautiful calligraphy of the icing, the great love between the bride and groom, the wonderful stove used to bake it, the need to resist tyranny, all would make no difference. The cake is poison, and should not be eaten. The only room for discussion would be about the chemical analysis, using the proper tools to find out whether it is an accurate analysis or not. Mises has made a “chemical analysis” showing bitcoin is poison. That is my claim in the articles, and that’s why I don’t see the relevance of the issues you are raising.