Just as bitcoin is taking a serious hit in the real world, it’s being defended anew on the internet with the same old arguments.
Devil’s Advocate: I’ll say it is! That fellow Anarcap Ramblings has shown you are not even an Austrian if you doubt bitcoin.
Smiling Dave: Ah, but he has ignored the fact that bitcoin is not in wide demand.
DA: Ah, but he has shown that it doesn’t have to be.
SD: OK, time to explain the whole thing from first principles.
What is money, according to Austrian Economics?
Ludwig von Mises: Money is the universally used medium of exchange, nothing else.
What’s the point of even having money in an economy? Why did people start using money, and why do they still use it today?
LvM: A man who finds it hard to obtain in direct barter what he wants to acquire renders better his chances of acquiring it in later acts of exchange by the procurement of a more marketable good.
DA: What does that mean in English?
SD: Very simple. It means a medium of exchange has to be more marketable than most things. It has to be in wide demand.
DA: Wait a minute. Mises said more marketable. And you are turning that into wide demand.
SD: What makes something more marketable?
DA: Because more people want it, of course.
SD: What is the technical term for “more people want it”?
DA: It is in wider deman…oh!