I suppose I'll go back and reply again to Mr. Hugo LP. I was a bit dismissive to him for the crime of continuing to obtusely misunderstand my posts after three attempts at re-explaining. But, I would not want someone to think that his points were unanswerable or I was shrinking from the debate, leaving him triumphant.
I hope you are not doing it on purpose but you have changed the issue on discussion and answered to a different thing that what both you and me were saying previously. Hopefully you just got lost and its not a discussion trick to appear right.
Did I
seem to be engaging in trickery? Did I seem to be doing anything but explaining in an implausibly patient way to you, over and over, my thoughts on this matter? As Ron said to Santy: I think you're being a bit over-sensitive.
Let me explain:
But we were not discussing about the value of Bitcoin as money. We were discussing about the value of Bitcoin before being money. You have changed the argument as if I was saying that the value of Bitcoin is money therefore it does not violate the regression theorem and therefore I don't know what I'm talking about (which would be true if that was what I said). Problem is, that's not what either you or I said before.
What are you trying to say here? OK, I figured it out, but believe me, you are not being clear. You are claiming that I'm claiming that you're claiming that because people value Bitcoin monetarily, that is, because they value it for its exchange value (real or anticipated), it does not violate the regression theorem. I claimed no such thing, and I hereby explicitly state that you did not claim any such thing as you claim I claim you claimed. By doing so, I hope to thereby be done with it and put that behind us. It is tedium like this which caused me to cut off further exchange with you, which I saw as simply wasting precious minutes of my life.
Now you are against entrepreneurship? How can an austrian be against entrepreneurship and judge that the value of Bitcoin for entrepreneurs is worse or better than other valuations?
No, Hugo, I am not against entrepreneurship, but thank you for asking. what I said, what I was trying (unsuccessfully, for your part) to communicate is this: Bitcoins have no commodity value. You had said that I was mistaken in my views, because people were valuing bitcoins even before any exchanges took place, so that value by definition cannot be a monetary value so it must be a commodity value, so bitcoins clearly have commodity value, or at least started off having it, thus not violating the Regression Theorem. But you were wrong. No one was valuing bitcoins because he could hang them on his wall and gaze at them. People were valuing them even before any exchanges were taking place because of their anticipated monetary value, not for any commodity value. They have no commodity value. They're empty hashes, hashes to nothing. No one values the hashes qua hashes.
You are indeed judging one value better than the other, and thats not what an economist should do. My point stands unanswered.
Once again, I am not judging one value better than another. I am differentiating between two reasons for a thing to be valued: commodity, or monetary. Understanding that distinction is fundamental to understanding the Regression Theorem.
Btw, Bitcoin had value to entrepreneurs of the Bitcoin project because they believed that it could create a better monetary system and in general help having a more free economy that would create a better system.
Right.
You insunuating that it was because they wanted to become rich is false in general.
I did not insinuate that. I hereby disclaim any such insinuation.
Very few people were specting Bitcoin to have such a quick success. If you go to the archives of the first forum you can read about why they were using and mining them. Note that people were using scarce resources to adquire bitcoins when they were not money yet (they were not accepted anywhere), means that for this people they had to have some value previous to being money.
They had monetary value, not commodity value. They were being valued for their anticipated value in exchange, they were not being valued as hashes qua hashes. The hashes themselves are nothing but a string of random, meaningless numbers. No human cares about strings of random meaningless numbers. The only factor that makes them
not meaningless and
not random is if they are part of a larger system of exchange (either established or planned). If there be no system of exchange, there can be no value in the number string.
You can see in the forums how people were giving away hundreds of bitcoins to other people, paying 10.000 bitcoins for a pizza, etc... Thats what you do when you spect it to skyrocket in price in a year? No, people were in Bitcoin because they believed (and believe) that it can help create a better monetary system and a better system in general.
As I've said over and over: it's an experiment. A game. It's not a viable money.
Many of the people using it, and perhaps some creating it, believed (and believe) that it can help create a better monetary system for HYIPs and a better way to run HYIPs in general. In that belief, I think they are right. Spot on. Bitcoin is a very good currency platform for operating HYIPs.
You dont need to repeat your interpretation of the regression theorem. I get your interpretation and Im explaining to you why its wrong.
Actually, I don't think you're doing that. I really wish you
would just come out and explain why I'm wrong.
You can have the definition of money you want. And we can play with your definitions if you want to. But your definition has a big problem: it is too vague. Whats a widely accepted medium of exchange? Who judges "widely"? How universal it has to be? If an island starts using something as medium of exchange is it not money because its not in the whole world? So basically you are saying that the currencies of some small asian country (f.e.) is not money because there is not enough people in the world using it? To me is nonsensical to say its not money when people are using it as a means of exchange. And lets get crazy (Krugman style), is the planet Earth universal enough? Maybe not even the the dollar or gold have ever been money because the alliens were and are using something else.
Do you see the problem? Your definition is vague and allows whoever is using it to play with the vaguety to asses or deny something as money if it suits him/her. Having a strict definition of money much less subject to interpretation allows for more clearer discussion. If something is being used as means of exchange it is money. It makes no sense to decide if something is performing a function by how many people use it for that function. Either its performing that function or it is not.
To add the qualifier "widespread" or "universal" to money's definition may seem unsatisfying and "vague", but it is necessary for this discussion of the Regression Theorem. The alternative you propose, to simply call everything money if it's performing the function of exchange, means we must immediately admit that casino chips (along with many other examples) long ago proved the Regression Theorem to be totally wrong.
I think the Regression Theorem is correct, and so I define money in such a way that it's correct.
The encrypted servers is not really a problem. The problem is the storage of gold. Its fine that you think Switzerland will never allow its gold vaults to be violated. The same though the clients of the banks in Switzerland about the data of their bank accounts. Yet, they ended up giving it to the EU and USA govs. I dont think its a risk a currency that would go against the USA dollar can survive.
The risk of seizure is ever and always being run, so long as nation-states endure.
Even if you start decentralizing a lot who keeps the assets, the risk is obviously counterparty risk. If its already risky to trust one party to keep your assets, imagine having a distributed network of people that can be anonymous. How can you trust such a thing?
Some of us have pondered such things long and hard. One solution would be an independent trusted third party auditing person, traveling around the countryside verifying the trustworthiness of the stashers and the existence of their stashes and indemnifying himself should any abscond. Essentially this auditor would vouch for the individuals in the distributed and otherwise-anonymous network of value storage. They wouldn't be anonymous to him. Of course, then you're concentrating a great deal of trust all in one man. But concentrating trust might be a better risk than concentrating physical assets all into one or several physical locations.
It's one idea, anyway.
