Why do so many Libertarians support bitcoins?

[vickersvimy]

I know that. I didn't ask what function does jewelry serve, and you didn't answer my question. I'll try again (it's basically the exact same wording): what function or purpose does jewelry serve that cannot be achieved by very inexpensive materials?


Nope, I am not saying anything of the sort (essentially or otherwise).


Actually, it's backed by something more than gold is backed by something. I somewhat touched on this, and if you look at my other posts, in other threads where I discuss bitcoin, you'll find that in one of them I discuss more extensively and in depth what gives both bitcoin as well as gold their so-called "intrinsic" value.


I'm not sure what you're referring to, here. What we use are Federal Reserve Notes (FRNs); they're backed debt, and are the product of an interest-bearing fractional reserve system.


That depends on who's buying bitcoins and why. They're being used as medium of exchange by many people.

The "greater fool" theory also applies to gold: http://newsok.com/taking-stock-greater-fool-theory-governs-price-of-gold/article/3861757

Gold and silver jewelry is regarded as looking nicer than lets say... bronze jewelry and so people pay more for it.

 

[Neil Desmond]

Gold and silver jewelry is regarded as looking nicer than lets say... bronze jewelry and so people pay more for it.

It's subjective to say that gold or silver jewelry look nicer than bronze jewelry. Personally, I think bronze jewelry looks just as nice as gold or silver jewelry.

People pay more for gold and silver primarily because they are scarce materials.

If it's the color or appearance that's appealing, then this can be achieved by plating (as in surface metal deposition, electrolysis, etc.), or even using material or paint that makes it appear like gold or silver.

 

[juleswin]

Personally I think bitcoins main attraction is the idea that the free market created it, the people that use this rational to explain their attraction to bitcoins have convinced themselves that if it comes from the free market, it has to be good and moral. The problem with this line of thinking, is that just about everyone can exist in the free market, all sorts of frauds, quackery, scams etc, the free market usually rejects those schemes in time and bitcoins is still in the process of being judged by the whats left of the free market.

I believe in time, it will also be rejected by the free market just like all the other "conjure money out of thin air" schemes that has come before it

 

[Austrian Econ Disciple]

Why do so many libertarians support bitcoin?

Because they have all fooled themselves into thinking bitcoin has value in of itself. Once people realize this pos digital nothingness was just wished into existance by man, it will go down to the zero it was meant to be at. Sure you can transfer/store/divide/transact with bitcoins with extreme ease, but what does that mean if it has no value in of itself?

For the programmers out there, the true justification for bitcoin's value is a recursive function where the end base case is $.0000000000001. Somehow, I am supposed to believe that something valued at virtually 0 is supposed to become the rock that I store my family's wealth in?

Um what? Value is derived from individual's preferences, not from some innate 'intrinsic' objective value. I can't believe how many libertarians still believe this objective non-sense when it comes to money and currency. Bitcoin offers a lot of appealing properties for a medium of exchange, especially in the world we currently live in. It also solves some of the problems with commodity-based currencies (it can be transacted in infinitesimally small numbers). Of course Bitcoin isn't without its own problems (susceptible to Armageddon, extreme long-run encryption hacking, etc.), but its pro's vastly outweigh the cons. Also, instead of attacking the currency because it 'isn't gold', how about you get with Hayek and the times and diversify your currency assets (COMPETITION!), into precious metals and bitcoins? The more currencies the better.

 

[Austrian Econ Disciple]

Bitcoin has the potential for many desirable properties that precious metals lack. The big thing is that bitcoin is just starting out while gold has an extensive history. Do you suppose that gold was any more stable in value than bitcoin when it was first discovered and used?

Bitcoin does have a big obstacle to overcome: the transition from "investment" to the development of its practical desirable use as currency. The frenzy over buying it in order to see its value increase and then selling to reap those gains is doing two things: drawing attention to it (pro) and causing a lot of volatility (long term con).

The best thing, imo, to ensure the long term success of bitcoin is to actually USE it to buy and sell goods and services and to use the blockchain for the broader things it is capable of as a public record of ownership.

All currencies are bought and sold re: investment. In fact, it is the largest market in the world (FOREX). The price of bitcoins is an idictment against the devaluation of the dollar. As long as bitcoins are primarily priced against the dollar, you'll continue to see the volatility. I'm excited for when more goods and services start to become priced in bitcoin. At that point you'll see the coins start to become less volatile. At this point it should also be noted how we'll eventually hit the bitcoin wall (21million), which means the value of bitcoins will only go up as long as demand doesn't fall. The reason libertarians love bitcoin is not only for its extreme anti-inflationary characteristic, but also because of the ease of transaction, anonymity, outside of State and Banking control, and is decentralized, among a laundry list of other things.

It is also a big FUCK YOU to the IRS.

 

[Madison320]

Nothing has value "in and of itself". See my recent thread about "intrinsic value". Value is subjective.

So according to your theory, since intrinsic value value is subjective, everything is an equal store of value? We could all start subjectively valuing paper and dirt over gold and silver tomorrow?

 

[Shane Harris]

Why are the precious metal people so hostile towards bitcoin. Just ignore it if you hate it so much. Most of us who like BTC also like precious metals. We appreciate all of the concern but it feels more like resentment and bitterness than true concern over our hard-earned money. Take it somewhere else. Many Austrians such as Jeffrey Tucker and Stefan Molyneux recognize the potential of bitcoin. These people also realize the absurdity of some sort of SHTF stone age scenario where two thirds of the population dies and the rest of us start trading silver coins and bartering cows. You can look forward to that dystopia as much as you want but there's a much higher chance of btc being successful than that ever happening.

 

[extrmmxer]

Because it's decentralized, open source, peer to peer, open ledger, and completely voluntary. You understand that, then you understand the power behind it. Sounds good to me as a libertarian.

 

[robert68]

...
Gold has the expense of having to physically store it, protect it, transport it, etc. How do those expenses match up to that 20 cents? Gold is a good, and bitcoin is tantamount to a service (i.e., the payment processing aspect), what's the "intrinsic" value of its built in service, and the fact that it doesn't have to be physically stored, protected, transported, etc?

If one believes FRB is not economically viable, they may conclude that; otherwise there’s no gold storage and transportation cost to the individual when gold is backing notes.

The scarcity level of gold is not only unknown and not fixed (e.g., gold mined from asteroids), but it can even be created synthetically. We also can't predict the scarcity level of gold. Bitcoin, on the other hand, has a fixed limit, and it is known what the number of bitcoins in circulation is at any point in the future.

The production cost of gold is many times the market price of gold, rendering produced gold's affect on scarcity negligible.
http://en.wikipedia.org/wiki/Synthesis_of_precious_metals#Gold

 

[mczerone]

So according to your theory, since intrinsic value value is subjective, everything is an equal store of value? We could all start subjectively valuing paper and dirt over gold and silver tomorrow?

Value is subjective. There is no such thing as intrinsic value. A "store of value" is anything that you, personally and subjectively, predict will have value to you in the future, either as a direct consumable, or in trade value.

If you think "subjective" = "everything is equal", then you need a remedial vocabulary lesson.

 

[Neil Desmond]

If one believes FRB is not economically viable, they may conclude that; otherwise there’s no gold storage and transportation cost to the individual when gold is backing notes.

So, basically your point is that gold-backed "notes" or certificates are about as good as bitcoins?

The production cost of gold is many times the market price of gold. Gold is still scarce.
http://en.wikipedia.org/wiki/Synthesis_of_precious_metals#Gold

...

If the market value for gold goes high enough, it would be economically feasible to synthesize gold. The cost to synthesize gold places an upper limit on its market value; in other words, the price of gold will probably never go far above the production cost for synthesizing it.

If someone somehow comes up with a less expensive way to synthesize gold, one that costs less to produce an ounce of gold than the market value of gold, then that would basically cause the market price of gold to drop down to somewhere near the synthetic gold production cost; for example, if a solar cell is invented which can both harness more energy and be manufactured far less expensively than what's available now, and it makes it possible to synthesize gold at a production cost of say $800/oz, then the market price of gold will drop from its present rate of $1,250/oz to probably about $850/oz (max).

 

[PaulConventionWV]

So according to your theory, since intrinsic value value is subjective, everything is an equal store of value? We could all start subjectively valuing paper and dirt over gold and silver tomorrow?

Yes, we could, but we don't. That's the point. Anything could happen. Absolutely anything, anywhere, at any time can be money, but the market only chooses things that are best suited for that purpose.

 

[Barrex]

HOPE!

People hope that it is part of the puzzle that will free them from government. I too have positive feelings about Bit-coin but I am not investing anything substantial in it because I have too many reservations about it. If (lets keep possibility that things will turn to better) governments keep spiraling into debt and more taxes more and more people will use riskier and riskier ways to run away from government and its "solutions".