Then don’t state your theorem that way. Milton Friedman made his students aware of sloppy definitions, and I would think Mises was just as aware. There’s nothing wrong with being wrong.
Honestly I don’t care if it was irrationality that began bitcoin’s use as a money, that still doesn’t change the fact that it has served that function for over 2 years now, and with a much greater user base that I think anyone would have imagined (especially someone like Dave). (Pretty safe estimate at well over 100k users…which I guarantee if you said “I’ve got a brand new digital currency that isn’t backed by anything and has no value other than its use as a money…I bet I can get over 100,000 people to use it”, someone like Dave (and plenty of others, to be fair) would have tried to have you committed.)
I think dvide does an excellent job going into this in his posts in the other thread. It would seem it does take a bout of seeming irrationality to trade something which has an established real-world market value for something that doesn’t. But that doesn’t mean that same degree of irrationality is needed at every point in the future. As with almost everything innovators and early adopters take a certain level of risk, and in many cases the risk is quite high. But as time goes on, adoption of new technology poses less and less of a risk, and therefore requires less and less of a risk tolerance…which is what leads to more and more people adopting it…much like I was talking about with email and PDF. That’s an integral part of the whole technology adoption lifecycle.
And I guarantee you if 300 million Americans started using Bitcoin tomorrow, even someone like Dave would start using it. And he wouldn’t have to be “convinced” by anyone. He would do it out of convenience and because of the comfort gained from a low level of perceived risk based on the sheer number of users. Or as he would claim “because it would bring him happiness” as his use of email and PDFs did. And there is nothing I have heard that proves the varying risk tolerance of more and more people will not be met, as more and more people start to try it out and use it…simply because they feel more comfortable now that x number of other people are already using it. Every step of the way some unique user’s risk tolerance is met, meaning he gets added to the pool…meaning the perceived risk has gone down…which means a person with a higher risk tolerance is now satisfied. It doesn’t happen overnight, but a snowball is a snowball. The closest thing to an argument I’ve heard is “how are you going to convince all those people”. Which of course, isn’t an argument at all. (Not to mention is countered by Dave’s own admission that he didn’t need to be “convinced” by someone else to use new technologies he has adopted.)
And the entire crux of Dave’s argument is that that many people will never use bitcoin because he knows it will fail…and he knows it will fail because there is no flaw in his reasoning…his reasoning which is nothing more than “everyone agrees with me and feels the way I do (in that bitcoin will fail) and will act as I do because there is no flaw in my reasoning, and therefore bitcoin will fail, because I think it will fail and everyone thinks like me and they think it will fail, therefore it will fail because there is no flaw in my reasoning that everyone thinks like me and will act as I act because there is no flaw in my reasoning, which is that it will fail. And there are no flaws there. And everyone agrees because of that. And no one ever follows a flawed reasoning.”
I have not heard any argument that proves bitcoin would fail. I have not even heard one that proves it couldn’t be a success (as defined by being a widely accepted and recognized unit of exchange, like the US dollar.) The best I have heard is that it is like a hot potato and there there is a level of risk involved, in that people could suddenly stop wishing to accept bitcoins. But this is true of anything. The only difference is other things have a much longer track record and are much less likely to have that happen to them. But so what. It’s riskier. That is not a proof that it will fail.
I’m still wondering about this whole thing, but I certainly haven’t heard a very convincing argument on either side.