Bitcoin isn’t worth much more of my time debunking the nonsense surrounding it. I will simply reiterate the key points:
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The Regression Theorem is praxeological… if Bitcoin or some other empirical fact disproves it, then humans do not prefer greater satisfaction of wants to lesser satisfaction of wants and we must revise our most basic ideas about what human nature is.
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Money experimentation is possible and the Regression Theorem does not say it is impossible. Bitcoin is certainly a money experiment but it is not money. I’ll quote Lew Rockwell on the subject:
Just imagine what would happen if legal tender laws were repealed and the government stopped intervention in the market for money. Virtually overnight, we would see the appearance of hundreds if not thousands of new payment systems and alternative monies online. Merchants would be free to accept any means of payment. There would be intense competition among them. Some would be foreign currencies like the Euro. Some would be new currencies based on existing commodities such as gold and silver. I’m certain that we would see a period of wild experimentation take place before the market settled back down again into a standard system that was famed for its reliability and stability and honesty.
Would we be able to endure the process of discovery? Certainly. We do this every day with our shopping online, or searches for good providers of services and products in the physical world, and our habits on how to invest our money. The market is a process of trial and error, one that never stops innovating and changing. We see everyday on the World Wide Web how this process of creation and change create the right balance between chaos and order, experimentation and standardization. This would happen in the field of money too.
I can envision Bitcoin as one of thousands of experimental monies emerging in the wake of currency denationalization as Rockwell vividly describes here. Bitcoin has the virtue that it is an experiment that can go forward despite currency nationalization… it doesn’t have to wait for denationalization. But I think that is Bitcoin’s only virtue and I believe that it is ultimately a doomed experiment based on theoretical considerations. That doesn’t mean I think it should be outlawed… more power to the people participating in it. But it does mean I will never hold a Bitcoin and if I were a venture capitalist I would have nothing to do with Bitcoin or Bitcoin-based businesses.
Clayton -