Why do you need an argument at all? Be merry buying/creating/exchanging your bitcoins and alow everyone else to refuse to do the same whatever their reasons may be. Not everyone bought the Dutch tulips, after all.
It’s silly to compare this to the dutch tulip craze.
Bitcoins do not degrade over time.
Bitcoins can not be grown in nearly infinite amounts.
Bitcoins do not take up wearhouse space or require delicate shipping methods
Bitcoins are divisible to 8 decimal places and retain their value, tulips do not.
In fact all the properties that make gold such a wonderful currency are inherent in Bitcoins.
Listen to this lecture by Block on money and then tell me which point Bitcoins don’t meet:
Block reiterates about 20 times in that video (that I have uploaded) that money is a commodity.
The fact that bitcoins are so easily tradeable should be a hint to it’s consumer and producer value (i.e. nil).
Bock reiterates about 20 times in that video that markets decide what money is, and if markets decide that bitcoins are money, then so be it.
Block says money must always start out as a commodity, but that does not mean that money must always remain a commodity.
Bitcoins are DIGITAL COMMODITIES - They are unique. They can not be arbitrarily replicated. They are valued for the properties they have.
At the end of the video Block lists off a series of properties that make Gold money. Everything that Block lists off, Bitcoin exceedes gold in terms of qualties.
Block says repeatedly that the key to a good money is that people are free to chose it. Markets decide what money is, and right now, the markets are deciding that Bitcoins are money.
That’s because you don’t want to see one.
False. I haven’t seen that argument at all. I’ve seen the argument that: “Bitcoins are not a commodity. Bitcoins have no non-monetary value (meaning they aren’t good for anything other than facilitating trade. Therefore Bitcoin is not a money.”
I’ve never heard anyone say “money has to be gold”. I’ve never heard anyone say “if it’s not gold, it’s bad”. I’ve never heard anything even close to that. It is a strawman you have created to characterize the arguments that you do not wish to hear.
I can use bitcoins to line the visor of my astronaut helmet?
You clearly have no idea what the word “commodity” even means. Is the output of a random-number generator a commodity? I would argue that the output of a random-number generator has more commodity value than bitcoins do. Note that this website gives away large volumes of random bits for free, so that should give you an idea of just what the commodity value of a “bit” really is.
Clayton -
I can’t sell random strings of numbers for 18 real world dollars right now, unlike a bitcoin.
Markets decide what has value and what money is.
@Suede: *shrug… I’m still looking for someone to loan me BTCs… if you’re willing to earn a big profit in BTC, I will sign a real-world contract with you to repay you 150 BTC in one year’s time in exchange for a loan of 100 BTC today. $18 is total bullshit and I’d be more than happy to relieve you of your unwanted money.
Markets do not presently decide what is money unless you define “market” in a very tortured way.
Clayton -
Why are austrians suddenly undercutting their positions when it comes to bitcoins? The increase in the price of bitcoin is not credit driven, nor even inflation driven. There is no reason for there to be a cluster of errors specifically in bitcoins. There are no policies favorable to buying bitcoins in place by the government. Nobody is giving out massive loans to people who aren’t good debtors in order to buy bitcoins. All the reasons for a bubble are absent in bitcoin.
Are we suddenly giving into the idea that the Bull and Bear actually Exist?
Just so you know, I have 4 bitcents, given to me for free from bitcoin faucet and bitcoin bonus.
@Sam: There doesn’t need to be artifical monetary expansion or government intervention in order for pump-and-dumps to occur.
And what commodity did bitcoins start out as?
And I find it interesting you have not even acknowledged any of my questions or responses to your accusations. Perhaps you’ll do us the courtesy of answering,
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Whats to stop a govenment from banning BitCoin at any moment?
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What happens to BitCoin IF it gets banned in the US?
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Also please address the issue that there is virtually nothing available to purchase with BitCoin.
They have all of the necessary properties of being a called a commodity and trade exactly like a physical commodity would trade.
My full response:
http://www.libertariannews.org/2011/06/06/libertarian-goldbugs-hating-on-bitcoin-free-market-money/
Did you also answer all of the points I’ve listed throughout this thread too? Because that would really increase the utility of my reading it. If not, would you please address those points here please?
I think so.
I didn’t realize I did not post that link in this thread yet.
It should address all the major points.
Max Keiser thought the article was good enough to run on his site.
Wait…you’re not even sure if an article you wrote addresses a few simple, and quite obvious, and incredibly important issues regarding the subject you have so vehemently been defending this whole time?
The article addresses the economics of the currency system.
Your questions on what would happen if the government bans the currency (which has nothing to do with its economic efficacy) are not addressed.
However, Bitcoin is a peer-to-peer network that is impossible for the State to shut down. A ban on the coins would only serve to make them more valuable and legitimize them as a real threat to the monetary monopoly. Bans make things more popular.
The government can not stop Bitcoins any more than it can stop Bit Torrents.
Further, it is a new currency barely two years old. it is ridiculous to expect it to be widely accepted at the present moment. It only recently gained national media attention. Further, it has only been in the past month that its value has reached a substaintial market capitalization, thereby making it worth retailers while to accept.
Did you even read your own thread? You so condescendingly accuse me of not reading an article that you claim to have posted (when you actually had not), and it does not even appear that you have even read the actual comments in this thread you created.
One more time. If bitcoins were declared illegal, (which would not be hard, as supported in the link) do you think any major business is going to accept them or deal with them in any way? Of course not. And who the heck is going to continue to use a currency that you can’t transact in with any reputable business?
@Sam Armstrong: There’s nothing in Austrian theory that says that speculative booms and busts are impossible absent government intervention. The ABCT argument carries so much weight specifically because it is not a random sampling of entrepreneurs who commit predictive errors… everybody gets it wrong during the inflationary boom.
In addition, the government does play an indirect ideological role in the rise of Bitcoin. People believe that fiat money is natural because at least a century of government propaganda and policy has all but turned the world upside-down in terms of the average person’s conception of money. Commodity money is seen as “inconvenient” “barbaric” “outmoded” and that “no one would voluntarily use it over the more convenient fiat money” while fiat money is seen as “backed by the full faith and credit of the government.” The fanaticism surrounding Bitcoins is based on the prevalent belief of the masses that fiat money is natural and would arise even absent government force. Believing the government’s propaganda that it has repealed the law of gravity by Act of Congress will not cause you to float when you jump off the cliff. Bitcoin believers are deluded, plain and simple.
Clayton -
“@Sam Armstrong: There’s nothing in Austrian theory that says that speculative booms and busts are impossible absent government intervention.”
I beg to differ.
Of all places to hear such nonsense, this is the last forum I would expect to hear it on.
ABT expressly says the manipulation of interest rates by government or private banks through manipulation of the money supply is cause of the boom bust cycles.
If the government isn’t directly manipulating rates through a central bank, then government has to protect private banking interests by preventing fraud charges from being filed against fractional reserve banks. That IS government intervention by not acting to protect private property rights.
Either way, it is the manipulation of interest rates by direct government intervention or government ignoring property rights that bring about business cycles.
Please explain to me how fractional reserve banking or interest rate manipulation would be possible with Bitcoins.
The nature of bitcoins is such that interest rate manipulation or fractional reserve banking with them is impossible.
I had forgotten to respond to this and Clayton got it. But to simplify and reiterate his point, he’s just saying bitcoins are overvalued. I suppose it depends on how exactly you want to define “bubble”, but what Clayton has been talking about in this thread is that the people involved in bitcoin are wrong. That’s it. His argument is that they mistakenly place more value on the bitcoins than they are actually worth in terms of all other goods in the market.
It’s the same as if I created a new company manufacturing widgets. Widgets aren’t really very useful now, but a lot of people are convinced that they will be in the future…people believe that widgets will be widely sought after as an alternative to some good most people already use (making them more valuable)…and of course the more people that use widgets the more useful they become (which in turn makes them even more valuable). Based on this belief about future value, people are willing to pay much more for shares in my company than they otherwise would.
This is what Clayton is saying is the case with Bitcoin. You don’t need new money being printed for people to mistakenly be willing to overpay for something and thus raise its price to an artificial level…especially not something starts off as basically a penny stock. It doesn’t take much for something that’s 6 cents per unit to see a price jump. And sure, if you look at it as a percentage, an increase to $20 over two years is ridiculous (which kind of supports Clayton’s point)…but you don’t need an increase in the money supply to show a 33,000% movement in something when that thirty-three thousand percent equates to $19.94.