Is BitCoin the currency of the future?

[ClaytonB]

http://mises.org/humanaction/chap17sec4.asp

In paragraph 7 he states:

no good can be employed for the function of a medium of exchange which at the very beginning of its use for this purpose did not have exchange value on account of other employments.

and

It must happen this way. Nobody can ever succeed in construction a hypothetical case in which things were to occur in a different way.

However, I do not see how any of his previous premises or conclusions back up those two statements.

I can’t find the cite right now, but I recall watching a lecture where Dr. Hoppe expounds one of the axioms of praxeology that a human will never exchange a less valued thing for a more highly valued thing. This is true by definition since valuation is evidenced by the act of exchanging (revealed preference). Hence, in order for a good to be used in indirect exchange, it must first have value in direct exchange and, since no one will ever exchange away something of higher value (say, an apple) in order to get something of no value (a string of bits, a piece of paper with the word “Money” printed on it, etc.) we can conclude that Mises was right. “No good can be employed for the function of a medium of exchange which at the very beginning of its use… did not have exchange value on account of other employments.”

Does anyone know where there is a list of common axioms in praxeological arguments? This would be nice to have as a reference for these sorts of discussions.

I assert that he is affirming a disjunct by claiming that because his solution to the problem is proveably true then there can be no other solutions to the problem.

No, that’s not what he’s saying, he’s saying that “since we’ve assumed that a person will never exchange away something of greater value for something of lesser value, therefore, no good can be employed for the function of a medium of exchange which at the very beginning of its use… did not have exchange value on account of other employments… and … it must happen this way. Nobody can ever succeed in constructing a hypothetical case in which things were to occur in a different way … assuming that a person will never exchange away something of greater value for something of lesser value.”

In fact, he states that it’s impossible to construct a hypothetical case in which things were to occur in a different way of which I provided two such cases

You have not constructed such a hypothetical case that is consistent with the praxeological axiom that a person will never exchange away something of greater value for something of lesser value. Think carefully about your island example, it necessarily requires that the participants willingly exchange away things of greater value for things of lesser value.

and BitCoin is currently an empirical case against him in that it is used as a medium of exchange.

BitCoin is not a money. I can’t buy a bag of potatoes with BitCoins anywhere on the face of the planet.

Clayton -