I have authored a lengthly article on the economics of Bitcoins and why they are a perfectly valid alternative to a gold standard economy from an Austrian perspective.
The article gets into what makes money a money, and why Bitcoins meet all the criteria of a free market money according to Austrian theory.
http://www.libertariannews.org/2011/06/06/libertarian-goldbu...
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There is no reason to rehash this with another thread
going back, all of your past posts it were to spam your crappy blog.
There's also no such thing as
There's also no such thing as free money...
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Go Ron!
If you would prefer I copy
If you would prefer I copy the entire text of that article here and delete the link I will do so.
Its simply much easier and the formating is better if you read it on my news site.
I'm not sure why you think my news site is crappy either. I spent a lot of time on it and promote the Daily Paul on the front page of it.
I guess you just hate free market economics for some reason.
Affiliate links?
No thanks.
Your argument for bitcoins could be used with paper money
You argue that bitcoins are a commodity because they are created with software coding and software coding can have value. At the same time though paper money is created with paper and paper has value; so you could say that paper money is a commodity. The problem is that paper money is not a commodity, once the paper is printed on its value as paper becomes less than valuable (due to the price of its creation and lack of use) than normal paper. The same is true with bitcoins, the fact that they are software coding and exist doesn't give them value because the software that is created is both time consuming and inherently useless. This makes bitcoins the same as paper money; they are both fiat because they are both useless as anything except exchange.
Which excludes bitcoins from being able to be used as real money under Austrian theory.
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The need to transact on the
The need to transact on the internet is the commodity that bitcoins represent. Bitcoins are unique items that provide anonymity, trust, and transaction security on the internet. A commodity is an item that has a real use within the reality of the economy that it exists in. Bitcoins are a commodity because in the virtual world they provide a real use that currently isn't being provided in any other way.
Prior to bitcoins commerce on the internet was a hybrid using physical dollars represented digitally in bank accounts and the trust was provided by the third party bank or card processor who handled the transaction for a fee.
Bitcoins are not a hybrid, instead of being a digital representation of value that exists somewhere else, they are simply a digital store of value because they are valued for what they are. Bitcoins allow for direct trade because they are also trusted for what they are (even if the parties involved in the transaction don't trust each other), and require no middle man or even conversion to other currency in order for the transaction to take place.
Trust and reliability are the under-valued
commodity of our time. Government "watchdogs" just don't cut it.
The more I think about it
The more I think about it maybe its the cryptography that is the commodity, and bitcoins are simply a rendering of that cryptography into a form that can be used as money.
Just like gold can be melted into a coin to be used as money, cryptography can be compiled into a file to be used the same way.
The cryptography makes the
The cryptography makes the coins a commodity.
By making the coins fungible and unreproducible, the cryptography transforms electronic signals into a representation of a virtual commodity that is just as sound as a chunk of gold is.
The soundness of the currency lies in the power of its cryptography to prevent arbitrary replication or abuse.
So maybe its the actual bits
So maybe its the actual bits that are the commodity, the most basic commodity of the internet, ones and zeros, cryptography is the refinery that transforms the bits so they can be used as currency.
Whatever it is, bitcoins are money. I know I've bought and sold things with them.
Paper is a real commodity. It
Paper is a real commodity.
It is a fungible good that has demand.
The markets did not chose paper as a money because its scarcity and divisibility suck.
That is not a problem with Bitcoins.
Bitcoins are not fiat money because there is no government decree giving them artificial value. The market gives them value.
You misread me
I never said paper wasn't a commodity. I said paper money wasn't a commodity. In a fiat system the government can tag a price of exchange on their money but at the end of the day the free market decides its value. When people lose faith in that fiat money its value lowers and and merchants require more "money" in exchange for goods. In a system like this it is a possible for all demand to disappear and the money becomes worth nothing or near to nothing (as in Zimbabwe where the national currency's only value is as a tourist oddity.)
The bitcoin has no value in itself, the software just like the paper in printed money has a worth that is negated by its creation. Unless I can do something with a bitcoin its worth exists only by keeping up demand for it. When an items "value" is kept up by having more people by that item and there is no intrinsic value in that item, it is referred to as a pyramid scheme.
All demand for bitcoins are in their perceived value as money, not because there is an actual demand for them. Thus they are fiat.
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Bitcoins have value in and of
Bitcoins have value in and of themselves because the market says they have value.
This is in contrast to fiat money which derives its value from government decree.
Claiming bitcoins have no value is to claim the free market does not know how to value goods. Obviously bitcoins do have value because I can trade them for real goods and services as we speak.
Bitcoins are no more a pyramid scheme than gold is. Please explain how the emergence of gold as a money differs from the emergence of bitcoins as money.
FRNs & Bitcoins
Both have ONLY the value that the market gives.
Governmental decree can not make 20 FRNs equal a double-eagle, although they are the same denomination ($20).
If so, I've got a grip of FRNs to trade you for every St-Gaudens you provide.
Blog spam
is slippery and gets all over the place.
I don't think there is
I don't think there is anything particularly slippery about it.
To say it is "slippery" implies I am making deceptive arguments.
Not liking what I have to say does not mean I am being slippery with my wording.