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Interesting Austrian Analysis of the Monetary Nature of Bitcoin

Can Bitcoins be hyperinflated?
Are Bitcoins the most saleable good?
Can Bitcoins account for the regression theorem?
What kind of money do Bitcoins classify as?
Are Bitcoins Anonymous?

The answers according to the analysis in this article:

Yes, they can be hyperinflated, but not in the way you would think.
No, Bitcoins can not be the most saleable good.
No, Bitcoins cannot account for the regression theorem.
Bitcoins classify as "token" money.
No, Bitcoins are the antithesis of anonymous.

Here is the article:

http://seekingalpha.com/instablog/7761841-patrik-korda/16163...




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My friend, since you're a

My friend, since you're a fellow Austrian check out the work by Peter Surda. Also check out themisescircle.org
Peter Surda wrote a thesis that will be soon published into a book published I think by laisezz fair.

“Economics of Bitcoin: is Bitcoin an alternative to fiat currencies and gold?”

dev.economicsofbitcoin.com/mastersthesis/mastersthesis-surda-2012-11-19b.pdf

(Copy and paste the above address to your URL.)

http://www.youtube.com/watch?v=yzMgiAJ1b-E

"We’ve moved beyond the Mises textbook. We’re running in the open market." - Erik Voorhees

I've read Surda's thesis and

I've read Surda's thesis and while I appreciate the effort to put some thought into the issues I can't say it impressed me analysis-wise. I've also read a lot of Surda's comments on the LvMI forums.

I wouldn't mind seeing some peer review of Surda's thesis, I just don't have time to do it myself. Short of that, Surda has already been rebutted successfully, IMO, by several in the LvMI forums (by Smiling Dave among others).

I'd like to see a bitcoin supporter address directly the Mises quote below. That address should demonstrate an understanding of the 'why' of the statement and also demonstrate how bitcoin isn't contrary to it. For the record, I have read several bc v. regression theorem arguments and have found them extremely weak - almost laughably so. Including Bob Murphy's short video which I've already commented about the noncommittal nature of (and speculated about why that was the case).

Thanks for keeping it civil :)

Awesome...

I will for sure be checking out the LvMi forum you recommended. Patrick Korda is someone I'm starting to read.

I'm still learning about all of this. You can join our discussion on the topic at www.themisescircle.org We would really appreciate your input comments and opinions.

"We’ve moved beyond the Mises textbook. We’re running in the open market." - Erik Voorhees

Decent analysis. I'd also

Decent analysis. I'd also suggest Smiling Dave's (google him/bitcoin) bitcoin analysis.

(Lack of) Accounting for the regression theorem is really the only nail in the coffin necessary, though. Says Mises in Human Action:

"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 all these statements implied in the regression theorem are enounced apodictically as implied in the apriorism of praxeology. It must happen this way. Nobody can ever succeed in constructing a hypothetical case in which things were to occur in a different way."

That's a mouthful, but clearly indicates that bitcoin is not compatible with the regression theorem. 'Apodictic' means necessarily true, that the converse is not possible. Why the regression theorem carries so much weight is a result of the Austrian method of economics, it's not because Mises was a smart guy or because he's worshiped. It's because the method is sound.

I need to read more about the

I need to read more about the regression theorem.

The thing I was most surprised about was the anonymity. I had thought it was virtually impossible to track transactions but one of the guys who wrote the code said "No, quite the opposite" everything is there permanently.

Themisescircle.org

YouTube the channel and watch our latest video with Peter Surda and Patrick Korda; Peter explain his position. Unfortunately Patrick had technical difficulties. We look forward to having both back at the circle to discuss the topic of the regression theorem.

"We’ve moved beyond the Mises textbook. We’re running in the open market." - Erik Voorhees