07 Apr 2014

Murphy Talk at Texas Bitcoin Conference

Bitcoin 17 Comments

Somebody put up the audio of my talk at the Texas Bitcoin conference. I thought the best contribution I could make was to explain to the evangelists why the orthodox libertarians were going to resist their message. So this is mostly about Austrian monetary theory, not Bitcoin. Also note that this only captures my main talk, not the Q&A in which I was on fire.

17 Responses to “Murphy Talk at Texas Bitcoin Conference”

  1. Tel says:

    “Resist their message” sounds a bit strange for a currency based on free association. Some people use it, some people don’t, it works or it doesn’t.

    • Major_Freedom says:

      Don’t forget, free association includes freely communicating (on private property with the owner’s consent), that you ought not do this or that you ought do that.

      Free association includes people voicing their opinion that others should do something else instead.

      • Tel says:

        Free communication to those people who take an interest.

        As for “you ought not do” are you claiming Bitcoin is immoral?

  2. guest says:

    Mr. Murphy, I contend that bitcoins have always had zero use-value, rather than just very low value; that it’s the computers that are used to send patterns that have the use-value, instead. You can copy bitcoin patterns, repeatedly, and patterns aren’t things.

    What would be the argument from Bitcoin adherents as to why they wouldn’t arbitrarily accept dirt as money?

    • Peter Šurda says:

      In a way, you are correct, but in another way, you are wrong.

      Following the Kinsellian anti-IP approach, indeed patterns aren’t objects of human action, rather computers (and networking infrastructure) are. However, innovative protocols increase the value of this computer infrastructure, just like the internet (which is also just a bunch of protocols) increased their value. We use computers, but because these protocols were designed, the use of these computers when they agree to communicate using the protocol is more valuable to us than if they didn’t. Similarly, other human beings are more valuable to us if we have a language (which is also a protocol) than if we didn’t, because, among other things, we can learn more easily from each other in a society with language than in one without one.

      So there are contexts in which saying that bitcoins have use/exchange value is inaccurate and it is more accurate to say that bitcoin increases the value you can derive from computers and network infrastructure. And since the control over bitcoin balances is exercised by using the private key, it is the objects storing the private key (e.g. coins/papers/drives/brains) where the value manifests itself.

      • guest says:

        (+1 for noticing the connection between Bitcoin and the IP issue, by the way.)


        … innovative protocols increase the value of this computer infrastructure …

        … it is the objects storing the private key (e.g. coins/papers/drives/brains) where the value manifests itself.

        This is just another form of the labor theory of value, which denies subjective value; The bitcoins are infused with value, in your view.

        This is why I keep saying that bitcoin values are completely arbitrary.


        We use computers, but because these protocols were designed, the use of these computers when they agree to communicate using the protocol is more valuable to us than if they didn’t. Similarly, other human beings are more valuable to us if we have a language (which is also a protocol) …

        Now that’s an interesting argument because it seems like whatever I do with computer protocols I have to do with human languages.

        Languages are patterns of sound, and they only have meaning to things that are aware. Computers are not aware; it is people that interpret the 1’s and 0’s.

        If you were the only person to have existed, you wouldn’t need a human language, but you might want a way to record the amount of supplies you have. The code you would write could take many forms, some as good as others – so it doesn’t really matter what the code looks like, so long as you can interpret it. So it’s not the code that has value, but rather the media with which you preserve it.

        And if there were two of you, you wouldn’t need a language unless it was profitable for both of you to know what the other was willing to offer in trade. The language could take many forms, so it doesn’t matter what the language is – the value isn’t in the language, itself. The value is in what the other has in trade.

        So, whether we’re talking about computer code or human language, it’s not the patterns that have value, but the minds that interpret the patterns.

        • Tel says:

          So, whether we’re talking about computer code or human language, it’s not the patterns that have value, but the minds that interpret the patterns.

          Except that very few people directly interpret computer protocols, and yet some are still more popular than others. For example token ring died a natural death, but IEEE Ethernet is thriving… they do the same job, but one gets used and the other does not… so there would be a reason for that, hmmm?

          How many people do you think have personally compared the readability of a token ring packet to an Ethernet packet?

        • Peter Šurda says:

          This is just another form of the labor theory of value, which denies subjective value; The bitcoins are infused with value, in your view.
          This is a complete misrepresentation of what I said. I did not say the storage of private keys is the source of value, but its manifestation. Similarly as, say, a book is a manifestation of value of language.

          This is why I keep saying that bitcoin values are completely arbitrary.
          Now, this is an objective theory of value. Value can only manifest itself through human action, through control over scarce resources. And prices only emerge through exchange. There is no other way for them to emerge, and objecting to them is a denial of foundations of the austrian school.

          If you were the only person to have existed, you wouldn’t need a human language, but you might want a way to record the amount of supplies you have.
          Yet without a language (or arithmetics), you have no way of recording the amount of supplies even if you’re alone.

          So, whether we’re talking about computer code or human language, it’s not the patterns that have value, but the minds that interpret the patterns.
          Yes, but this is not only specific to things like language or Bitcoin, it affects almost any good apart from those catering for basic biological needs.

          • guest says:


            Now, this is an objective theory of value. Value can only manifest itself through human action, through control over scarce resources.

            No, no. I keep trying to hammer this point home: A distinction needs to be made between subjective value and arbitrary value.

            The reason you wouldn’t eat a glass bottle is because it literally can not sustain you. Your subjective valuation of a sandwich is that it objectively satisfies a preference of yours.

            Merely believing hard enough that a glass bottle will sustain you wouldn’t make it so.

            Likewise, believing hard enough that non-commodity units of account are money wouldn’t make them so.

            To clarify: By money I mean a widely traded medium of exchange which can be used to enable a double coincidence of wants without the use of fraud.

          • guest says:


            Yet without a language (or arithmetics), you have no way of recording the amount of supplies even if you’re alone.

            Yes, but it wouldn’t matter what form the patterns (not “language”) took. The patterns could be long, short, redundant, etc.

            The patterns, themselves, aren’t what’s valuable. It’s what the patterns MEAN that’s valuable.

            And since bitcoins don’t mean anything, they can’t be money.

    • Joseph Fetz says:

      “… I contend that bitcoins have always had zero use-value”

      You can contend what you want all day long, that doesn’t make it true. Bitcoin is first and foremost a service, bitcoins derive their use-value from this fact (one cannot utilize the service without the bitcoins themselves). And if you don’t understand the value of the Bitcoin service (or the utility that it has), then I recommend that you read Satoshi’s white paper, it makes it pretty clear why such a thing would be valued.

      Like many people, you are attempting to apply the considerations of tangible goods upon an intangible good. This is where everybody gets screwed up. And while there may be some arguments to be made as to whether a bitcoin can be property and thus be owned (something that both Kinsella and I have brought forward), there really is no argument to be made regarding whether bitcoins have use-value (they quite obviously do).

      “What would be the argument from Bitcoin adherents as to why they wouldn’t arbitrarily accept dirt as money?”

      This is just a really dumb question.

      ………………………..
      While I am not in the pro or anti Bitcoin camps, I do make great efforts to understand it (just like anything else that is happening in the world). Part of this effort is spent on theoretical concerns, but it also requires one to immersed themselves into the practical world of Bitcoin. I don’t personally have a Bitcoin wallet or any bitcoins, but I have spent a great deal of time in the underground agora and have observed the Bitcoin community in action.

      There are many people who use nothing but bitcoins for almost all transactions. They don’t even know most dollar prices anymore because they haven’t used them in years, they can only price most things in terms of bitcoins. They get paid in bitcoins, they buy food with bitcoins, they pay rent with bitcoins, they are unbanked, etc. Many of these people have formed communities by which they all transact in nothing but bitcoins.

      I (and many others) have observed the possible emergence of an independent Bitcoin purchasing power occurring in agorist communities, yet you’re here trying to say that bitcoins have no use-value.(!) The use-value question has already been answered (you’re late to the game), but even if it hadn’t, then objective reality would have shown that bitcoins do indeed have an exchange value and that that exchange value surely didn’t just spring forth from the ether (there must have been use-value prior).

      • Tel says:

        “What would be the argument from Bitcoin adherents as to why they wouldn’t arbitrarily accept dirt as money?”

        I’ll accept dirt as money, how many acres are on offer here? With or without a supply of fresh water?

  3. Keshav Srinivasan says:

    Slightly off-topic, but in the comments of Bob’s last Bitcoin post I asked a technical question about Bitcoin smart contracts:
    http://consultingbyrpm.com/blog/2014/03/michael-goldstein-on-the-anarchist-roots-of-bitcoin.html#comment-339502

    I didn’t get an answer, so I just posted it on a Bitcoin Q&A site:
    http://bitcoin.stackexchange.com/questions/24401/can-the-bitcoin-blockchain-eliminate-the-need-for-trusted-computing-in-smart-con

    • Keshav Srinivasan says:

      Sorry for the double post.

  4. Keshav Srinivasan says:

    Slightly off-topic, but in the comments of Bob’s last Bitcoin post I asked a technical question about Bitcoin smart contracts:
    http://consultingbyrpm.com/blog/2014/03/michael-goldstein-on-the-anarchist-roots-of-bitcoin.html#comment-339502
    “One issue with this occurs to me: even if you specify the code for the computer program in advance in the contract, who runs the program? If one of the two parties runs the program, what if they misrepresent the output of the program? Akin to how transfers of Bitcoins are verified, can you use the blockchain and proof-of-work protocols to verify that the output of a code was really what it was claimed to be? In other words, could you have miners that each run the code on their computer and see what the output of it is, and then have a proof-of-work protocol to show that they really did run the code and are accurately reporting the output of it?”

    I didn’t get an answer, so I just posted it (with more detail) on a Bitcoin Q&A site:
    http://bitcoin.stackexchange.com/questions/24401/can-the-bitcoin-blockchain-eliminate-the-need-for-trusted-computing-in-smart-con

    • Silas Barta says:

      Good question, Keshav. I just posted an answer.

      • Keshav Srinivasan says:

        Thanks Silas. I posted a comment on your answer.

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