19
Jun
2014
A Conversation on Bitcoin, Gold, and Music
Tatiana Moroz had me and Amagi Metals’ Stephen Macaskill on her show to discuss sundry topics, including the launch of TatianaCoin which is an intriguing new way for artists to crowd-fund projects from their fans.
I also shamelessly plug the Night of Clarity, at which Tatiana will be performing. It’s August 15. Larry Reed, Nelson Nash, Tom Woods, and David Stockman will be speaking. Plus, downtown Nashville is really hopping now. Come on down kids! Full details here.
Mr. Murphy, you say:
… the idea was, if, originally, we’re all on a tropical island, somewhere, and no one’s using dollar bills, anymore, and we start from scratch; the idea is, well, we couldn’t just pick up any random thing, and just say, “Hey, everyone, let’s use this as money”, because we wouldn’t know what its purchasing power was …
My contention is that this is exactly what’s happening with bitcoins.
According to the logic applied to bitcoins, this island scenario could in fact pick up any random thing and just start trading with it as if it were money.
This is why I keep saying that if the Austrians can bring themselves to accept bitcoins as money, then they must give up their insistence on the relevance of the Regression Theorem, since you don’t need to defend the purchasing power of money if it can be derived arbitrarily. Picked from a hat, even.
As soon as people on the island simply decide to trade handfuls of sand for things, well then it has a purchasing power, according to bitcoin adherents.
It’s the same logic being used when people say, “but it does have a purchasing power because I can go buy it with dollar bills”. It misses the point.
The importance of the Regression Theorem is that it defends the idea that the function of money is to, in a sense “carry” the subjective valuation of the good that you sell over to the good that you buy, such that you are still – like as with barter – comparing the value of the good you sell with the good that you buy.
(Further, the Theorem defends this idea *from* the notion that a central planner is sufficient for the creation of money, and therefore for all the benefits that arise from money. That’s why it’s so important.)
Without an attachment to utility, a thing is unable to do this communicating of information; because there’s no information to communicate. Information about what? Random guesses? How is that helpful?
… such that you are still – like as with barter – comparing the value of the good you sell with the good that you buy.
An increase in the supply of paper notes doesn’t simultaneously change the supply of a good, so people’s marginal values of those goods haven’t really changed.
The paper notes only make it *seem* as if they have. This fact is revealed in the form of higher prices in other sectors of the economy, later.
Couldn’t otherwise afford a house without artificially low interest rates? Prices of consumer goods later go up to reflect this; belatedly affecting what *really* happened at the time you took possession of the house: The house actually had cost more than you thought, and it left you with less purchasing power to buy other things.
The greater the malinvestment made, the greater the amount of theft (or readjustment back into conformity with actual consumer preferences) that was required in order to later hold onto those goods that were bought with new paper notes that were printed in excess of specie.
Instead of the theft being reflected in less nominal paper notes for other people, it is reflected in higher prices for other people – the effect is the same.
Bitcoins did not instantly become money.
They are not even money per se, yet.
Bitcoins were first traded by two parties. When that happened, bitcoins weren’t even money according to your definition.
It took messy trial and error for the valuations of bitcoins through exchanges to get where we wre today.
Speaking of which, chicks dig “messy trial and error”:
Aaliyah – Try Again
http://www.youtube.com/watch?v=xcIvIladNnQ
Does Tatiana Moroz read my posts?
Okaaaaay
It took messy trial and error for the valuations of bitcoins through exchanges to get where we wre today.
From beginning til now, bitcoin valuation has been arbitrary.
They don’t mean anything.
At any rate, money must be at least somewhat rare. If anyone can equally pick up handfuls of sand then it will never become currency.
Not entirely true. If a small amount of amber washes up on the beach, people living there will have a reasonably good idea that this is a rare item, because they don’t see it every day. As a rare item they know that other people generally won’t have any so it might be good for trading. This would apply equally well to gold, silver, coloured shells, and bitcoin.
At any rate, money must be at least somewhat rare. If anyone can equally pick up handfuls of sand then it will never become currency.
The supply of money doesn’t matter. The Keynesians make this mistake, but in the opposite direction.
And anyone *can* “pick up handfuls” of bitcoins – CTRL+C. The fact that the Bitcoin service doesn’t permit the same string of characters to be used consecutively by the same person doesn’t change the nature of bitcoins: As patterns, they are merely concepts, not things.
Or, let me address it this way:
Why would it be difficult to make transactions in something that was near-infinitely available to everyone?
If I really wanted to, wouldn’t you say that I could do it?
I swear, some people turn this issue of Bitcoin into a far more complicated issue than it needs to be.
The direct use-value of Bitcoin–and the bitcoins that represent the integrated unit of account that is inextricable from Bitcoin–is that of a service. It is a trustless and near costless means of transacting, and that is where it derives its use-value. This is not unlike something such as Western Union, MasterCard, VISA, and the like; except that those services aren’t trustless, nor are they costless; and they also use a separate unit of account, a currency that is controlled by a monopoly on issuance. A person certainly wouldn’t accuse these other transaction services as having no direct utility, and the would be quite ignorant if they did.
Bitcoin also uses its own fully-integrated unit of account, called “bitcoins” or “BTC”, which further make them ripe for use as a medium of exchange in their own right, not only due to them being entirely homogeneous–they’re essentially nothing more than identical electronic ledger entries–but also because nobody controls their issuance (their issuance is controlled exclusively by an algorithm that is present in the computers that do the work to check the ledger, or blockchain, to disallow double-spending). Quite obviously, these units have acquired their own exchange-value imputed from the value of Bitcoin as a service, and thus they have a price. In fact, one could say that the first bitcoin purchased was due to the very service that Bitcoin provides, but that obviously the first purchaser had no idea if this service would also be valued by others. Obviously, however, it was (valued by others).
But this now brings up the question: have bitcoins acquired their own purchasing power that is entirely separated from and unrelated to the direct utility provided by the Bitcoin network (i.e. the service)? Have they (bitcoins) become a money?
I would say that they have become money in very small and distinct markets, but certainly not in all markets. I’ve personally witnessed markets in which every actor within that market uses only Bitcoin for all exchanges. They buy all their goods and services with it, they pay rent with it, they get paid in it, they are entirely unbanked, etc; and what is more, they do these exchanges without any regard of what the spot price of BTC is on the online exchanges (in fact, they entirely rejected those Dollar prices). They would trade however many bitcoins they think the good or service is worth based upon how much they think a bitcoin is worth, and this price within these small and distinct markets seems to have settled upon a PPM that prevails within that particular market (which is to say that they all had a value of a bitcoin that prevailed generally within that particular market, and that was entirely separate from all other exchange values for bitcoins that exist outside of that particular market). It was an eye-opening experience for me, to be sure.
That is all that is required for a good (or in this case, an intangible good) to become a money; that all actors within a particular market use it as the general means of exchange. In the case that I witnessed, that is exactly what was occurring.
…
Of course, everything that I’ve said is entirely consistent and compatible with the Regression Theorem, and in fact, that theory only attempted to prove the origin of purchasing power. So it seems sort of strange in this respect that those attempting to pontificate upon Bitcoin and the RT automatically disregard exactly what it was that the RT attempted to prove.
Menger said something along the lines of, “value is not inherent to the good itself, but the service that it renders”. Böhm Bawerk reiterated the same idea, as did Mises. Of course, they were talking about tangible goods rather than intangible goods, but the understanding is the same.
Here, if you have a little time, read this:
http://hoohila.stanford.edu/workingpapers/getWorkingPaper.php?filename=E-91-3.pdf
Okay, I got this link from David, but it is certainly relevant to the topic.
Quite obviously, these units have acquired their own exchange-value imputed from the value of Bitcoin as a service …
As a service, Bitcoin could potentially record ledger entries for a near infinite amount of unique sets of numbers.
So, it’s not the bitcoins that have value.
The Bitcoin service CAN have value, if the unique sets of numbers (bitcoins) ever meant anything.
Bitcoins still wouldn’t be money at this point – they would simply serve to record the transactions of that which they represent – like the unique strings in the Prod_ID key field of a database table.
“As a service…”
Well, thank you for admitting that the primary problem that you were posing is no problem at all. If Bitcoin is a service, then it surely has direct use-value. Problem solved on that point.
“… Bitcoin could potentially record ledger entries for a near infinite amount of unique sets of numbers.”
And? I’m not seeing the relevance of this statement. That something can be divided almost infinitely is somehow a mark against it? Of course, this statement of yours is also inaccurate. Bitcoins (the unit of accounting used within the Bitcoin network) are limited to 21 million total units, and can only be divided to 8 decimal points. That certainly is not “infinite”, nor is it “almost infinite”.
“So, it’s not the bitcoins that have value.”
Um, they apparently do, they do in fact have a price!
“The Bitcoin service CAN have value …”
It in fact does, that’s why the units used within the service have an objective price. Surely, we cannot know the subjective valuations of each individual who values a bitcoin, but surely, we can objectively observe that it does indeed have a price in the real world. A price is nothing more than the objective resultant of subjective valuations in exchange. Certainly, if a price of a good (intangible or tangible) is apparent, then one can only conclude that such a price was the result of two (or more) subjective valuations in exchange. This is simple price theory.
“… if the unique sets of numbers (bitcoins) ever meant anything.”
Thanks for this entirely pointless and question-begging remark.
“Bitcoins still wouldn’t be money at this point …”
Considering that your former statements above had no cognitive basis in proving your position, how can you then say that bitcoins can’t be money? I’ve observed in the real world that bitcoins are being used as money. Sure, these were very small and distinct markets, but surely, bitcoins were objectively the money in such markets.
“… they would simply serve to record the transactions of that which they represent”
Bitcoins themselves don’t represent anything other than a unit, which is all that money itself represents. A transaction is an entirely different thing altogether. In all transactions (using commodity money, fiat currency, check, credit, or any other unit of accounting), the unit in question is passed from one agent to another, and this is all in order to use this intermediary unit in order to account for the movement of real goods from one agent to another.
Money’s entire purpose is to not only be used as an accounting unit (so that one can account for both profit and loss in their calculations), but also act as an intermediary between the trade of goods (which solves the problem of the double-coincidence of wants that presents itself in direct exchange, AKA barter).
So I’m not quite sure what you’re trying to say here. Are you trying to say that the accounting of the exchange of goods is a bad thing? Are you trying to say that one unit of accounting is better than another, and if this is what you’re saying, why is this the case?
This sentence seems to be very vague and inexact. Please, do elaborate on it!
“… like the unique strings in the Prod_ID key field of a database table.”
I think that I understand what you’re saying here, but certainly bitcoins themselves aren’t the valued object (after all, they’re intangible themselves and only act as an intermediary between the exchange of goods), but yes, Bitcoin is a system of accounting that publicly states who has control and usage of any particular amount of units of that good at any particular time.
If Bitcoin is a service, then it surely has direct use-value. Problem solved on that point.
This was never a point of contention.
Services aren’t money, and it is the computer equipment that is providing the service, NOT the patterns that are bitcoins.
Bitcoins (small “b”) still have no value, even though Bitcoin (big “B”) as a service, does.
That something can be divided almost infinitely is somehow a mark against it?
No, that something can be COPIED almost infinitely, which doesn’t correspond to anything which has a use-value, is a mark against its use as a money.
Arbitrarily restricting the patterns that are recognized by a service doesn’t change the fact that the patterns themselves can be copied forever; Therefore the patterns, *themselves* are not what have value.
How can a bitcoin be copied. It is, after all, a cryptological pointer. Let’s not confuse the physical from what is valued economically, and surely we can both agree that actors within the market value bitcoins in one way or another, as well as other non-physical phenomena.
It isn’t the job of the economist to make a normative statement regarding bitcoins that, “they aren’t physical, thus they don’t exist”, it is only the job of the economist to explain economic phenomena that occur in the real world around him. This was the entire point of Menger’s *Principles*, he believed that his methodology was in fact empirical, if only for the fact that he was causally explaining the real-world phenomena that were occurring around him. I agree with this, this is the role of the economist!
With that said, there is no doubt that Bitcoin exists and is being used in economic exchange, but you’re attributing to it functions that simply don’t exist.
Can Bitcoin be “COPIED almost infinitely”? No, it’s literally impossible. Can the algorithm of Bitcoin be used to create other cryptological system of exchange? Most definitely, and they have. But this is no different from an actor choosing between one transacting service or another. In other words, it is no different from any actor choosing between two alternatives within the market.
How does this represent a specific point at all? Especially considering the fact that this is the heart of all economic exchange (choosing between alternatives of goods)?
I never said that the patterns themselves have value, I said that the services themselves have value. So sure, dogecoin uses the same cryptological system as Bitcoin, but it isn’t Bitcoin. Why not let the market figure out which that they prefer? Why should we allow your arbitrary valuation be our guide in this?
“Therefore the patterns, *themselves* are not what have value.”
This is not only irrelevant to subjective value, but it is also not the case at hand.
What people want are goods for direct utility. That is all that they seek. That an intermediary good is used in order to facilitate this is a general boon for all involved. That this intermediary requires no extra investment or cost is even more of a boon. Add to that the fact that nobody can have monopoly control of this intermediary, and that nobody is charged with accounting for it (a third-party that takes a fee just to check the transaction), then you essentially have the perfect money. It is costless, trustless, and bankless. There is no middle-man, people can still trade goods for goods (just as money does, that is its entire purpose), but there never arrises the double-coincidence of wants, nor the added cost of physically mining the ore
Bitcoin is essentially a system that allows pure barter, but without any possibility of investment costs or the double-coincidence of wants. How that can be construed as being an economic bad in the normative sense, is entirely beyond me.
But yet, in the positive sense, it fits entirely within the Austrian economic framework. This seems to be your conjecture, that it does not fit within the Austrian economic framework, yet you’ve still not proven this. And the fact that it does exist in the real world is only another mark against you in this respect.
Due to my preference to break up my responses, I didn’t see the following, immediately:
I think that I understand what you’re saying here, but certainly bitcoins themselves aren’t the valued object … but yes, Bitcoin is a system of accounting that publicly states who has control and usage of any particular amount of units of that good at any particular time.
It seems that we’re coming together here.
This was my main point, yes; That bitcoins, themselves, have no value.
Regarding the tracking of who has control of how many units of goods, I would say this:
For the Bitcoin service to be doing this, the bitcoins would have to correspond to something which *is* a valued object, such as ounces of gold, or live performances by Tatiana Moroz.
Did I not repeatedly say that Bitcoin and bitcoin are inextricable? Bitcoin does not exist without bitcoin. That bitcoins are the integrated unit of account within Bitcoin? One cannot talk of bitcoins without reference to Bitcoin, or vice versa. They’re one in the same!
Of course, everything that I’ve said is entirely consistent and compatible with the Regression Theorem, and in fact, that theory only attempted to prove the origin of purchasing power.
When one’s explanation of the purchasing power of money is that “people are trading in it, and therefore it has purchasing power”, you don’t need a Regression Theorem.
Do I really need to be concerned about how people, once upon a time, used to trade directly, if all I have to do to prove that something is a money is to point to someone attempting to use it in indirect exchange?
This is what I mean when I say that, with their decision to recognize bitcoins as money, Austrians are necessarily ditching the Regression Theorem as being relevant (or having *ever* been relevant).
“When one’s explanation of the purchasing power of money is that “people are trading in it, and therefore it has purchasing power”, you don’t need a Regression Theorem.”
Actually, you do. A good, any good (intangible or tangible), cannot be used in exchange unless it was first valued in and of itself in some form or another. This is just standard logic. In fact, the first exchange of such a thing would be impossible if one didn’t first value it for some usage other than the use for exchange, because logically, such an exchange would never have occurred. This is, in fact, integral to the theory of subjective value.
Let’s say that I offer you two words in exchange for a pair of shoes. One of these goods is entirely tangible (the pair of shoes), the other is entirely intangible (my two words). But surely, you value both of these goods (tangible and intangible) in terms of use. Just my mere stating of the two words offer you direct utility, and certainly the shoes offer me direct utility. So we’ve established and exchange value, or price, for these seemingly unequal goods. But yet, we both value them more than the other, but what is more is the fact that we cannot use such a thing as a unit of account, nor do these things represent anything close to a purchasing power (i.e. not everybody will value my two words or your pair of shoes, so there cannot be a purchasing power attributed to either of these).
However, money is a different question altogether, because it is valued rather equally as a unit of exchange, such that the prices of goods reflect this PPM at an almost equal parity. Money itself has a value that all actors within a market agree upon, and thus the money prices that result are the same throughout a particular market.
This is what defines money (having a constant PPM at any given point in time, that prevails within a market), and that it is equally tradable for all goods within such a market.
The regression theorem only sought to do one thing: to explain how this PPM arrives, and why it is that all participants in a market regard the price of money as relatively equal at any given time.
“Do I really need to be concerned about how people, once upon a time, used to trade directly, if all I have to do to prove that something is a money is to point to someone attempting to use it in indirect exchange?”
Yes, because a PPM cannot ever come about unless a good was valued beforehand for some reason. The simple fact is that a good cannot have a price unless it was valued for some reason, and if it was valued, then it must have first had a price. As I explained in my last comment, a price is only the objective result of two subjective valuations in exchange. And since this is the case, an exchange cannot possibly occur unless one values the good that they wish to exchange for unless they wish to use it for some direct utility.
And it goes without saying that a purchasing power cannot arise unless there was a price of that good to begin with. You’re putting the cart before the horse and attempting to say that a homogeneuos price can come about before an initial price can arise. It’s nonsensical.
“This is what I mean when I say that, with their decision to recognize bitcoins as money, Austrians are necessarily ditching the Regression Theorem as being relevant (or having *ever* been relevant).”
But it is relevant, you simply don’t understand why it is (relevant). That’s not to say that you’re stupid or anything, it is only to say that I don’t think that you understand what the RT was explaining. It was explaining the PPM, that is all. In order to have a PPM, you must first have a price. And a price must necessarily mean that an exchange took place (i.e. two subjective valuations took place, and thus the exchange was made and resulted in an objective price). And certainly, if an exchange was made, then the parties to such an exchange must necessarily have valued the goods for direct use (tangible or intangible), for their own direct utility in and of themselves.
Actually, you do. A good, any good (intangible or tangible), cannot be used in exchange unless it was first valued in and of itself in some form or another.
We’re saying the same thing (at least in this particular case), but I think you’re missing my point.
An arbitrarily valued thing doesn’t need a regression theorem; The explanation offered would simply be: “I threw a dart”.
Of course, something that was valued in such a way doesn’t communicate subjective value, and so cannot be used as a money.
It seems like you might agree with me on this point, from what I’m seeing, lately.
Let’s say that I offer you two words in exchange for a pair of shoes. … But surely, you value both of these goods (tangible and intangible) in terms of use.
Your stating of two words would be a service, not a good.
If it were words that I wanted, I could say, or write them down, myself.
If I didn’t know what the words were (say I’m looking for information), the words would still be a service.
A service is merely an intangible good. The term “good” merely means that it is subjectively valued as good in the economic sense, as opposed to a bad in the economic sense. In other words, that it satisfies our wants. There is no requirement that a good be physical.
Often people do distinguish between the two by referring to physical economic objects as “goods” and non-physical economic objects as “services”, but this is only for mere convenience. A service is still a good, if only an intangible good. It still satisfies our wants. It still is valued. It is not a bad in the economic sense.
http://wiki.mises.org/wiki/Good
Quite obviously, these units have acquired their own exchange-value imputed from the value of Bitcoin as a service, and thus they have a price. In fact, one could say that the first bitcoin purchased was due to the very service that Bitcoin provides …
This is the Cost Theory of Value, which reduces to the Labor Theory of value.
Carl Menger showed that valuation doesn’t happen from higher-order to lower-order goods, but rather the other way around.
For example, in order for a diamond mine to have value, diamonds must first have value.
Likewise, in order for diamond broker services to have value, diamonds must first have value.
So, in order for the Bitcoin service to have value (as a bitcoin verification service), bitcoins must first have value.
Here is Joseph Salerno explaining Carl Menger’s Theory of Imputation (valuation happens in the opposite direction of production):
[Time stamped]
The Birth of the Austrian School | Joseph T. Salerno
https://www.youtube.com/watch?v=dZRZKX5zAD4#t=43m09s
No, this is not the cost theory of value, this is simple value imputation, not unlike Rothbard’s theory of production. At no point have I injected the idea of cost into my explanation of Bitcoin, but I did say that at the incidence of value, that the first bitcoin got its value from the service that the Bitcoin network provides. This idea is not at all in objection to Austrian economic theory, and in fact, it is entirely in congruence with it.
Please, explain to me how this has anything to do with the cost theory of value? I challenge you to do so!
In fact, it was Rothbard’s theory of production in which I’d first realized this fact of value imputation with regard to Bitcoin (and bitcoins).
It’s not a controversial point at all. I’m sure that almost every Austrian would agree with me that the first bitcoin sold obtained its value (and thus the object price from such an exchange) from the value of the Bitcoin network itself.
But as I’ve stated earlier, Bitcoin and bitcoins are integral and inextricable. One cannot exist without the other.
Please, explain to me how this has anything to do with the cost theory of value? I challenge you to do so!
I have already done so. If you wish to offer a rebuttal, please do so, explaining where my logic is flawed.
But choosing not to offer a rebuttal doesn’t relieve you of the need to do so.
Your challenge, as it stands, would be an exercise in repetition.
I swear, some people turn this issue of Bitcoin into a far more complicated issue than it needs to be.
The direct use-value of Bitcoin–and the bitcoins that represent the integrated unit of account that is inextricable from Bitcoin–is that of a service. It is a trustless and near costless means of transacting, and that is where it derives its use-value. This is not unlike something such as Western Union, MasterCard, VISA, and the like; except that those services aren’t trustless, nor are they costless; and they also use a separate unit of account, a currency that is controlled by a monopoly on issuance. A person certainly wouldn’t accuse these other transaction services as having no direct utility, and the would be quite ignorant if they did.
Bitcoin also uses its own fully-integrated unit of account, called “bitcoins” or “BTC”, which further make them ripe for use as a medium of exchange in their own right, not only due to them being entirely homogeneous–they’re essentially nothing more than identical electronic ledger entries–but also because nobody controls their issuance (their issuance is controlled exclusively by an algorithm that is present in the computers that do the work to check the ledger, or blockchain, to disallow double-spending). Quite obviously, these units have acquired their own exchange-value imputed from the value of Bitcoin as a service, and thus they have a price. In fact, one could say that the first bitcoin purchased was due to the very service that Bitcoin provides, but that obviously the first purchaser had no idea if this service would also be valued by others. Obviously, however, it was (valued by others).
But this now brings up the question: have bitcoins acquired their own purchasing power that is entirely separated from and unrelated to the direct utility provided by the Bitcoin network (i.e. the service)? Have they (bitcoins) become a money?
I would say that they have become money in very small and distinct markets, but certainly not in all markets. I’ve personally witnessed markets in which every actor within that market uses only Bitcoin for all exchanges. They buy all their goods and services with it, they pay rent with it, they get paid in it, they are entirely unbanked, etc; and what is more, they do these exchanges without any regard of what the spot price of BTC is on the online exchanges (in fact, they entirely rejected those Dollar prices). They would trade however many bitcoins they think the good or service is worth based upon how much they think a bitcoin is worth, and this price within these small and distinct markets seems to have settled upon a PPM that prevails within that particular market (which is to say that they all had a value of a bitcoin that prevailed generally within that particular market, and that was entirely separate from all other exchange values for bitcoins that exist outside of that particular market). It was an eye-opening experience for me, to be sure.
That is all that is required for a good (or in this case, an intangible good) to become a money; that all actors within a particular market use it as the general means of exchange. In the case that I witnessed, that is exactly what was occurring.
…
Of course, everything that I’ve said is entirely consistent and compatible with the Regression Theorem, and in fact, that theory only attempted to prove the origin of purchasing power. So it seems sort of strange in this respect that those attempting to pontificate upon Bitcoin and the RT automatically disregard exactly what it was that the RT attempted to prove. Yes, Mises did include Menger’s origins of money in his theory, but that was not its purpose.
Menger said something along the lines of, “value is not inherent to the good itself, but the service that it renders”. Böhm Bawerk reiterated the same idea, as did Mises. Of course, they were talking about tangible goods rather than intangible goods, but the understanding is the same, that value is subjective. In this case, the subjective value of the service of Bitcoin is its use-value, just like it is with any other service.
Here, if you have a little time, read this:
http://hoohila.stanford.edu/workingpapers/getWorkingPaper.php?filename=E-91-3.pdf
For the record, folks:
Joseph Fetz said:
http://consultingbyrpm.com/blog/2014/06/a-conversation-on-bitcoin-gold-and-music.html#comment-659303
… but certainly bitcoins themselves aren’t the valued object …
Just so I don’t get accused of deliberate trickery, I gladly admit that I am presenting this in a HIGHLY truncated form; Make of this what you want.
Yes, that is true. The valued object is what any medium of exchange can be traded for. I.e. the ultimate good that money is used to purchase. If money was the ultimately valued object, then surely you’d die.
Considering the context of which I was speaking (money as an intermediary good), this calling out of my statement is entirely disingenuous. And, you know it!
And just to be clear, I’ve also noticed that you’ve entirely abandoned you original position that Bitcoin has no direct use-value. Why is this? You’re now attacking me on every other point that original issue, yet you’re avoiding that issue (even though that was the original point that you brought up).
If I were to guess, I’d say that I’ve easily proven that Bitcoin does have direct use-value, so instead of confronting that issue, you’ve instead begun attacking me on every issue other than the one that I set out to prove.
Trust me, I’ve been around and have a thick skin. But never before have I seen a person evade the issue that they themselves brought about as much as you have. You made your statement, I disproved it. And every communication with you since then has had absolutely nothing to do with the original point. You’re evading.
Now, you can continue to argue with me about these other issues, which I have no problem with, I’ll argue and debate them with you. But it is QUITE clear that you’re evading the summary of your original comment, which is what my response was addressing.
You questioned the use-value of Bitcoin, and I gave it to you. But now you’re talking about some other stuff (Bob, be happy that I didn’t use the word that I wanted to use), that has nothing to do with the original contestation.
IOW, you’re trying to break me down through argumentation. Sorry dude, that just isn’t going to happen.
I don’t have a “wallet”, nor do I have a “bitcoin”. And if that whole system crumbled to the ground, I could care less. All I care about is explaining the economic phenomena that occur around me. But it is pretty clear that you have some sort of emotional attachment to your commentary on the subject, what it is, I do not know.
If you endeavor to make any sort of positive analysis of something, then it is my recommendation that you get a bit more thorough. It’s quite apparent that you aren’t being wertfrei, but are rather dealing and speaking from some sort of normative home. If you can shed that blanket of blind faith, then maybe we can speak on somewhat equal terms.
I wish you luck in your endeavors.
And just to be clear, I’ve also noticed that you’ve entirely abandoned you original position that Bitcoin has no direct use-value.
Show me where I ever said that Bitcoin, as a service, had no value:
[Comment]
Can Bitcoin Become Money?
http://consultingbyrpm.com/blog/2014/05/can-bitcoin-become-money.html#comment-525243
(Aside: I understand capital-”B” Bitcoin to be the verification service, while lower-case-”b” bitcoins are the patterns to which values have been arbitrarily assigned. I’m not usually concerned with the service, since it’s the computers doing the service and are those which have the value. So you’ll see me use “bitcoins” vs. “Bitcoin”, a lot.)
I think I know where the confusion is coming from.
Say I made a “GreenAlienCoin” service which arbitrarily limited the recognition of “GAC Coin” patters to those listed in a table.
The GAC Coins don’t represent anything that exists, and so, the service of accounting for Green Aliens has no value.
The service of being able to account for those things which *can* be accounted for *does* have value, together with the computers which facilitate that service.
Hope this clarifies my position.