Many people who have never used bitcoin look at it with confusion. Why does this magic Internet money have any value at all? It’s just some computer thing that someone made up.
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My talk at the Texas Bitcoin conference revolved around the Austrian approach to money, and why some Austrians (quite understandably) were uncomfortable with Bitcoin. (Apparently you have to pay $50 if you wantaccess to all of the videos, which is worth doing if you want to learn a lot about Bitcoin. But the content of my particular talk can be cobbled together from other things I’ve written previously.) I concluded that even though there is a superficial tension, Mises’ regression theorem really has no bearing today on whether Bitcoin has the ability to become money.
Recently, there has been a rising wave of interest in a new Internet-based currency called bitcoins. In one sense, bitcoins are the latest attempt to improve capitalism through monetary reform. But unlike other monetary reform schemes, bitcoins are very 21st century, based as they are on modern computer technology and the Internet.
My post from yesterday was perhaps not specific enough, so let me outline one possible scenario in which the value of Bitcoin (and other cryptocurrencies) would fall apart. For purposes of argument, let’s say that a year from now Bitcoin is priced at $500. Then you want some Bitcoin, let’s say to buy some drugs. And you find someone willing to sell you Bitcoin for about $500.
Curated by jean lievens
Economist, specialized in political economy and peer-to-peer dynamics; core member of the P2P Foundation
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Not TINA (There Is No Alternative) but TAPAS: THERE ARE PLENTY OF ALTERNATIVES