Bitcoin does NOT violate Mises' Regression Theorem

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MoonShadow:

Quote from: satoshi on August 27, 2010, 05:32:07 PM



As a thought experiment, imagine there was a base metal as scarce as gold but with the following properties:

- boring grey in colour

- not a good conductor of electricity

- not particularly strong, but not ductile or easily malleable either

- not useful for any practical or ornamental purpose



and one special, magical property:

- can be transported over a communications channel







If you redact "over a communications channel" you end up with depleted uranium, and the US military has been "transporting" that stuff all over the middle east for two decades now. Talk about your long distance communications, the Barret 50 caliber can really "reach out and touch someone"! :D

chaord:

Quote from: satoshi on August 27, 2010, 05:32:07 PM



As a thought experiment, imagine there was a base metal as scarce as gold but with the following properties:

- boring grey in colour

- not a good conductor of electricity

- not particularly strong, but not ductile or easily malleable either

- not useful for any practical or ornamental purpose



and one special, magical property:

- can be transported over a communications channel



If it somehow acquired any value at all for whatever reason, then anyone wanting to transfer wealth over a long distance could buy some, transmit it, and have the recipient sell it.



Maybe it could get an initial value circularly as you've suggested, by people foreseeing its potential usefulness for exchange. (I would definitely want some) Maybe collectors, any random reason could spark it.



I think the traditional qualifications for money were written with the assumption that there are so many competing objects in the world that are scarce, an object with the automatic bootstrap of intrinsic value will surely win out over those without intrinsic value. But if there were nothing in the world with intrinsic value that could be used as money, only scarce but no intrinsic value, I think people would still take up something.



(I'm using the word scarce here to only mean limited potential supply)







This is actually starting to converge with this thread about the hypothetical "BitBox." http://bitcointalk.org/index.php?topic=911.0

manuelgar:

Quote from: xc on July 27, 2010, 02:09:27 AM



The Money Regression and Emergence of Money from the Barter Economy

The entire purpose of the regression theorem was to help explain an apparent paradox of money: how does money have value as a medium of exchange if it is valued because it serves as a medium of exchange? Menger and Mises helped break this apparent circularity by explaining the essential time component missing from the phrasing of the paradox.





Hello,



Menger did not detect any circularity at all. That circular question is falacious because it would apply to any economic good, for example: How does bread have value as food if it is valued because it serves as food?



Regression theorem was a missused Menger´s origin of money to develop his regression theorem, and he developed the regression theorem because he could not tolerate how fiat money was defeating commodity based money.



But the truth is that monetary utility is valuable enough by itself. There is no need to any previous link. Bitcoins are money because they have good monetary properties and because they are present goods (i.e. they are not anyone else´s liability).



I´ve written a short post about this: http://eleconomistaprudente.wordpress.com/2011/06/06/bitcoins-and-mises%C2%B4s-regression-theorem/

Vinnie:

Good thread, thanks for the bump!

billyjoeallen:

this post is smothered in awesomesauce. bump.

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