Hello, this is my first article in Yours.org although I've known the platform for a while and I love the idea behind it.

I sometimes think about writing down my thoughts and sharing them with the community, but I usually end up not doing it because I fear I won't really have too much to add to the conversation, or because I lack the knowledge or credentials. But I recently came across really unsubstantiated claims and opinions from people who is actually making it to the headlines while they really don't seem to know what they're talking about, so I figured I cannot be much worse than them, and heck!!, I also have an opinion...

Here's what finally pushed me to write this article:

Today I was watching the debate between Samson Mow and Roger Ver on Deconomy and heard a reference to an article written by Jimmy Song.

This is the YouTube video of the debate from Coingeek's channel starting when the conversation goes to the topic of number of transactions and the guy from Blockstream - who previously said he was giving his own opinion despite presenting himself as the "Chief Strategy Officer of Blockstream" - mentions an article from Jimmy Song.

And this is the article from Jimmy Song where he tries to portray Bitcoin Core as "the good guys", which in this context would mean the "Crypto-Austrians".

I actually read the article when it was published by Jimmy, and it really looked like he was way out of his depth on Austrian economics. I'm no economist, but I have read my share of Austrians, including Hayek and Mises, and my understanding about their positions led me to a completely different assessment of the situation.

Here you can also see the comment I left while still mad at Jimmy for trying to appropriate the ideas of my admired thinkers and make it look like they would somehow support what Blockstream and Bitcoin Core want out of Bitcoin.

As you can see, I did get carried away by emotions and I didn't make a big effort on refuting what the article said - which is usually what Coreons do. I admit I'm not proud of it. What I should have done was dig a little bit on the monetary writings from some authors from the Austrian School of Economics.

The research

The main reason for me not doing the research was because I thought it would take a lot of digging to find out what the Austrians thought about the BTC vs BCH issue.

But I actually found out something when I started looking for information about the Austrian Economists ideas on money: Jimmy Song is not clueless because it takes long to gather the information, he just didn't even try.

If you know a little bit about Austrian Economics, you would know that Ludvig Von Mises was one of the main authors on that category. And if you take a look at his books, you will notice there's one with the title: "The Theory of Money and Credit" . And it's actually available for free on the Internet. Here's the link from the Mises Institute:

So I guess we can agree: It's not hard to find information about what the Austrian Economists thought about money .

OK, but maybe I have to dive into this book and many others in order to get an understanding of their ideas on the subject... well, actually, you would be able to figure it out by just reading the first chapter with the title:

Chapter 1. The Functions of Money

The first chapter of the book has three sections.

On the first one, with the title " The General Economic Conditions for the Use of Money " we can already see where this is going:

"The function of money is to facilitate the business of the market by acting as a common medium of exchange."

Well, it looks like this alone counters the "Store of Value" narrative from Bitcoin Core, but let's not get ahead of ourselves and keep reading.

Not much further into the book, on the second section with the title " The Origin of Money " we can find interesting ideas on the sixth paragraph:

“The mere fact that there would be no exchanging unless it was indirect could not induce individuals to engage in indirect exchange if they secured no immediate personal advantage from it. Direct exchange being impossible, and indirect exchange being purposeless from the individual point of view, no exchange would take place at all. Individuals have recourse to indirect exchange only when they profit by it; that is, only when the goods they acquire are more marketable than those which they surrender.”

Mises is talking about liquidity here, but liquidity is not what Samson Mow tells us, liquidity also has to do with the amount of friction involved on transactions. You do not profit from using a currency with high fees and unreliable confirmation times, I guess even the proponents of the Blockstream/Core vision admit this when they say they want "digital gold" instead of a currency.

And on the same section we can also see what Mises thought about the requirements for some goods to become "media of exchange":

“Now all goods are not equally marketable. While there is only a limited and occasional demand for certain goods, that for others is more general and constant. Consequently, those who bring goods of the first kind to market in order to exchange them for goods that they need themselves have as a rule a smaller prospect of success than those who offer goods of the second kind. If, however, they exchange their relatively unmarketable goods for such as are more marketable, they will get a step nearer to their goal and may hope to reach it more surely and economically than if they had restricted themselves to direct exchange.

It was in this way that those goods that were originally the most marketable became common media of exchange; that is, goods into which all sellers of other goods first converted their wares and which it paid every would-be buyer of any other commodity to acquire first. And as soon as those commodities that were relatively most marketable had become common media of exchange, there was an increase in the difference between their marketability and that of all other commodities, and this in its turn further strengthened and broadened their position as media of exchange.”

And then things get even worse for Jimmy's theory when we get into the third section - remember that we are still on the first chapter on the book, probably not more than ten minutes reading.

Here's what Mises wrote about " The 'Secondary' Functions of Money ":

The secondary functions of money emerge from the primary function as a medium of exchange:

"The simple statement, that money is a commodity whose economic function is to facilitate the interchange of goods and services, does not satisfy those writers who are interested rather in the accumulation of material than in the increase of knowledge. Many investigators imagine that insufficient attention is devoted to the remarkable part played by money in economic life if it is merely credited with the function of being a medium of exchange; they do not think that due regard has been paid to the significance of money until they have enumerated half a dozen further "functions"—as if, in an economic order founded on the exchange of goods, there could be a more important function than that of the common medium of exchange.

After Menger's review of the question, further discussion of the connection between the secondary functions of money and its basic function should be unnecessary. "

Another relevant statement for this conversation:

"The functions of money as a transmitter of value through time and space may also be directly traced back to its function as medium of exchange. Menger has pointed out that the special suitability of goods for hoarding, and their consequent widespread employment for this purpose, has been one of the most important causes of their increased marketability and therefore of their qualification as media of exchange. As soon as the practice of employing a certain economic good as a medium of exchange becomes general, people begin to store up this good in preference to others. In fact, hoarding as a form of investment plays no great part in our present stage of economic development, its place having been taken by the purchase of interest-bearing property. On the other hand, money still functions today as a means for transporting value through space. This function again is nothing but a matter of facilitating the exchange of goods. The European farmer who emigrates to America and wishes to exchange his property in Europe for a property in America, sells the former, goes to America with the money (or a bill payable in money), and there purchases his new homestead. Here we have an absolute textbook example of an exchange facilitated by money."

So, as Roger Ver seems to perfectly understand - having said that he got into Libertarianism after reading yet another book from Luidvig Von Mises titled "Socialism" - people choose as money goods which were highly "marketable", or to put it in other words, goods which they expected other people to want. And then, among those things for which there was already high demand, the goods suitable to be hoarded (remember HODL?) were preferred.

Conclusion

The main point here is that neither Jimmy Song nor Samson Mow know what they're talking about when they try to call themselves Crypto-Austrians.

And this is not because it takes a lot of research to find out and they don't really have the time, it's because they didn't even try to understand it. That wouldn't be a big deal if they didn't actually try to lecture the rest of us supporting Bitcoin Cash by calling us "Crypto-Keynesians" because we care about the ease of use and the lack of friction of the system.

Yes, it is true that Keynes was focused on spending and money flow as the source of wealth and Mises considered saving and investing as the necessary requirements for a sound economy. But this has nothing to do with the properties of money. Money is a tool which needs to work correctly independently of the type of planning you want to apply to an economy.

Keynes thought he could "manage" the economy and achieve specific results by tweaking the money supply or redistributing wealth to "activate" some sectors at specific moments. He thought he could plan the economy and get to a desired outcome, while the Austrian Economists knew that the price system is the only way to coordinate production because no one person or entity can coordinate better than the market. But this again has nothing to do with how money works. In fact, Bitcoin Core could be thought about as a Keynesian proponent as they think they can decide which is the correct block size limit instead of letting the economic actors in the market make decisions freely based on the price information available.

I don't think the Austrians could even think about any form of money which required high fees in order to be exchanged. It probably didn't even cross their mind that somebody could consider such a technology "sound money".