I’m not saying bitcoin is money, but most of these guys made no reference to Mises regression theorem nor Rothbards able discussions of money substitutes. I my lecture last Saturday at the Crypto-Currency Con in Atlanta, I showed five different definitions of money used by the Austrians. My personal take is that even if, upon examination, Austrians were to come to a consensus that Bitcoin were money and that the regression theorem needed to be revised or thrown out, it would not mean a collapse of the rest of the system of thought. My take is that bitcoin may or may not be money, but what it has done is make a clear call for we Austrians to go back and reconsider all monetary theory and check for gaps. After studying this issue for almost a year, I’m beginning to think Bitcoin may fit the Regression Theorem BETTER than gold! As JP Morgan famously said: “gold is money, all the rest is credit”.
In time, the free market will decide if Bitcoin will be money, regardless of what definition of money is used. What, gold and silver are not money? Compare Bitcoin vs. gold or the US dollar. Compare the Bitcoin network against Visa, MasterCard, Paypal. The hard limit to bitcoin and the fact that it cant be defined bar it from ever being a measurement of value. The problem with currency is that it is a unit of measurement without a constant, it can not be defined and the only way to give it a constant is for people to start accepting it as a constant. Or can we only have currency competition that has been blessed by the high priests of the Austrian caste? Best of all, nobody can control the bitcoin framework. These are all currencies (that includes bitcoin). Are those currencies not money? I believe Rothbard would have included it in his measure of the money supply because it is instantly exchangeable for cash at par. Also joules aren’t of fixed value – any changes in the energy market would change the supply and demand – their price. How would you carry these “Joules” around with you? An inch is an inch because we say so, same thing with gram, meter, foot,gallon.
The “money or thing fallacy” is a great formulation. Currencies have counterparty risk (default on redemption obligation), money doesn’t. No fixed medium or commodity or crypto system will ever have objective value, since objective value is always subject to individual desires and needs. Right now, it is used as a payment system and as a commodity, but soon, I hope that it will be an everyday global currency. Will see where this goes. Basically,I am with Mises, as referenced by Dr. Woods: I don’t like how deciding whether something is or isn’t money depends on the vague qualifier “commonly used.” Is a national currency still money once it hits the hyperinflationary stage, maybe. The guy who said the CPI index must be labeled in bitcoins for it to be considered money was quite laughable, I’m guessing he still believes that dollars are the only real money in the world by those requirements.
I find it funny that 4 years later we are still arguing the ‘regression theorem’ aspect of Bitcoin which is something that I was a part of back in 2009-10 when it first went live at the original bitcoin forums. Let’s ask the question again in 5 years. The vast majority of these economists all weaseled out of the question by using their own vague definition of “commonly used”. I don’t think there is any need to throw out Austrian monetary theory, but Bitcoin forces us to look into it a little more deeply. Singapore Dollars are no more money to U.S. Bitcoin is looking good but needs to be more widely adopted. Your difference with them has nothing to do with the actual characteristics and use of BitCoin. It is currently the eve of 2018 and bitcoin is at the highest point of the mountain. People get caught up in the words, including translations of German words, and miss the point. There is no contradiction in content, only in the surface appearances of things, which is exactly what Mises said NOT to get caught up in. Basically it is a non-issue, and mainly reflects surface oriented (as in, not Austrian) interpretations of what the regression theorem actually says.
