Sunday, October 7, 2012

This Week on the Robert Wenzel Show: Everything You Need to Know about Bitcoins



This Week's Guest is Trace Mayer
Trace Mayer


In this interview, I talk with Trace Mayer about bitcoins. Are they money? Will they ever become money? Do bitcoins violate the Ludwig von Mises Regression Theorem on what can become a money? Under what circumstances could bitcoins become a popular medium of exchange? These questions and many more are discussed this week at the Robert Wenzel Show.


Direct Link

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11 comments:

  1. Technical comment: For those of us with limited bandwidth and/or without internet flat rate, it would be great if you could reduce the size of the podcast audio files. This one comes in at some 79 MB, which I find way too big. Very fine audio quality for interviews can be achieved with much smaller files (say 0.5 MB per minute of audio), in my opinion.

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    1. Anonymous, why so shy? :)

      I will make your request come true, despite you not having a name! Glad to do it! I will do that for the next interview on.

      We just switched to a nice recorder for Mr. Wenzel to use, instead of phone recordings, so I hope everyone is enjoying the sonics better than before. The guest are still phone recordings, so I am doing the best I can, and will always look for better ways to improve the sonics.

      Thank you for bringing this issue to my attention.
      John Daubert, Head of Editing and Mastering.

      Delete
    2. Thank you for bringing this to my attention. I will make a smaller mp3 of 128, (at least, depending on quality) from the current 320 for all future interviews. Sorry for the large file.

      Note: We just added a recorder for Mr. Wenzel to use at his location, instead of recording the phone call. So, we hope this interview sounds better than the rest. The guests however, are still recorded over the phone.

      Thank you again (name?)for bringing your concern to my attention. We hope you are able to listen to next week's 128 rate Podcast. Please inform as needed.

      John Daubert,
      Head of Editing and Mastering

      Delete
    3. Thanks for the new voice recording system, it is much better on Roberts end.

      Have you ever thought about using direct online methods (skype, etc) where the guest can use a mic connected to their computer? I suppose it depends on how comfortable the guest is in setting up the software..

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  2. Robert-

    Speaking as a Bitcoin advocate, thanks for addressing Bitcoin in an objective manner.

    Like email and the web, Bitcoin will be around as long as the internet is. Something may replace it someday, but probably not tomorrow. It's the currency of the internet that springs from the same tools and materials that are the foundations of computing science and the internet itself: networking, cryptography and validation of data. I trust the laws of mathematics far more than I trust the judgements of my fellow human beings.

    Bitcoin is a rational money. Many people don't have a rational grasp of economics but are going to have to adopt one as paper continues to fall apart.

    In closing, I think we can all agree that gold and silver dealers can be among the most conservative in the money trade. What originally made me sit up and take notice of Bitcoin were the growing number of PM dealers trading their metals for bitcoins:

    https://en.bitcoin.it/wiki/Trade#Precious_.26_Base_Metals.2FCoins

    I encourage people to do their due diligence and educate themselves about Bitcoin. It's a complex but rewarding topic.

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  3. Bob, about "regression theorem" and origins of money: have you read "Debt: The First 5,000 Years" (http://www.amazon.com/Debt-The-First-000-Years/dp/1933633867)? If yes - any comments?

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  4. On Bitcoin and the Regression Theorem:

    Bitcoin: A New Commodity Created To Serve Market Demand
    http://www.economicpolicyjournal.com/2012/10/this-week-on-robert-wenzel-show.html

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  5. The regression theorem *is* a necessary condition for something to be money. If some good were to start circulating as money even though it did not have value in and of itself, it would not do the job. In other words, the fact that something starts circulating as money is proof that it has value in and of itself.

    Therefore, Bitcoin does fit the regression theorem. The first demand for Bitcoins existed in a select few people who admired the system and wanted a neat toy to play with, not necessarily to pay with.

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    1. On the other hand, one could argue that since bitcoin is a form of money, it disproves the regression theorem, or it at least demonstrates that the regression theorem is not a necessary condition.

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  6. Corrected link in previous post:

    Bitcoin: A New Commodity Created To Serve Market Demand
    http://tinyurl.com/3e85xr8

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  7. As far as its prior to being money per se, in terms of talk of the regression theorem, we can say its first valued use is in fact as a medium of exchange. That may sound recursive, but you have to ask what makes it special, when it doesn't have wide recognition. Its value as a medium of exchange comes from special attributes that NONE of the other monies have. See: The Silk Road.

    http://www.forbes.com/sites/andygreenberg/2012/08/06/black-market-drug-site-silk-road-booming-22-million-in-annual-mostly-illegal-sales/

    It might be better to treat it as a currency and NOT a money per se so long as people currently store their earnings in other things. But that's fine. Imagine if paypal offered "paypal units" that you can then fund by conversion from dollars or other currencies. These paypal units would be a medium of exchange--an electronic currency.

    Problem is, there wouldn't be much value in using it over anything else, because for one thing it is extremely vulnerable to state intervention and totally unsafe. Just look at what happened to wikileaks donations system. Political pressure stopped Mastercard and Paypal from providing the means of donating, and in fact froze their funds. This is where bitcoins comes in (and did in fact).

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