Tuesday, September 24, 2013

Hans Hoppe: Bitcoin Is Not Money

Prominent libertarian philosopher and Austrian economist Hans Hermann Hoppe  does not consider Bitcoin a money.

Stephan Kinsella is in Turkey visiting Hoppe and Bitcoin apparently came up as a discussion point. Kineslla sent a short email to a number of prominent American-based libertarians, about Hoppe's thoughts on Bitcoin.

A copy of the Kinsella email was provided to me. Given Kinsella's views on IP, I am sure he will have no problem in my reproducing the relevant part of the email here. From Kinsella's email:
I'm writing you from Turkey--you need to get out more! 
Asked Hans: he said he dosn't think bitcoin is money. I asked him if he agreed if the regression theorem was a proof that only a commodity could become money; he dodged it by saying that in any case bitcoin does not violate the regression theorem -- since people spent money to purchase them b/c they valued them, for some reason--sort of like when people want a signature on a book or some collector's item.


  1. I guess that some people like the "idea" of money, that can't as easily be taken by others, even if it's not tied to a commodity, among other properties in difference to commodity based money.

    It's too much a leap for me personally(for the moment, I might change my mind), but I don't begrudge those trying to make it work.

    That's why I find Kinsella's attitude towards it interesting, perhaps even contradictory.("cautiously optimistic", youtube.com/watch?v=mrNaizP_p9M, 48 mins in)

    It seems to me that a Bitcoin is an "intellectual property".(at least at the moment you trade in dollars, gold, or whatever for them)

    Using a Rothbardian style test in extreme for it, in conjunction with these discussions about rivalry, let's move in the opposite direction for a moment then the usual arguments about scarcity & rivalry and let's say someone was able create as many bitcoins as they wanted for themselves with no input beyond the original work done to learn how to do so(all arguments about whether that's possible aside for now).

    Here's what's interesting to me:

    Let's say there 100 bitcoins in existence, and our theoretical bitcoiner just created and deposited 100 bitcoins into his/her own account with his/her new discovery and will use them to purchase things:

    Someone has now just rendered bitcoins "non-rivalrous"(for himself). Has that damaged the other holders of bitcoin? What is their recourse?(think Federal Reserve)

    Is the person with the ability to create bitcoins ad infinitum a thief? Is he violating a written contract?

    What's the difference between someone crawling into a home at night and stealing jewelry and someone destroying the value of an idea(in this case, Bitcoin) by spreading it all over the place? Assume neither signed a contract even.

    Now, I'm not coming down on either side in this instance...I'm truly just posting/thinking aloud so to speak.

    It seems quite clear to me in the case of IP that if someone steals an idea from someone else and harm results that there naturally should be repercussions for that theft.

    I think Rothbard to date has still done the best job of talking about how that might work, with allowance for self discovery, the need to prove harm, etc. In doing so, he de facto supports the notion of ideas being "property".

    In that context, I just find it interesting that Kinsella likes the idea of Bitcoin, because in some ways it seems to directly contradict his anti-IP views(and if the vid is any indication, he might have started there...which would be at least logically consistent...but switched after his prediction of Bitcoin's demise hadn't come to fruition quickly).

    Feel free to discuss, I'm curious to read other people's thoughts.

    1. The scenario you suggest is impossible with bitcoin. To "spend" a bitcoin, the transaction goes on the public Ledger, which tracks the origin of every bitcoin. All bitcoin are controlled through this public ledger which is controlled collectively by anyone running the software. Production of new bitcoin is difficult to explain, but every new bitcoin must be confirmed by the public ledger.

  2. I find your smart aleck remark about IP to be amusing as you routinely repost entire articles on your site, or 75% of the article at least and then link over. Much more than just a teaser. You are using the article for content. Yet you try and pretend that you posting the Kinsella thing you are only doing because of his IP views?

    If you really believe what you are saying then I suggest you refrain from your common practice of posting 75% of an article to your site then linking over. Just post a small teaser and link please.

    1. My, my aren't the Kinsellette's sensitive. You obviously haven't noticed that Wenzel usually cuts off a story at a point that drives traffic to the site he is linking from, so that a person will want to read the rest of the story and click through.

    2. So your argument is that it's OK he uses other people's intellectual property without their permission as long as he's nice about it? Who gets to decide what is nice or approved? Will those people have guns?

  3. I'll wager that in a few years Hans will think differently.

  4. I am not sure how one man can tell another what is or is not money. HHH may not think it is money to him but if other people think it is to them and deal with each other in Bitcoins as we might use dollars, how does it matter that another thinks it is not money because it doesn't fit some tidy set of parameters he wishes to attribute to money?

  5. If people value Bitcoins as a currency and use it as such between others that also value it as currency, I am not sure how a third party who doesn't can tell them it isn't. HHH doesn't say why does he?

  6. I guarantee you that none of the 10,000 merchants signed up to BitPay know who Hans Herman Hoppe is. They sell their goods for Bitcoin, and get cash in their bank accounts. They make a profit. Bitcoin is not theoretical, it is real and in use. The debate is over.

    These Austrian School people need to get up to speed with technology and adapt their theories to reality.

  7. I'll keep letting you know that you are a douche when you don't publish my perfectly reasonable comments.

    We need people that are looking for truth in the movement for Liberty. Not IP lovers who gladly use others' work all the time for content. Do you ask permission for the use every time? Let's pretend that you don't routinely publish 75% of an article before you link over. Let's say it's just 10%. What gives you the right to republish ANY of it without permission Wenzel? I'm speaking based on your idiotic view of course. What gives you that right?

    I'll wait for this to not be published because you are a mental midget that really only reposts other's stuff. You are a regurgitator on your podcasts as well.

    I will admit that it is entertaining and educational to hear your regurgitations many times.

  8. Another view on whether bitcoin is money (Mises Institute - released yesterday)

  9. Bitcoins cannot be created arbitrarily or trivially. So, no, one cannot debase another's holding by simply "creating more". There is a control in the protocol that dictates how many bitcoins can be created over a period of time and this control is quite hardened - it is a feedback loop. If you create more, the mathematical solutions required to create them get more difficult. If less are created, the mathematical problem becomes easier.

    1. the whole bitcoin process is open source, meaning unlimited amounts of "coins" with the exact same characteristics can be "mined". the only difference would be in name. bitcoin has the advantage of first to market, but if their price rises enough, greed and speculation will create secondary markets in the other "coins", eventually exposing the obvious flaw.

  10. lol, so he's got the exact same position as Konrad Graf. Got it.