Thursday, February 27, 2014

Libertarians and Bitcoin

Jaison De Montalegre emails:

Reading through the blog and other websites I frequent I have to say it's really frustrating that Bitcoin is being labeled as a "libertarian" phenomenon. For some reason it reminds me of the original grassroots "tea party" gaining momentum and then being co-opted by the Neocons.

I was never a "tea party" member but I recall after it was taken over by the likes of Sarah Palin it was still being associated with true libertarianism and eventually anarcho-capitalism. More-so the former than the latter but problematic nonetheless.

As you put so eloquently Bitcoin is not money, let alone libertarian money ( I just hope this conflation ceases and we can get back to moving towards commodity based money.

I've heard some libertarians say "no matter what is said about bitcoin, one bitcoin is still worth $500 of your paper dollars." Oddly enough the same thing can be said about iPads. Should the iPad become a currency? After all "say what you want about the iPad but one iPad is still worth $500 of your paper dollars!"

I realize that is an exaggeration and I've read Rothbard enough to know what defines currency, money, and a medium of exchange. However, that line of thought in the previous paragraph isn't far-fetched.


  1. The bottom line is that bitcoins are still backed by the same thing paper currency is. Nothing. Bitcoin is just another fiat currency. Period.

    1. That's such a silly argument. For starters, the dollar is IMPOSED at the point of a gun. No one is imposing the use of bitcoins. "Fiat" means "by decree." Only state issued currencies can be fiat currencies, because only state issued currencies are imposed at the point of a gun.

      The use of bitcoin is completely voluntary, which automatically sets it miles apart from any state issued currency. The value of bitcoin is determined freely by open market processes, just as it is with gold, or any other commodity.

      Bitcoin is scarce (more scare than gold), highly divisible (more divisible than gold), fungible (like gold), recognizable (like gold), counterfeit proof (better than gold), easily transportable (more so than gold) and easily securable (more so than gold).

      See this short lecture by Block on what makes a good money:

      Bitcoin can be sent over a transmission wire, unlike gold. Bitcoin is a superior medium of exchange in virtually ever aspect when compared to gold. Gold is useless as a medium of exchange in world of digital commerce.

    2. The dollar is not imposed at the point of a gun. How can you voluntarily use Bitcoins if govt is pointing a gun at you and forcing you to use dollars? You're not even coming close to making sense.

      Bitcoin is not scarce. The price is falling which means Bitcoin is in surplus.

      You are correct that Gold is useless as a medium of exchange in digital commerce. Which means gold is not a safe haven unless you believe internet commerce will cease to exist when the hyperinflation and dollar collapse takes place (which will happen "imminently" as in sometime before Zombie Jesus returns to Earth to slay the enemies of Israel).

    3. And Bitcoin is anonymous like...


      ...OK, Bitcoin is completely traceable, but it's still better than gold!!!

    4. Bitcoin is not fiat-
      the US dollar is fiat-backed by the full faith and credit, law and power of the US and nothing else.
      Biticoin is a thin air currency not backed by anything other than the faith and delusion that its worth something egged on by the original holders to make them believe and convince others that it has value. IT's the protocol! IT's the encryption! IT's worthless