Matt O’Brien at WaPo has a pretty decent primer and takedown of Bitcoin.
Best lines:
Whatever it is, though, it isn't a currency. It's a tech stock. Each Bitcoin is really a share in a system that seems to make it cheaper to transfer things online—money, stocks, bonds, even the deed to your house—by cutting out the middleman. Well, kind of. Bitcoin doesn't remove the middleman so much as replace him with middlemen who don't make you pay much, but make society as a whole do so instead. Is this progress?...
Bitcoin is good for something other than redistributing wealth from one libertarian to another. That's transferring money, or anything else for that matter, online.
-RW
Of course, Bitcoin is NO currency and has absolutely NO store of value of its own, except what the market is willing to, for now, exchange for it. Bitcoin suffers the same deficiencies as does our fiat money dollar, including simply being created out of thin air. Except in this case, computer code. The 'dollar' is propped up by this nebulous State sanction of 'good for payment of all debts' and, of course, State monopoly of its creation with no competing currencies allowed; horror of which should any 'hard' currency based on gold or silver, for example, be allowed to 'freely' circulate....which, of course, is anathema to the further existence of the State as we know it and its continuation of accumulation of power, corruption, and.....wars. And also the dollar maintains its hegemony also by the endless theft by the State of its productive 'tax cows'. Currency was never to be the creation or monopoly of the State......and certainly was the determination of our country's founders....except, of course, the Federalists which includes that schmuck Alexander Hamilton. I have no more faith in Bitcoin as I do the dollar but am a total backer of anything truly free market and without State regulation and so wish Bitcoin well, but it will never be left alone by the State to function as intended or promoted. Bitcoin quantity is also not constrained by any physical or natural scarcity but only by computer programming and no assurances to the contrary should be taken as a given. I for one, take no more security in thinking my savings are safe holding a crypto currency and never be able to take actual physical possession of, and worse, may be simply gone overnight in some internet or computer glitch or my being in some physical location where I have no cyber access to it, or where the never ending threat of the State has simply shut down the access to.
ReplyDeleteRW, it may be your cue to take a second and third hard look at your position when you find yourself resorting to citing the economic insights of a committed Keynesian for support. Matt O’Brian is former Atlantic commentator who unequivocally lobbies for fiat money manipulated by government in this interview with Peter Schiff: https://mises.ca/posts/blog/peter-schiff-and-matthew-obrien/ Is this a person qualified to assess the merit of an Austrian, sateless, non-manipulable money?
ReplyDeleteThe bases upon which Matt O’Brian’s anti-bitcoin rhetoric rests are classic liberal failures to fundamentally understand economic principles. For example, this eco-warrior classic he offers us: “The problem is the price you pay for energy doesn't include the cost we all pay for pollution.” And this gem of a claim that a non-inflatable money can’t qualify as money: “…they don't spend their own Bitcoins because they think the price will go to infinity and beyond once everybody else uses them. And so nobody uses them,” which of course is equally applicable to gold.
Fortunately O’Brian offers us a solution to the chaos of anarchy, “…the only solution has been to have a trusted third-party, like a bank, sit in between us.” Ah yes, and by the same logic money exchanges between banks must also require a trusted third-party, and let me guess, this justifies the need for a centralized federal reserve backed by government.
He’s so clueless, he’s unaware he guts and tosses out the window his own thesis and entire body of argumentation when he concludes, “Each Bitcoin is really a share in a system that seems to make it cheaper to transfer things online.” THAT’S WHAT MONEY IS. That’s what it does. That’s why money has value at all. It makes things cheaper to exchange.
That’s why humans elect to use an otherwise unremarkable metal called gold, rocks dubbed “precious gems” that have no practical use, wampum, or any other consensus-agreed-upon tokens. It’s solely about enabling low-friction trade rather than resorting to barter which incurs massive transaction costs.
RW, if offering up argumentation you endorse rather than ridicule, please make sure it includes sound economic arguments, not this Keynesian tripe.