4 ms·

Has anyone yet been able to articulate a defense for BTC against von Mise's "regression theorem" for the origin of money? or show that von Mises was wrong? "thi

Has anyone yet been able to articulate a defense for BTC against von Mise's "regression theorem" for the origin of money? or show that von Mises was wrong? "this time it's different" is not good enough.

kinghajj 13y ago
Here's an interesting paper on this subject that I found via reddit a few days ago. http://konradsgraf.com/blog1/2013/10/23/on-the-origins-of-bitcoin-my-new-work-on-bitcoin-and-monetar.html http://konradsgraf.com/blog1/2013/10/23/on-the-origins-of-bi...
- lingben 13y ago
  That paper makes a preposterous assertion. Here's the very simplest summary of it and its criticism: http://themisescircle.org/blog/2013/03/19/bitcoin-and-the-regression-theorem/ http://themisescircle.org/blog/2013/03/19/bitcoin-and-the-re...
  - MarcusBrutus 13y ago
    Spot on! I skimmed it very quickly and I also got the feeling that portraying "shiny metals" as something that, in the beginning, only "a few crazy ones" liked to possess (attempting to draw a parallel with BTC's origins) does not stand to scrutiny. Desire for shinny metals and, in general, beautiful objects (diamonds, pearls etc) is hard-coded deeply in the human psyche, is found in myths since the dawn of time and is part of our human nature and our ability to appreciate beauty and being drawn to it. It's preposterous to claim the same for random strings of bits.
  - deleted 13y ago
    [deleted]
mike_esspe 13y ago
Isn't emergence of bitcoin falsified regression theorem? From "Human Action": No good can be employed for the function of a medium of exchange which at the very beginning of its use for this purpose did not have exchange value on account of other employments. And all these statements implied in the regression theorem are enounced apodictically as implied in the apriorism of praxeology. It must happen this way. Nobody can ever succeed in construction a hypothetical case in which things were to occur in a different way. https://mises.org/humanaction/chap17sec4.asp https://mises.org/humanaction/chap17sec4.asp
- MarcusBrutus 13y ago
  The passage above should be clearly be understood as "No good can be employed _for the long run_ ...". Otherwise various local currencies that have risen and died over the years (e.g. "Ithaca hours") could also have been construed as counter-examples to the regression theorem.
  - deleted 13y ago
    [deleted]
- fragsworth 13y ago
  It sounds like there's nothing wrong here - Bitcoin is (since its beginning) exchanged for something else at market rate (e.g. dollars), so that a more convenient transfer can be made later, and then exchanged back into something else (e.g. dollars). At no point did it have "no exchange value on account of other employments". Right? It's the same way how physical money works. They were exchanged for goods (e.g. horses), so that a more convenient transfer can be made later, and then exchanged back into goods (e.g. horses). It is more convenient than our existing currencies, and you should be able to see our existing currencies as being similar to "goods" like horses.
  - MarcusBrutus 13y ago
    I beg to differ. I did have "no exchange value on account of other employments" at the time the very first BTC was mined, and I suspect quite a few months after that. The same cannot be said of paper money as from the moment of its inception and for many long years thereafter it was redeemable in gold, thus satisfying the regression theorem. Even today a tenuous link is still maintained as the gold reserves of every central bank factor, to a limited extend, in the assessment of a currency's health.
    - walden42 13y ago
      > The same cannot be said of paper money as from the moment of its inception and for many long years thereafter it was redeemable in gold But since the dollars themselves had no inherent value, its value was derived simply from the cumulative belief that they could be redeemable by gold. I could even say that when the dollar was first created, the rest of the world was wary of it since it was so new. I don't see how bitcoin is much different, except for the fact that a large organization (e.g. government) didn't state that it had value when it was first created, which is actually one of the strong points of bitcoin (a currency by the people for the people.)
lingben 13y ago
No. At least, not one that has persuaded the majority. http://themisescircle.org/blog/2013/03/19/bitcoin-and-the-regression-theorem/ http://themisescircle.org/blog/2013/03/19/bitcoin-and-the-re...
Frozenlock 13y ago
Mises wasn't wrong... The 'thing' that becomes money doesn't have to have a real world use. It must be desired by some people. People can desire bitcoins expecting it to become a widely used currency. Yes, it's circular, but there's nothing preventing a self-fulfilling prophecy from being compatible with the regression theorem. Now, if you absolutely need to have some kind of basic usage to feel better, know that to use the Bitcoin blockchain, you must pay a fee in bitcoins. A bitcoin enables you to use the blockchain, the world's most secure distributed financial database.

kinghajj 13y ago

Here's an interesting paper on this subject that I found via reddit a few days ago. http://konradsgraf.com/blog1/2013/10/23/on-the-origins-of-bitcoin-my-new-work-on-bitcoin-and-monetar.html http://konradsgraf.com/blog1/2013/10/23/on-the-origins-of-bi...

lingben 13y ago
That paper makes a preposterous assertion. Here's the very simplest summary of it and its criticism: http://themisescircle.org/blog/2013/03/19/bitcoin-and-the-regression-theorem/ http://themisescircle.org/blog/2013/03/19/bitcoin-and-the-re...
- MarcusBrutus 13y ago
  Spot on! I skimmed it very quickly and I also got the feeling that portraying "shiny metals" as something that, in the beginning, only "a few crazy ones" liked to possess (attempting to draw a parallel with BTC's origins) does not stand to scrutiny. Desire for shinny metals and, in general, beautiful objects (diamonds, pearls etc) is hard-coded deeply in the human psyche, is found in myths since the dawn of time and is part of our human nature and our ability to appreciate beauty and being drawn to it. It's preposterous to claim the same for random strings of bits.
- deleted 13y ago
  [deleted]

mike_esspe 13y ago

Isn't emergence of bitcoin falsified regression theorem? From "Human Action": No good can be employed for the function of a medium of exchange which at the very beginning of its use for this purpose did not have exchange value on account of other employments. And all these statements implied in the regression theorem are enounced apodictically as implied in the apriorism of praxeology. It must happen this way. Nobody can ever succeed in construction a hypothetical case in which things were to occur in a different way. https://mises.org/humanaction/chap17sec4.asp https://mises.org/humanaction/chap17sec4.asp

MarcusBrutus 13y ago
The passage above should be clearly be understood as "No good can be employed _for the long run_ ...". Otherwise various local currencies that have risen and died over the years (e.g. "Ithaca hours") could also have been construed as counter-examples to the regression theorem.
- deleted 13y ago
  [deleted]
fragsworth 13y ago
It sounds like there's nothing wrong here - Bitcoin is (since its beginning) exchanged for something else at market rate (e.g. dollars), so that a more convenient transfer can be made later, and then exchanged back into something else (e.g. dollars). At no point did it have "no exchange value on account of other employments". Right? It's the same way how physical money works. They were exchanged for goods (e.g. horses), so that a more convenient transfer can be made later, and then exchanged back into goods (e.g. horses). It is more convenient than our existing currencies, and you should be able to see our existing currencies as being similar to "goods" like horses.
- MarcusBrutus 13y ago
  I beg to differ. I did have "no exchange value on account of other employments" at the time the very first BTC was mined, and I suspect quite a few months after that. The same cannot be said of paper money as from the moment of its inception and for many long years thereafter it was redeemable in gold, thus satisfying the regression theorem. Even today a tenuous link is still maintained as the gold reserves of every central bank factor, to a limited extend, in the assessment of a currency's health.
  - walden42 13y ago
    > The same cannot be said of paper money as from the moment of its inception and for many long years thereafter it was redeemable in gold But since the dollars themselves had no inherent value, its value was derived simply from the cumulative belief that they could be redeemable by gold. I could even say that when the dollar was first created, the rest of the world was wary of it since it was so new. I don't see how bitcoin is much different, except for the fact that a large organization (e.g. government) didn't state that it had value when it was first created, which is actually one of the strong points of bitcoin (a currency by the people for the people.)

lingben 13y ago

No. At least, not one that has persuaded the majority. http://themisescircle.org/blog/2013/03/19/bitcoin-and-the-regression-theorem/ http://themisescircle.org/blog/2013/03/19/bitcoin-and-the-re...

Frozenlock 13y ago

Mises wasn't wrong... The 'thing' that becomes money doesn't have to have a real world use. It must be desired by some people. People can desire bitcoins expecting it to become a widely used currency. Yes, it's circular, but there's nothing preventing a self-fulfilling prophecy from being compatible with the regression theorem. Now, if you absolutely need to have some kind of basic usage to feel better, know that to use the Bitcoin blockchain, you must pay a fee in bitcoins. A bitcoin enables you to use the blockchain, the world's most secure distributed financial database.