of exchange (all the other traits are derivatives) Store of value Standard of deferred payments Exchange: direct and indirect Direct exchange is clumsy. Good for short, nasty and brutish life. The double need coincidence problem The time coincidence problem The divisibility problem Hence: indirect exchange and the difference primitive mediums of exchange Money as the winning medium of exchange: from diversity, through competition, to the best fitted commodities for the job {Big rocks, Tobacco, sugar, salt, cows, sheep, nails, grains, pearls, tea, skins, fishing hooks, copper, silver, gold} That chart is okayish, but has flaws !
scarce, divisible, durable, transportable (of right value range per weight), verifiable / difficult to counterfeit, easy to store, fungible / standardized, beautiful Economic calculation: the daily miracle of money – it makes possible the bidding of everything all the time Why a miracle: because it is not clear that this function was envisioned upon adoption. Yet, it is essential. “the practical man, eager to improve human conditions by removing uneasiness as far as possible, must know whether, under given conditions, what he is planning is the best method, or even a method, to make people less uneasy…. Thus money becomes the vehicle of economic calculation. This is not a separate function of money. Money is the universally used medium of exchange, nothing else.” (Mises, Human Action, pp. 209-210) Money emerged on the market, not created by authority Money can only be a commodity: scarce and valuable; regression theorem Excursus: market value derived from subjective values Value is not objective There is no inherent value
Winner takes almost all Why not all? Redundancy as insurance. Why do we have two eyes, etc? Taleb Altcoins? Tough luck. Maybe for other uses, not money. But then calling them coins is inappropriate. Bitcoin is “deflationary”. GOOD! Any quantity of money is optimal More about this later.
a wedding gift, to secure political allies or in exchange for food from residents of nearby islands after a severe storm. These deals also occurred in front of the whole community. No matter who acquired a rai, it stayed in its original location. Bitcoin and blockchain work in much the same way, Fitzpatrick says… A comparison of stone money on Yap to blockchain technology “is legitimate,” says anthropological archaeologist Kathryn Sampeck of Illinois State University in Normal. Yap islanders pioneered a public, oral system for securely tracking and exchanging rai. Blockchain does the same by maintaining digital histories and updates about units of cryptocurrency. Others disagree. Researchers such as anthropologist David Graeber of the London School of Economics and Political Science, who view money as the product of government taxation and debt, don’t think Yap disks qualify as currency. For instance, rai can’t be divided into smaller parts to make purchases or easily carried from place to place. Digital currencies don’t live up to their name either, the same group argues. Bitcoin and its cousins are unregulated exchange units with wildly fluctuating values. That makes these digital creations unlikely to catch on among consumers and tax collectors, critics predict.
by debasement, later by printing ! 2. The banker: Fractional reserves as fraudulent banking – Instability of FRB Dynamic solution: centralization barbarous relic in the vault monopoly of paper money production banking cartel orchestrated by the central bank prohibition of alternatives, competition The central bank as lender of last resort and source of emergency finance for the treasury (permanent emergency)
certatin purpose Official purpose: sanity or safety Unofficial / de facto purpose: redistribution of resources from the subjects of prohibition to the prohibiting authorities Boys will be boys (human nature): black markets Increased uncertainty leads to 1. more density and less diversity (since transportation and carry is a high risk and leads to high fixed costs) 2. less reliance on third parties: intermediation, certification, litigation 3. no branding, anonymity The black marketed good: more expensive, denser, higher amplitude in quality, less focus on marketing/merchandising details: more bang for the buck Alcohol prohibition: stronger beers than before, higher consumption of hard liquors – whiskey, vodka etc. Drugs prohibition: stronger marijuana, higher consumption of cocaine, heroin etc. Money prohibition: dense, denser, crypto In a word: black market money is hard (and harsh) money.
of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution. Digital signatures provide part of the solution, but the main benefits are lost if a trusted third party is still required to prevent double-spending. We propose a solution to the double-spending problem using a peer-to-peer network. The network timestamps transactions by hashing them into an ongoing chain of hash-based proof- of-work, forming a record that cannot be changed without redoing the proof-of- work. The longest chain not only serves as proof of the sequence of events witnessed, but proof that it came from the largest pool of CPU power. As long as a majority of CPU power is controlled by nodes that are not cooperating to attack the network, they'll generate the longest chain and outpace attackers. The network itself requires minimal structure. Messages are broadcast on a best effort basis, and nodes can leave and rejoin the network at will, accepting the longest proof-of-work chain as proof of what happened while they were gone. Satoshi Nakamoto https://bitcoin.org/bitcoin.pdf
trustful because users don’t have to rely on a lying cartel that has a disastrous track record of breaking contract and political promise. So, we have two realities: Official money: fiat inflationary paper manipulated to suck resources from the productive economy and cover the privileged in fantastic wealth Black market money: hard non-inflationary money, anonymous (not really), trustless Insurance against the continuation of present trends in the official monetary and banking cartels Gresham’s Law (bad money drives aut good money) vs Menger’s Law (good money drives aut bad money)
optimal. The flexibility is assured through purchasing power adaptability (more goods, lower prices) (Excursus: the war on deflation is like the war on drugs – interested, stupid, and harmful) Divisibility is the key In the case of commodity money there is a technical stop point (gold stripe banknotes – infinitesimal amounts of gold inserted in banknotes) In the case of electronic money divisibility is virtually endless Trustless: works great as black / gray market, but is it ideal on a free market?
technologies Blockchain is great as a black market money technology, BUT It would have a much tougher competition on a free market in money production Choice: Immaterial or material money? Girls will be girls: we live in a material world We will know bitcoin has won when we’ll see grandmas at the grocery store buying with satoshis
built on information asymmetry and reliance on third parties. The meta-problem of the blockchain is litigation. That cannot be put on a blockchain: human nature would never work with justice administered by AI The problem of verstehen / understanding: choosing what information is relevant in the context and what not. Meaning cannot be automated. Payment technologies can be deployed over any kind of money, be it fiat, commodity, immaterial. Blockchain as a payment technology: why would we need a slow database? Antonopoulos
titles: Rothbard: ❖ Pentru o nouă libertate. Manifestul libertarian ❖ Logica acţiunii. Controverse economice ❖ Ce le-a făcut statul banilor noștri, ed. II ❖ Etica libertăţii Hazlitt: ❖ Eșecul noii economii
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