http://www.technologyreview.com/view/522111/how-to-burst-the-filter-bubble-that-protects-us-from-opposing-views/?utm_campaign=socialsync&utm_medium=social-post&utm_source=facebookI DON”T WANT THE BUBBLE BURST. THAT JUST MEANS MORE INDOCTRINATION.
Source date (UTC): 2013-12-02 04:55:00 UTC
http://markmanson.net/stop-trying-to-be-happy(sentimental but true)
Source date (UTC): 2013-12-02 04:52:00 UTC
http://rt.com/news/iceland-debt-relief-measure-535/I SAID THE SAME THING. SO DID GALBRAITH BEFORE HE DIED.
In the US case, 200K per mortgage, would have kept the world pricing system intact. As it was, the entire world had to reorganize production to adjust to new signals. And as far as I can tell, for no good reason. Instead of buying down homeowner debt with federal debt and forcing lenders to take drastic penalties. We destroyed the wealth of generations, and impoverished them.
My estimate was 2-4T. And that was CHEAP by comparison.
Source date (UTC): 2013-12-02 04:50:00 UTC
Government Chemist Tampered With 40,000 Cases, Locking Countless Innocent Americans in Prison
Source date (UTC): 2013-12-02 03:18:00 UTC
http://www.propertarianism.com/2013/12/02/disagreement-a-response-to-gary-norths-criticism-of-bitcoin/(repost)(edited and expanded)
Source date (UTC): 2013-12-02 02:56:00 UTC
http://www.garynorth.com/public/11828.cfmDISAGREEMENT: A RESPONSE TO GARY NORTH’S POSITION ON BITCOINS
(I’ll leave it to the reader to suggest which one of us makes a better argument.)
I agree bit-coins aren’t money (a commodity). Nor are they are fiduciary media (redeemable). But they do qualify as a money substitute as either token money, or shares of a stock that is highly liquid (non-redeemable tokens).
1) GREY MARKET TOKEN MONEY
The very worst I can see, is that Bitcoins or some equivalent will evolve into a grey market money for grey market goods. This has already begun to occur.
2) LOW TRUST TRANSACTION MONEY
Their value is lower costs and protecting your credit card information. It lowers the consumer’s perception of risk.
Bitcoins eliminate the problem of recurring charges from online transactions and subscriptions.
3) LOW FEE HIGH RISK TRANSACTION MONEY
As soon as someone creates an escrow service for more expensive grey market transactions, that will succeed.
As such it is an exceptional currency for elites.
4) A MONEY SUBSTITUTE FOR LOW CONSUMER VALUE TO MONEY BROKERS
Bitcoins eliminate the problem of needing a ‘bank’ that can identify you by abstract means. In other words, it is an exceptional currency for the margins of society, just as credit cards are an exceptional currency for the upper quintiles, debit cards for the lower middle, and cash is for the lowest.
BUSINESS MODELS
I have proposed a number of business models where the transaction costs are low, but lower transaction costs are meaningful (retail). The grey market.
I think it is unwise to be fooled by the environmental legitimacy of the enduring credit system that is used to manage human beings.
So at this point I think I might take the issue up with North directly. Because while I agree with his position on MMT as permanently inflationary, I think he is confused by the term ‘money’ when it comes to Bitcoin, and while he is CORRECT that the price of Bitcoins are speculative for INVESTORS in Bitcoins, he is incorrect that the price of Bitcoins are intolerable for CONSUMERS of Bitcoins when they are used as a means of clearance.
Once Bitcoins have burst a few times, the speculation will drop as it has with other speculative commodities, and because of low volume, volatility should continue. But holding Bitcoins for ten minutes while you make a purchase on your credit card, then use the Bitcoins for an online purchase is not going to impede the transactions. My self, I’d love to see a credit card service for doing just that, instantaneously charging my card, transferring the funds to someone else via bitcoins, or at least just resolving exchange between parties via bitcoins.
THEY ARE’T MONEY – BUT THEN LITTLE *IS*
Bitcoins are NOT MONEY. They are speculative shares of stock in a custom stock exchange, whose advocates seek those shares to be universally owned, and therefore usable as a money substitute.
Fact is we don’t know if it can work or not because this particular attempt at creating a money substitute has not been tried as a pre-purchase good, and similar efforts have been previously limited to evolutions on the wire transfer system – which is high cost and omnidirectional. I am arguing that like pornography built the Internet, the grey market will build Bitcoin or some equivalent.
And I think that it is very hard to argue against those facts simply because one is confused by the marketing use of the term ‘money’, and failing to see this particular media as non-redeemable token-money, or highly commoditized shares of stock.
CLASS OF MONEY SERVES DIFFERENT CLASSES OF SOCIETY
Something I found very obvious when we built software for check cashing services. Classes serve each other. They use the same money. But in different forms. With different transaction costs. Cash has a VERY HIGH transaction cost to the lower classes. It is easily stolen. It is nearly impossible to secure. And I suggested, for example, a payroll service in Bitcoin that would bypass the check cashing services, and therefore the need for the lower classes to have bank accounts. This eliminates the need for low income areas serving low income people, cash that can be stolen in robberies. It eliminates bank fees on checks, debit cards. It eliminates clearing times on funds.
In fact, on a moral basis, I’d push Bitcoins as a public service for the poor on that basis alone. Where the WEAKNESS of Bitcoin as a non-redeemable good is a benefit precisely because it is NOT redeemable: it helps transform cash into abstract property that cannot be easily stolen, as we have transformed MOST assets into abstract property that cannot be stolen, and which is one of the reasons for the decline in crime: you can’t steal what’s hard to steal.
ON THESE BASIS ALONE
I do not see Bitcoin fulfilling the libertarian fantasy of an alternative to fiat currency or hard currency at any particular point in the future. However, the low transaction costs of these goods for markets currently NOT served by the banking system, (or tolerated by regulation) is, as we have seen with online pornography and drug purchases, sufficient to drive demand for this product.
But iff and only iff the user interface problem can be sufficiently solved to serve as I’ve stated above.
CONTRA AUSTRIANISM
I do not let my consensus with the Austrian trade cycle, and the Austrian recognition of opportunity costs, or my distaste for (hatred of) the immoral socialist, totalitarian state, interfere with my analytical reasoning.
We should not defend the ‘brand’ money, by reducing it to as an ideological term subject to sanctity and reverence. And we should not fail to understand the multitude of uses for the multitudes of mediums of exchange.
If you want to argue that Bitcoins are not money. That’s well and good. Because as a store of value they are as weak as a fiduciary media, without the benefit of being redeemable. They are in a speculative phase right now like any stock that is issued and has low volume. They are likely to crash.
So if you are an investor in Bitcoin, then you may or may not succeed. I’m betting that people are not buying low and selling at the highs on the way up and taking advantage of the lack of transaction costs. We can’t do that with stocks because of high transaction costs. We can manipulate Bitcoin prices more easily for this reason. But investors will be ruined in waves, and that’s fine.
That has no bearing on the short term use of BTC. It only has bearing on its use as a store of value over longer periods of volatility. And even that volatility will be eliminated by more extensive use.
The grey market is sufficient incentive for BTC success.
Source date (UTC): 2013-12-02 02:41:00 UTC
1/5-1/4 OF MEN LEAVE NO DESCENDANTS
“The proportion of men having no children hit a noticeable low during the good times of the post-War boom. Since then, the pattern has returned to something very similar to what it was before the boom; that is, a fifth to a quarter of men leaving no descendants.” – JAYMAN
Source date (UTC): 2013-12-02 00:17:00 UTC
http://www.theatlanticcities.com/neighborhoods/2013/11/paradox-diverse-communities/7614/YES, DIVERSITY IS A BAD THING. I KNOW. WE ALL KNOW NOW. PUTNAM IS RIGHT.
But I can’t tell what happens under monarchy, where there isn’t any access to political power, and everyone has to compete in the market rather than rent seek via politics.
As far as I can tell, diversity of neighborhoods might not be problematic if there isn’t any ability to influence the state.
Source date (UTC): 2013-12-01 23:31:00 UTC
MACRO ECON AND DANCING WITH THE DEVIL
Most modern economics involves mastery of the arcane mechanisms by which fiat money is administered via the banking systems. This is a little bit like studying crime. It teaches you a lot about crime. But it doesn’t teach you much about how to make an honest buck.
But then. There is nothing honest about either the state or politics.
I understand money just fine thanks. I don’t care to become a master of criminal enterprise. Understanding money is moral. Understanding organized crime is not.
If you dance with the devil, the devil doesn’t change. The devil changes you.
Source date (UTC): 2013-12-01 23:22:00 UTC
DEFINING BITCOIN AS A MONEY SUBSTITUTE
(edited)(cross posted)
I’ve worked on this a bit. And, unfortunately, Bitcoin does not fit within the Misesian definition of money. It does fit within the definition of a money substitute. But it’s hard to articulate because of a weakness in the Misesian definition’s grammar.
The problem in defining Bitcoins under Misesian categories is that Bitcoins are not a claim against any deposit, yet they retain the fragility of a claim against a deposit, in that they are dependent upon the Bitcoin network and cannot be accepted without it.
So, Bitcoins, unlike commodity money, do not degrade gracefully into a commodity. Damage to the Bitcoin network is the same as damage to the reserve of a 100% reserve bank. Collapse of the network is the same as collapse of a 100% reserve bank.
It is more accurate to say that Bitcoins are shares in a corporation whose assets are leased servers used to mine and prove work, and the internet as communications If the Bitcoin corporation ceases to operate, then Bitcoins have no value. If the corporation continues to operate, then they have value.
So, like stocks, they are a medium of exchange dependent upon a network for the redemption of those exchanges. BItcoins store value as stocks, not as commodities, not as notes, for this reason.
Others have argued that bitcoins function largely as a clearing house independent of the state. But this is to describe effects, not causes. It doesn’t answer any questions about the durability of bitcoins as a store of value – which is the value of money.
So, in Misesian terms, bitcoins are a non-redeemable money substitute. They are, quite literally, a stock in a voluntary corporation with an open shareholder agreement, that if demand persists, can be used as a money substitute.
The reason for confusion is this two-stage process of monetization. Bitcoins are speculative shares, that if universally accepted as a medium of exchange, can function as a money substitute, by virtue of a low cost, low friction, means of clearance, that requires no human intervention and no reserve.
As a stock, I am not sure yet, whether Bitcoins are the equivalent of an Apple or Facebook stock, or a junk bond. I think they are more likely like buying shares in a non-dividend paying utility. And that current speculation is driving up the price of that stock.
What I am fairly sure of, is that if the illusion that credit money and fiat money can function as a money substitute, that Bitcoins, can also Function as a money substitute. However, I think Bitcoins are more fragile than blue chip stocks and more fragile than fiat money. This fragility will cease if the model becomes popular enough in that the network effect of Bitcoins (or some heir) is sufficient incentive for the miners and proof-of-workers to stay interested.
If the SWIFT network analogy can be reduced to commodity transactions by consumers, then I think that as an institution Bitcoin is very hard to criticize. Certainly no harder than the visa/mastercard networks.
At this point that is the best analysis that I can put forward.
(EDIT)
The logic says that the closest analogy for Bitcoin, is a stock that is highly liquid, and can function as a money substitute, cleared without conversion dependent upon a third party inventory, and insulated from regulatory capture and regulatory inflation.
(EDIT)
I’ll stick with the stock analogy in that the stock is valuable as long as the fundamentals tell me it is. Otherwise I can’t deduce much else without struggling to determine how much my cognitive biases are influencing my assessment. That would be… unscientific. So to speak.
I will say instead, that I wold like to see some form of insurance on the persistence of the bitcoin network once the mining windfall (ponzi criticism) is passed. But without that I can find no logical criticism for NOT using bitcoins. I mean, the SWIFT alliance does exactly the same thing but with privately owned hardware. There is really no reason that the bitcoin network could not be privatized the same way as SWIFT. In that sense, the value of bitcoins will be determined by the number of commercial enterprises that accept it. And there is a high incentive for commercial enterprises to accept it if the fee for participation is a fraction of one percent. Which is what I expect it will be.
In that sense it expands the credit and debit card system. And those systems persist because of the transaction value they provide (lack of necessity to carry cash).
(EDIT)
For those lacking in philosophical rigor, there is a vast difference between correspondence with reality and analogistic means of thinking. If you cannot reduce something to human action corresponding to reality then you do not understand it. Unfortunately, most philosophical discourse, because of its religious heritage, is conducted in this nonsensical mode.
Source date (UTC): 2013-12-01 21:31:00 UTC