2013-12-10 Tim Harford / Financial Times - Of Bitcoins, Bubbles and B&Q Vouchers

[kiko]

http://timharford.com/2013/12/of-bitcoins-bubbles-and-bq-vouchers/

Published in the FT a few days ago.
http://www.ft.com/cms/s/0/490585d8-5d07-11e3-81bd-00144feabdc0.html?siteedition=uk#axzz2mjHA3GpZ

Wilfully ignores the medium-of-exchange/unit-of-account distinction. Tim knows better than this.

[Shermo]

He's hit the nail on the head, what really sucks about Bitcoins is the fact that if you save them they become worth more, unlike the £££ in my bank account that loses value at a rate of about 5% per year. 

[marcus_of_augustus]

yet another economist who seems to be struggling with lack of oxygen to the brain when venturing into the rarefied air of monetary science ... we need an emergency field ward for these guys, there are so many of them wandering around spouting all kind of random nonsense and falling off cliffs of ignorance it is just embarrassing and frightening to watch the economic community's societal meltdown when confronted with their own Piltdown man moment (keynesian, monopolistic money supply dogma), must be destablising realising your whole worldview is an elaborate hoax

[TraderTimm]

This is why I'd like the Swiss "postulate" to become an official endorsement. With Bitcoin endorsed by a sovereign entity as a "unit of account", a lot of the other crap will fall away. Tired of the whole "lack of intrinsic value" and "doesn't satisfy Mises regression theorem" bullshit.

[odolvlobo]

This is why I'd like the Swiss "postulate" to become an official endorsement. With Bitcoin endorsed by a sovereign entity as a "unit of account", a lot of the other crap will fall away. Tired of the whole "lack of intrinsic value" and "doesn't satisfy Mises regression theorem" bullshit.

When critics don't have reasoned arguments, they resort to hyperbole. That is the case here.

[nanobrain]

yet another economist who seems to be struggling with lack of oxygen to the brain when venturing into the rarefied air of monetary science ... we need an emergency field ward for these guys, there are so many of them wandering around spouting all kind of random nonsense and falling off cliffs of ignorance it is just embarrassing and frightening to watch the economic community's societal meltdown when confronted with their own Piltdown man moment (keynesian, monopolistic money supply dogma), must be destablising realising your whole worldview is an elaborate hoax

That's a very witty retort (although perhaps some punctuation would help) and made me smile...but it doesn't actually rebut the argument of the writer.  This isn't a 'troll' but a genuine concern: I find this forum to more and more resemble a cult where criticism is neither challenged or debated but simply engulfed in ad hominem attacks, which actually adds weight to the critics' arguments.

Perhaps someone more informed than myself could explain, for example ,why the fact BTC doesn't satisfy Mises regression theorum is bullshit; just saying something is bullshit is a feeble argument.

Thanks,
Nan

[marcus_of_augustus]

yet another economist who seems to be struggling with lack of oxygen to the brain when venturing into the rarefied air of monetary science ... we need an emergency field ward for these guys, there are so many of them wandering around spouting all kind of random nonsense and falling off cliffs of ignorance it is just embarrassing and frightening to watch the economic community's societal meltdown when confronted with their own Piltdown man moment (keynesian, monopolistic money supply dogma), must be destablising realising your whole worldview is an elaborate hoax

That's a very witty retort (although perhaps some punctuation would help) and made me smile...but it doesn't actually rebut the argument of the writer.  This isn't a 'troll' but a genuine concern: I find this forum to more and more resemble a cult where criticism is neither challenged or debated but simply engulfed in ad hominem attacks, which actually adds weight to the critics' arguments.

Perhaps someone more informed than myself could explain, for example ,why the fact BTC doesn't satisfy Mises regression theorum is bullshit; just saying something is bullshit is a feeble argument.

Thanks,
Nan

Well, we've been over all this a long time ago and all these matters have been settled and soundly rebutted ... the only thing left now is, hurried, badly punctuated, opprobrium for those who chose not to educate themselves but instead spend column space on bereft arguments and poorly written prose. I would say read the archives, but that is probably just more waste of advice.

Good luck.

Edit: also bitcoin was only needed to be traded for pizza once to satisfy the regression theorem right? Theoretical arguments are theoretical after all, practical examples are what set the rules in all sciences, i.e. begin here=> bitcoin works ... be careful to keep the horse in front of the cart.

[solex]

He's hit the nail on the head, what really sucks about Bitcoins is the fact that if you save them they become worth more, unlike the £££ in my bank account that loses value at a rate of about 5% per year.  

Yes, exactly. To all the idiot newsies who complain that the bitcoin value isn't stable: consider what is better than stable?  Something that appreciates over time, giving more purchasing power!

These people are so brainwashed by 100 years of Central Bank double-think that "inflation is good", need to learn that Bitcoin is a reality check. Their faces are being slapped but they are still under the CB spell.

[nanobrain]

yet another economist who seems to be struggling with lack of oxygen to the brain when venturing into the rarefied air of monetary science ... we need an emergency field ward for these guys, there are so many of them wandering around spouting all kind of random nonsense and falling off cliffs of ignorance it is just embarrassing and frightening to watch the economic community's societal meltdown when confronted with their own Piltdown man moment (keynesian, monopolistic money supply dogma), must be destablising realising your whole worldview is an elaborate hoax

That's a very witty retort (although perhaps some punctuation would help) and made me smile...but it doesn't actually rebut the argument of the writer.  This isn't a 'troll' but a genuine concern: I find this forum to more and more resemble a cult where criticism is neither challenged or debated but simply engulfed in ad hominem attacks, which actually adds weight to the critics' arguments.

Perhaps someone more informed than myself could explain, for example ,why the fact BTC doesn't satisfy Mises regression theorum is bullshit; just saying something is bullshit is a feeble argument.

Thanks,
Nan

Well, we've been over all this a long time ago and all these matters have been settled and soundly rebutted ... the only thing left now is, hurried, badly punctuated, opprobrium for those who chose not to educate themselves but instead spend column space on bereft arguments and poorly written prose. I would say read the archives, but that is probably just more waste of advice.

Good luck.

Edit: also bitcoin was only needed to be traded for pizza once to satisfy the regression theorem right? Theoretical arguments are theoretical after all, practical examples are what set the rules in all sciences, i.e. begin here=> bitcoin works ... be careful to keep the horse in front of the cart.

I'm not sure to say thanks for the reply or not

I've actually followed BTC since late 2011 and I read a lot of the old threads back then...many of them I won't pretend to have understood...I never posted on my old account because to be honest, it wasn't a discussion to which I could contribute.

Even then I would have liked to have hoped that BTC would make the world a better place but as someone who lived through the internet revolution and then watched it become a vast marketing/surveillance network, I'm not sure this will happen.  It certainly won't if people like yourself, long-term BTCoiners who are intelligent and well-versed in the arguments, decide to withdraw.  I'm not a mathematician just a social scientist and the only thing that I can say with any certainty is that technological revolutions are not driven by technology but by the people using it.  And the BTC battle for 'hearts and minds' is still being waged.

So, back to my original point: is it not better to rebut these sorts of features than simply slander the authors: why not write an exhaustive rebuttal and simply paste in to every negative argument thread?  I'll happily edit it if you want.

Also, as you point out these 'arguments' were had some time before; but since then what has changed economically, technologically and socially...nothing can operate solely within a theoretical model and must therefore also be subject to changing variables.  So, how have these theoretical models held up in the 'field'.

[User705]

This is why I'd like the Swiss "postulate" to become an official endorsement. With Bitcoin endorsed by a sovereign entity as a "unit of account", a lot of the other crap will fall away. Tired of the whole "lack of intrinsic value" and "doesn't satisfy Mises regression theorem" bullshit.

Germany already did it.

[Carlton Banks]

So, back to my original point: is it not better to rebut these sorts of features than simply slander the authors: why not write an exhaustive rebuttal and simply paste in to every negative argument thread?  I'll happily edit it if you want.

Also, as you point out these 'arguments' were had some time before; but since then what has changed economically, technologically and socially...nothing can operate solely within a theoretical model and must therefore also be subject to changing variables.  So, how have these theoretical models held up in the 'field'.

Ok. The expert naysayers tend to come up with all sorts of textbook reasoning as to why cryptocurrency it's no good as money, but history shows us that money systems are broadly divided into two basic types: a system that a community chooses, and a system they are forced to use. We're of the choosing persuasion. History also shows us that irrespective of the overall monetary properties of a chosen exchange medium, a sudden change in choice of monetary system, whether the choice is made by community consensus or by local rulers, is usually a reaction to the overall political context. Again, we're reacting pragmatically to prevailing conditions.

So all these arguments about monetary theory are all very interesting, but to concentrate on that part of the debate is ignorant of the fact that perfection is not necessarily what we're looking for anyway. We're looking for the most adept protest vote, and bitcoin satisfies that property irrefutably. Social sciency enough?

[kjj]

The other way to look at it is that bitcoin is (finally!) the experiment to see if deflationary currency is really bad or not.

In this context, trotting out the well polished argument from authority that "deflation is bad" is extra pointless.

[nanobrain]

So, back to my original point: is it not better to rebut these sorts of features than simply slander the authors: why not write an exhaustive rebuttal and simply paste in to every negative argument thread?  I'll happily edit it if you want.

Also, as you point out these 'arguments' were had some time before; but since then what has changed economically, technologically and socially...nothing can operate solely within a theoretical model and must therefore also be subject to changing variables.  So, how have these theoretical models held up in the 'field'.

Ok. The expert naysayers tend to come up with all sorts of textbook reasoning as to why cryptocurrency it's no good as money, but history shows us that money systems are broadly divided into two basic types: a system that a community chooses, and a system they are forced to use. We're of the choosing persuasion. History also shows us that irrespective of the overall monetary properties of a chosen exchange medium, a sudden change in choice of monetary system, whether the choice is made by community consensus or by local rulers, is usually a reaction to the overall political context. Again, we're reacting pragmatically to prevailing conditions.

So all these arguments about monetary theory are all very interesting, but to concentrate on that part of the debate is ignorant of the fact that perfection is not necessarily what we're looking for anyway. We're looking for the most adept protest vote, and bitcoin satisfies that property irrefutably. Social sciency enough?

Hi Carlton,
Thanks for your reply, which is very interesting. 

I am well aware of the context that saw Bitcoin's genesis in the GFC as part of a backlash against established financial systems. And Bitcoin as a 'protest vote' seems to be a very popular stance here although it seems less of a vehicle for revolution and more of a process of redistributing wealth to a different social cohort.   I'm not saying I don't support BTC or that it isn't worthwhile but I struggle to see how a change of currency is going to make the world a better place.

Without getting too 'social sciencey' there are three levels to understand the human condition: values (whihc dictate our), attitudes and (in term influence our) behaviours.  Behaviours are actually pretty easy to change externally, attitudes are more difficult to impact upon while are values (formed at an early age via both external and internal factors) are virtually impossible to change.  All BTC is going to do is change our behaviour....its not going to change people's attitudes in the slightest and it certainly won't impact on what value system, you, I, Marcus_of_Augustus or the guy down at the corner shop hold.

If you want to change the world then you are going to have to do it, one conversation at a time: hoping that a  computer protocol will do it for you? I don't think so.

[marcus_of_augustus]

So, back to my original point: is it not better to rebut these sorts of features than simply slander the authors: why not write an exhaustive rebuttal and simply paste in to every negative argument thread?  I'll happily edit it if you want.

Also, as you point out these 'arguments' were had some time before; but since then what has changed economically, technologically and socially...nothing can operate solely within a theoretical model and must therefore also be subject to changing variables.  So, how have these theoretical models held up in the 'field'.

Ok. The expert naysayers tend to come up with all sorts of textbook reasoning as to why cryptocurrency it's no good as money, but history shows us that money systems are broadly divided into two basic types: a system that a community chooses, and a system they are forced to use. We're of the choosing persuasion. History also shows us that irrespective of the overall monetary properties of a chosen exchange medium, a sudden change in choice of monetary system, whether the choice is made by community consensus or by local rulers, is usually a reaction to the overall political context. Again, we're reacting pragmatically to prevailing conditions.

So all these arguments about monetary theory are all very interesting, but to concentrate on that part of the debate is ignorant of the fact that perfection is not necessarily what we're looking for anyway. We're looking for the most adept protest vote, and bitcoin satisfies that property irrefutably. Social sciency enough?

Hi Carlton,
Thanks for your reply, which is very interesting. 

I am well aware of the context that saw Bitcoin's genesis in the GFC as part of a backlash against established financial systems. And Bitcoin as a 'protest vote' seems to be a very popular stance here although it seems less of a vehicle for revolution and more of a process of redistributing wealth to a different social cohort.   I'm not saying I don't support BTC or that it isn't worthwhile but I struggle to see how a change of currency is going to make the world a better place.

Without getting too 'social sciencey' there are three levels to understand the human condition: values (whihc dictate our), attitudes and (in term influence our) behaviours.  Behaviours are actually pretty easy to change externally, attitudes are more difficult to impact upon while are values (formed at an early age via both external and internal factors) are virtually impossible to change.  All BTC is going to do is change our behaviour....its not going to change people's attitudes in the slightest and it certainly won't impact on what value system, you, I, Marcus_of_Augustus or the guy down at the corner shop hold.

If you want to change the world then you are going to have to do it, one conversation at a time: hoping that a  computer protocol will do it for you? I don't think so.

See, I think what you have expressed here amply demonstrates that you do not understand money very well at all.

If you think that bad money, aka fiat ponzi scheme, has not changed people's attitudes over the last 100 years then you probably haven't looked close enough at the evidence and into detail at the problems we have right now in society. Read Hayek's "Denationalisation of Money" to begin with and keep digging back from there. Bad money issued by a nation state can and has led to totalitarian outcomes as the state strives to maintain it's monopoly in a revolting market, this will all happen regardless of values and attitudes, not because of them.

So when you are ready to accept how corrupting and detrimental bad money can be on society, you must then also accept as a corollary how beneficial good money can be for society.

[FCTaiChi]

Don't think that articles like this just show ignorance about new technology.  It's a willful ignorance, half intentional.  This allows them to write negative articles that get general public attention and a huge backlash from the pro bitcoin crowd.  Negative articles are better at getting clicks, so more get written.
It's unfortunate that journalists are not interested in the truth, as much as ratings, and that their audience can't see this.  They would ignore this tactic quickly if they were willing to research.