2012-10-07 Everything You Need To Know About Bitcoins (Trace Mayer on...)

[Severian]

Trace does a good job representing Bitcoin to an honest critic. I predict Mr. Wenzel will be a future advocate.

October 7th, 2012

In this interview, I talk with Trace Mayer about bitcoins. Are they money? Will they ever become money? Do bitcoins violate the Ludwig von Mises Regression Theorem on what can become a money? Under what circumstances could bitcoins become a popular medium of exchange? These questions and many more are discussed this week at the Robert Wenzel Show.

http://wenzel.podbean.com/2012/10/07/everything-you-need-to-know-about-bitcoins/

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[bitcoinspot.nl]

i cant seem to download the mp3, can you give me a direct link ?

Thanks!

[jwzguy]

Not sure if this will work for very long:
http://media32.podbean.com/pb/2507ebff8e6c14f258d4eddd61fdeaab/5071d7ec/blogs32/411627/uploads/TraceMayer-Audio.mp3

[jwzguy]

I'm very glad to hear that Trace has a better understanding of network security now. He always gives a good interview.

[Severian]

I'm very glad to hear that Trace has a better understanding of network security now. He always gives a good interview.

Trace is the best rep that Bitcoin has in the hard money world. He's a one-man evangelist show for the protocol.

[n8rwJeTt8TrrLKPa55eU]

This is a great interview and great exposure.  Wenzel is old school and always kinda arrogant, but in the middle and at the end of the interview he shows he understands the nature of Bitcoin better than many on this forum with the Obamacare example.  The real value of Bitcoin is not incremental improvements to tasks already doable with conventional money; instead, Bitcoin's value is inversely proportional to the level of regulation and totalitarianism that a person lives under.

[DoomDumas]

+1

really appreciated

[bitcoinspot.nl]

Not sure if this will work for very long:
http://media32.podbean.com/pb/2507ebff8e6c14f258d4eddd61fdeaab/5071d7ec/blogs32/411627/uploads/TraceMayer-Audio.mp3

thanks!

[sunnankar]

Not sure if this will work for very long:
http://media32.podbean.com/pb/2507ebff8e6c14f258d4eddd61fdeaab/5071d7ec/blogs32/411627/uploads/TraceMayer-Audio.mp3

thanks!

Another version since that one is gone.

[bitcoinspot.nl]

http://wenzel.podbean.com/mf/web/d4jdj9/TraceMayer-Audio.mp3

[finway]

It seems that Trace doesn't understand Regression Theorm well by talking about electricity and computing cycles used to produce bitcoins.

[bitcoinspot.nl]

yeah ive only listened trough half of the interview but sofar i am not very impressed. i like the other interview he did a lot more.

http://www.youtube.com/watch?v=OtN9YUvh_XM&feature=player_embedded

[beckspace]

Yes, Bitcoin challenge the Mises Regression Theorem from 1912. Deal with it.

Bitcoin is money without intrinsic value: pure exchange information, no physical hassle nor some residual utility.

[Morblias]

This is a great interview! When people ask me what bitcoins are and I try to explain it, they get confused. This mp3 will help a lot!

[hazek]

Yes, Bitcoin challenge the Mises Regression Theorem from 1912. Deal with it.

Bitcoin is money without intrinsic value: pure exchange information, no physical hassle nor some residual utility.

I disagree. Bitcoins are perfectly comparable to gold.

If you go back far enough with gold you'll discover it's most common use was basically as a collectible in the form of jewellery. And because this was true in an entire community that community figured out it can use it as a medium of exchange.

Well same thing goes for bitcoins. That guy who accepted 10.000 BTC for a pizza didn't necessarily accept the bitcoins because he thought he could give them to someone else at a later time and get a similar value for them, no! he most likely thought they were cool or whatever and wanted to hold some and decided a pizza for 10.000 BTC was a fair barter price.

And since an entire community of people felt that bitcoins are cool and wanted to hold some willing to trade something of value for them(it doesn't matter that this is just an online community), people slowly saw that they can use it as a medium of exchange. And just as with gold, we went from a collectible to readily accepted money within a growing community of people.

And before you say "Well but you see, gold was started to be used as a medium of exchange because there was always the fallback demand by the jewelers present.." I would like to remind you that there is no reason why at that time, when people had no clue about chemistry and all the other elements that existed, those people should have thought that this demand will persist until the end of time. People could have discovered something else to use for jewellery or people could have changed their mind about valuing jewellery. Reasonably those people only saw a demand, not a lasting demand. And this lets call it temporary but very evident demand was good enough to spark the transition from a collectible to money. Well the same happened with bitcoins. There was a short term demand for what ever reason that sparked the transition from a collectible to money within a community.

The only way this process can now get reversed in either case of gold or bitcoins is if either lose their properties which (besides them having a temporary demand as support) made them ideal to be used as a medium of exchange in the first place.

[Zangelbert Bingledack]

Mayer made it sound like he was evoking some Labor Theory of Value shit when he was talking about electricity and computer depreciation. He later amended his statement, but it still sounded a bit unsure.

The real answer to the Regression Theorem is touched on by what hazek said just above: since the Regression Theorem talks about "universal acceptance" it is implicitly referencing a community (universal = everyone in the community). It is not about numbers, but about communities.

In the past, transactions were always local, so the community had to be local. 10,000 people in a few square miles counted as a community. 10,000 people scattered around the globe did not, since they couldn't trade with each other. You couldn't say, "The barber down the road will accept this coin, so take it!" because the barber was 2,000 miles away.

Now, with the Internet, 10,000 people scattered around the globe can trade, they are a community in the relevant ways (an economic community). "The web designer, research-chemical maker, and Alpaca-sock maker a click away will accept this bitcoin, so take it!"

The Regression Theorem then applies perfectly to the community of Bitcoin users, the money tracing back to people who thought it was cool. To confirm this, imagine that all Bitcoin users gathered in one spot. Then the number of people who value bitcoins for non-exchange purposes is non-negligible, and the Regression Theorem is satisfied. But nothing in the Regression Theorem refers to geographical communities as being real but other types of economic communities (enabled for the first time by the Internet) as being unreal.

[bitcoinspot.nl]

Yes, Bitcoin challenge the Mises Regression Theorem from 1912. Deal with it.

i agree,
austrain economics and regression theorems are  great but sometimes reality is just too fast for theories to keep up.
If we had to believe the sound money people and austrian economic guys, the dollar had to have collapsed 10 years ago.

With bitcoin its the same i guess, people accept it and pay with it, without the need for a theorem.