What is Money?

[herzmeister]

1. Actually, it did have an initial non-monetary use... In its initial form Bitcoin was valued as a sign of geekiness, a demonstration of one's devotion to technology etc etc. From this initial non-monetary seed, a certain degree of moneyness began to attach itself to Bitcoin.

2. No, Bitcoin never had a non-monetary use. It's intrinsically worthless. It's a ponzi scheme. In the short term, people can irrationally bid up the price to some non-zero amount. But in the long term the rational of the regression theorem requires that the price of Bitcoin fall to zero.

3. The regression theorem is wrong.

4. The world is changing.

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[justusranvier]

Bitcoin definitely does challenge Mise's Regression theorem. In order to emerge as a "money", an asset must already have been demanded for non-monetary reasons. Bitcoin never had an initial non-monetary use.

There are three ways you can proceed with this.

1. Actually, it did have an initial non-monetary use... In its initial form Bitcoin was valued as a sign of geekiness, a demonstration of one's devotion to technology etc etc. From this initial non-monetary seed, a certain degree of moneyness began to attach itself to Bitcoin.

2. No, Bitcoin never had a non-monetary use. It's intrinsically worthless. It's a ponzi scheme. In the short term, people can irrationally bid up the price to some non-zero amount. But in the long term the rational of the regression theorem requires that the price of Bitcoin fall to zero.

3. The regression theorem is wrong.

4. Bitcoin isn't money. It's something new which is better than money.

There you go. Now we no longer need to have pointless semantic arguments and can actually talk about something relevant, like what kinds of things can we do now with Bitcoin that we couldn't do before when all we had was money.

[bb113]

If something facilitates delayed reciprocal altruism it is money.

[BitcoinCoffee.com]

Sorry, but what exactly is the algorithm of your graph's 'fixed component'?

y=x^c where c is a constant and unequal to 1.
That's why it kindof stumped me.

I don't know what that means.

[Longmarch]

Can't you say that Bitcoin's non-monetary value stems from it's relationship to the proof-of-work antispam scheme that first inspired it?  Satoshi saw that proof-of-work tokens could eventually become money, and decided to cut to the chase.


Also, this article is relevant to the subject at hand:

Halloween and Its Candy Economy

Mises Daily: Saturday, October 31, 2009 by Jeffrey A. Tucker
http://mises.org/daily/3834

There's an audio version out there somewhere.  All I can find is the text, though.

[marcus_of_augustus]

How does the regression theorem apply to prison 'money', eg. cigarettes, booze, drugs (not sure what is used these days)?

Bitcoin is similar to prison money, in that the Western states have gradually outlawed a freely traded digital money product and implemented a type of fiscal prison planet arrangement, whereby digital transactions are monitored and scrutinised with all the power of the state apparatus and every citizen is a suspect, presumed guilty. bitcoin monetisation is somewhat a natural reaction of the 'prisoners' seeking to trade with more monetary freedom. TSR being the obvious example as supposedly one of the biggest uses of bitcoin.

Arguing about the where, hows and whys of bitcoin being used as money without recognising the circumstances of our time, that has given birth to bitcoin, is discounting the context as surely as discounting the context of prisoners being incarcerated as having nothing to do with them monetising cigarettes.

[Rudd-O]

How does the regression theorem apply to prison 'money', eg. cigarettes, booze, drugs (not sure what is used these days)?

Bitcoin is similar to prison money, in that the Western states have gradually outlawed a freely traded digital money product and implemented a type of fiscal prison planet arrangement, whereby digital transactions are monitored and scrutinised with all the power of the state apparatus and every citizen is a suspect, presumed guilty. bitcoin monetisation is somewhat a natural reaction of the 'prisoners' seeking to trade with more monetary freedom. TSR being the obvious example as supposedly one of the biggest uses of bitcoin.

Arguing about the where, hows and whys of bitcoin being used as money without recognising the circumstances of our time, that has given birth to bitcoin, is discounting the context as surely as discounting the context of prisoners being incarcerated as having nothing to do with them monetising cigarettes.

Very, very good insight.

[Spaceman_Spiff]

IMHO, the regression theorem is wrong.  It was a good rule in the past, but it is not set in stone.
I think it just describes the fact that people won't accept something as money that can be printed/created to infinity straight away.
Once they get used to commodity money, you can slowly transition to fiat money in small increments without them denouncing the system, like slowly boiling a frog.
Bitcoin does not have this problem because the inflation rate is fixed, and there is no central authority to decide otherwise.

[mobodick]

Very, very good insight.

More like one-sided paranoia FUD...

[Rudd-O]

Very, very good insight.

More like one-sided paranoia FUD...

I recognize your manipulative attempt to discredit great insight by calling it names without actually presenting any argument. I reject it and observe that your behavior is dishonest and malintentioned.

[hazek]

How does the regression theorem apply to prison 'money', eg. cigarettes, booze, drugs (not sure what is used these days)?

Bitcoin is similar to prison money, in that the Western states have gradually outlawed a freely traded digital money product and implemented a type of fiscal prison planet arrangement, whereby digital transactions are monitored and scrutinised with all the power of the state apparatus and every citizen is a suspect, presumed guilty. bitcoin monetisation is somewhat a natural reaction of the 'prisoners' seeking to trade with more monetary freedom. TSR being the obvious example as supposedly one of the biggest uses of bitcoin.

Arguing about the where, hows and whys of bitcoin being used as money without recognising the circumstances of our time, that has given birth to bitcoin, is discounting the context as surely as discounting the context of prisoners being incarcerated as having nothing to do with them monetising cigarettes.

Very, very good insight.

I couldn't agree more.

The main issue people need to move past is corporealness of goods. News flash, in the digital age we discovered a whole new type of goods called digital goods that are not corporeal but which are still tangible as in they exist and aren't merely a figment of someone imagination. And just like thousands of years ago people wanted to wear some shiny physical goods, so too they may desire to wear or otherwise value a digital good. And it just so happens that bitcoins as digital goods have perfect properties to be used as money and not just for the digital equivalent of wearing, which a small community of people, I'd argue, demonstrated were willing to do. Regression theorem is correct and applies to bitcoins perfectly fine as soon as you compare the two in the context of reality in which we live today instead of the theory based upon a reality of our past.

[mobodick]

Very, very good insight.

More like one-sided paranoia FUD...

I recognize your manipulative attempt to discredit great insight by calling it names without actually presenting any argument. I reject it and observe that your behavior is dishonest and malintentioned.

You cannot observe my behaviour as dishonest or malintentioned simply because it is not.
You may, however, feel that way and that would sadden me because you would miss the point.
Moreover, you accuse me of not presenting arguments while you yourself present none in the post i was reacting to.
So maybe you can start by explaining why you think marcus_of_augustus's post was insightfull and then i will explain why it is one-sided paranoia FUD.

[mobodick]

I couldn't agree more.

The main issue people need to move past is corporealness of goods. News flash, in the digital age we discovered a whole new type of goods called digital goods that are not corporeal but which are still tangible as in they exist and aren't merely a figment of someone imagination. And just like thousands of years ago people wanted to wear some shiny physical goods, so too they may desire to wear or otherwise value a digital good. And it just so happens that bitcoins as digital goods have perfect properties to be used as money and not just for the digital equivalent of wearing, which a small community of people, I'd argue, demonstrated were willing to do. Regression theorem is correct and applies to bitcoins perfectly fine as soon as you compare the two in the context of reality in which we live today instead of the theory based upon a reality of our past.

That is not the definition used in economics.
A tangible good has its properties set in its physical presence.
If you consider pure information (like bitcoins racing around the globe) you cannot call that tangible, ever.

[hazek]

I couldn't agree more.

The main issue people need to move past is corporealness of goods. News flash, in the digital age we discovered a whole new type of goods called digital goods that are not corporeal but which are still tangible as in they exist and aren't merely a figment of someone imagination. And just like thousands of years ago people wanted to wear some shiny physical goods, so too they may desire to wear or otherwise value a digital good. And it just so happens that bitcoins as digital goods have perfect properties to be used as money and not just for the digital equivalent of wearing, which a small community of people, I'd argue, demonstrated were willing to do. Regression theorem is correct and applies to bitcoins perfectly fine as soon as you compare the two in the context of reality in which we live today instead of the theory based upon a reality of our past.

That is not the definition used in economics.
A tangible good has its properties set in its physical presence.
If you consider pure information (like bitcoins racing around the globe) you cannot call that tangible, ever.

I can and I do. I don't care what is used in economics because if it's useless to me if it can't help me describe reality. The reality is we have tangible digital goods. Clearly, otherwise I don't know why people spend hours mining for some digital gold in a game which they then trade for some other digital good, why sometimes some people try to steal these digital goods, or why people get pissy if you copy their digital song or movie that isn't even scarce.

Information is tangible. You can read it, listen to it, you can change it, you can store it, you can exchange it. If these action aren't enough for something to be tangible than that definition of tangible is useless and needs to be changed to fit the reality we actually live in.

[mobodick]

I couldn't agree more.

The main issue people need to move past is corporealness of goods. News flash, in the digital age we discovered a whole new type of goods called digital goods that are not corporeal but which are still tangible as in they exist and aren't merely a figment of someone imagination. And just like thousands of years ago people wanted to wear some shiny physical goods, so too they may desire to wear or otherwise value a digital good. And it just so happens that bitcoins as digital goods have perfect properties to be used as money and not just for the digital equivalent of wearing, which a small community of people, I'd argue, demonstrated were willing to do. Regression theorem is correct and applies to bitcoins perfectly fine as soon as you compare the two in the context of reality in which we live today instead of the theory based upon a reality of our past.

That is not the definition used in economics.
A tangible good has its properties set in its physical presence.
If you consider pure information (like bitcoins racing around the globe) you cannot call that tangible, ever.

I can and I do. I don't care what is used in economics because if it's useless to me if it can't help me describe reality. The reality is we have tangible digital goods. Clearly, otherwise I don't know why people spend hours mining for some digital gold in a game which they then trade for some other digital good, why sometimes some people try to steal these digital goods, or why people get pissy if you copy their digital song or movie that isn't even scarce.

Information is tangible. You can read it, listen to it, you can change it, you can store it, you can exchange it. If these action aren't enough for something to be tangible than that definition of tangible is useless and needs to be changed to fit the reality we actually live in.

Information also has other properties that make it intangible.
My point is that information needs a separate word to describe it sensibly.
Using paradigms that apply to physical things is broken.
Is something tangible if it can be copied?
The fact that information can have value doesnt make it tangible.
So people can mine for the value without bitcoin ever being tangible.
You seem to suggest that only tangible things can have a value. This is not so.
Modern society teaches us that even non-existent things can have a value.
Ever bought something that is more expensive because it is branded? Pure virtual added value. Just the thought of owning something of that brand makes people overvalue the tangible part of the product.

[hazek]

Is something tangible if it can be copied?

Yes. If something can be copied it must be tangible. You can't copy the big red dragon I just imagined but you can copy the song I just sang.

Information also has other properties that make it intangible.

Like?

The fact that information can have value doesnt make it tangible.

Never said it did.

You seem to suggest that only tangible things can have a value.

Seems or actually is are two different things. I did not and do not think only tangible things can have value. That's your own imagination.

[mobodick]

Is something tangible if it can be copied?

Yes. If something can be copied it must be tangible. You can't copy the big red dragon I just imagined but you can copy the song I just sang.

Information also has other properties that make it intangible.

Like?

The fact that information can have value doesnt make it tangible.

Never said it did.

You seem to suggest that only tangible things can have a value.

Seems or actually is are two different things. I did not and do not think only tangible things can have value. That's your own imagination.

Dude, you're clueless.
I cannot copy any song you sing, i can only copy some information about the song. Again the information is intangible. A container containing the information is tangible tho.
Your red dragon is exactly like an mp3. It is information stored in some medium. The mp3 on your harddrive and the red dragon in your brain. And just like you can copy your mp3 you can also copy the information about your dragon and store it in another medium. One of the things that makes information intangible is that it requires a medium of sorts to be contained. So for information to be usefull it needs a tangible substrate. But the information is not depenant on that particular instance of tagibility. It can be copied or transfered to another tangible carrier. The information is independent of the tangible carrier.

You say that you can copy tangible things but that is not true.
You can only copy information and apply that to some other tangible thing.
So you can take the information of how to build your house and send it to me and i could build another house just like yours.
But you cannot copy your actual house and simply send me the copy.
That is because your house is tangible and the information about how to build is isnt.

And you did suggest that information is tangible because people value it.
You came with the example of miners. Because they value bitcoin it must be tangible.
Your exact words were: "...The reality is we have tangible digital goods. Clearly, otherwise I don't know why people spend hours mining for some digital gold...".
So here you directly state that it is somehow clear that bitcoin is tangible because people mine for it.
I don't know what you think i'm imagining here.

I assume you understand what the word 'tangible' means.
So please tell me what aspect of bitcoin makes it tangible?
And why would you insist on applying such an inadequate description to something like information anyway? Why not find a more appropriate word that covers the intricacies of informational transfers in a better way?
Whats the point of calling it tangible when it's not?

[marcus_of_augustus]

Is something tangible if it can be copied?

Yes. If something can be copied it must be tangible. You can't copy the big red dragon I just imagined but you can copy the song I just sang.

Information also has other properties that make it intangible.

Like?

The fact that information can have value doesnt make it tangible.

Never said it did.

You seem to suggest that only tangible things can have a value.

Seems or actually is are two different things. I did not and do not think only tangible things can have value. That's your own imagination.

Dude, you're clueless.
I cannot copy any song you sing, i can only copy some information about the song. Again the information is intangible. A container containing the information is tangible tho.
Your red dragon is exactly like an mp3. It is information stored in some medium. The mp3 on your harddrive and the red dragon in your brain. And just like you can copy your mp3 you can also copy the information about your dragon and store it in another medium. One of the things that makes information intangible is that it requires a medium of sorts to be contained. So for information to be usefull it needs a tangible substrate. But the information is not depenant on that particular instance of tagibility. It can be copied or transfered to another tangible carrier. The information is independent of the tangible carrier.

You say that you can copy tangible things but that is not true.
You can only copy information and apply that to some other tangible thing.
So you can take the information of how to build your house and send it to me and i could build another house just like yours.
But you cannot copy your actual house and simply send me the copy.
That is because your house is tangible and the information about how to build is isnt.

And you did suggest that information is tangible because people value it.
You came with the example of miners. Because they value bitcoin it must be tangible.
Your exact words were: "...The reality is we have tangible digital goods. Clearly, otherwise I don't know why people spend hours mining for some digital gold...".
So here you directly state that it is somehow clear that bitcoin is tangible because people mine for it.
I don't know what you think i'm imagining here.

I assume you understand what the word 'tangible' means.
So please tell me what aspect of bitcoin makes it tangible?
And why would you insist on applying such an inadequate description to something like information anyway? Why not find a more appropriate word that covers the intricacies of informational transfers in a better way?
Whats the point of calling it tangible when it's not?

Dude, you are out of your depth ... still waiting for your explanation of why my comments were "one-sided paranoia FUD ..."?

At this point, it seems you have chosen the tangential reasoning path to cover up your slandering.

[Rudd-O]

Is something tangible if it can be copied?

Yes. If something can be copied it must be tangible. You can't copy the big red dragon I just imagined but you can copy the song I just sang.

Information also has other properties that make it intangible.

Like?

The fact that information can have value doesnt make it tangible.

Never said it did.

You seem to suggest that only tangible things can have a value.

Seems or actually is are two different things. I did not and do not think only tangible things can have value. That's your own imagination.

Dude, you're clueless.
I cannot copy any song you sing, i can only copy some information about the song. Again the information is intangible. A container containing the information is tangible tho.
Your red dragon is exactly like an mp3. It is information stored in some medium. The mp3 on your harddrive and the red dragon in your brain. And just like you can copy your mp3 you can also copy the information about your dragon and store it in another medium. One of the things that makes information intangible is that it requires a medium of sorts to be contained. So for information to be usefull it needs a tangible substrate. But the information is not depenant on that particular instance of tagibility. It can be copied or transfered to another tangible carrier. The information is independent of the tangible carrier.

You say that you can copy tangible things but that is not true.
You can only copy information and apply that to some other tangible thing.
So you can take the information of how to build your house and send it to me and i could build another house just like yours.
But you cannot copy your actual house and simply send me the copy.
That is because your house is tangible and the information about how to build is isnt.

And you did suggest that information is tangible because people value it.
You came with the example of miners. Because they value bitcoin it must be tangible.
Your exact words were: "...The reality is we have tangible digital goods. Clearly, otherwise I don't know why people spend hours mining for some digital gold...".
So here you directly state that it is somehow clear that bitcoin is tangible because people mine for it.
I don't know what you think i'm imagining here.

I assume you understand what the word 'tangible' means.
So please tell me what aspect of bitcoin makes it tangible?
And why would you insist on applying such an inadequate description to something like information anyway? Why not find a more appropriate word that covers the intricacies of informational transfers in a better way?
Whats the point of calling it tangible when it's not?

Dude, you are out of your depth ... still waiting for your explanation of why my comments were "one-sided paranoia FUD ..."?

At this point, it seems you have chosen the tangential reasoning path to cover up your slandering.

I agree with this observation of character.

[mobodick]

Is something tangible if it can be copied?

Yes. If something can be copied it must be tangible. You can't copy the big red dragon I just imagined but you can copy the song I just sang.

Information also has other properties that make it intangible.

Like?

The fact that information can have value doesnt make it tangible.

Never said it did.

You seem to suggest that only tangible things can have a value.

Seems or actually is are two different things. I did not and do not think only tangible things can have value. That's your own imagination.

Dude, you're clueless.
I cannot copy any song you sing, i can only copy some information about the song. Again the information is intangible. A container containing the information is tangible tho.
Your red dragon is exactly like an mp3. It is information stored in some medium. The mp3 on your harddrive and the red dragon in your brain. And just like you can copy your mp3 you can also copy the information about your dragon and store it in another medium. One of the things that makes information intangible is that it requires a medium of sorts to be contained. So for information to be usefull it needs a tangible substrate. But the information is not depenant on that particular instance of tagibility. It can be copied or transfered to another tangible carrier. The information is independent of the tangible carrier.

You say that you can copy tangible things but that is not true.
You can only copy information and apply that to some other tangible thing.
So you can take the information of how to build your house and send it to me and i could build another house just like yours.
But you cannot copy your actual house and simply send me the copy.
That is because your house is tangible and the information about how to build is isnt.

And you did suggest that information is tangible because people value it.
You came with the example of miners. Because they value bitcoin it must be tangible.
Your exact words were: "...The reality is we have tangible digital goods. Clearly, otherwise I don't know why people spend hours mining for some digital gold...".
So here you directly state that it is somehow clear that bitcoin is tangible because people mine for it.
I don't know what you think i'm imagining here.

I assume you understand what the word 'tangible' means.
So please tell me what aspect of bitcoin makes it tangible?
And why would you insist on applying such an inadequate description to something like information anyway? Why not find a more appropriate word that covers the intricacies of informational transfers in a better way?
Whats the point of calling it tangible when it's not?

Dude, you are out of your depth ... still waiting for your explanation of why my comments were "one-sided paranoia FUD ..."?

At this point, it seems you have chosen the tangential reasoning path to cover up your slandering.

You never asked for an explanation ...

Your post has a tone of being hunted by the 'government', everyone in a big prison, making it paranoia.
Then you only talk about them against you, which is one-sided.
And it is FUD because you use this one sided paranoia to motivate your point.
I mean you say things like: "in that the Western states have gradually outlawed a freely traded digital money product and implemented a type of fiscal prison planet arrangement,".

How is this not FUD? Where in the west is bitcoin outlawed? WTH are you talking about?

And please show me my tangential reasoning about the definition of the word 'tangible'.
Tangible is a word with a certain meaning. It does not cover information and information is not tangible. It is a simple fact of definition.