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May 30, 2011, 03:42:30 PM |
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Money is a product, just like a car or a hot dog.
Money's usefulness lies in its ability to act as a neutral medium of exchange that everyone is willing to accept.
As such anything could be money, but with greater or lesser usefulness.
He argues that for a commodity to become money it would need to be useful. It has to answer the question; what do I do with this.
Gold is currently at $1500 give or take. If we take his argument and ask what is gold good used for? We get dental work, maybe. There is perhaps not one industrial use of gold that some other element cannot fulfill, and very, very few for which gold is the cheapest choice (if any). So how does he explain gold's insane value?
Bitcoin is sound money. It is a good product in the market of current money options. It is rare (thus not easy to debase), divisible, transferable and durable. Being money is what Bitcoin is good at, and that is not circular reasoning.
The people need sound money like they need reliable automobiles. They are willing to pay for sound money in terms of the things they produce or the skills they deliver.
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