by Bitcoin Merchant
A lot of people fret over the idea that bitcoin is “not backed by anything”. Well, I’m here to tell you that it is. It is backed by my products and services. And it is also backed by the products and services of a bunch of other people. Together we form a market.
Currently, we look to the major exchanges to help determine our exchange price but what if the exchanges are shut down or regulated out of business?
Not to worry. There are those of us who value bitcoin as a commodity. We like it for what it is and for what it allows us to do. If the prominent exchanges are taken away from us, we – the users in this small but growing community – will arrive at an exchange value on our own. Come join us, it’s not so bad.
Author’s Note: Please repost this to your website if you accept bitcoin.
by Anthony Freeman
Man, by nature, wants to be free. He wants to choose how he lives his life. He wants to choose with whom he will associate. He wants to choose with whom he will trade. He wants to choose how his money is spent. Bitcoin gives him a greater ability to do all of these.
In my previous posts (here, here, here and here) I point out the endearing features of bitcoin and the direct threat of bitcoin to governments and central banks. Because bitcoin has the potential to make these institutions obsolete, expect them to attempt to ban and restrict bitcoin anyway they can.
The incentives to use bitcoin are too great. Yes, I expect bitcoin to be “banned” and restricted by central planners in many ways. I also expect these bans and restrictions to be ignored and circumvented. The incentives are too great. Man wants to be free.
Posted in Uncategorized
Tagged Autarchy, Bitcoin, Central bank, Currency, Electronic money, Exchange value, freedom, Government, liberty, money, PayPal
by Anthony Freeman
Proposition: Bitcoin is a new commodity invented to address the market demand for a better medium of exchange.
First some definitions for terms that I will be using in this post:
- Commodity: a) an article of commerce; b) something of use, advantage, or profit; c) economics – an exchangeable unit of economic wealth, esp a primary product or raw material
- Medium of Exchange: a) anything generally accepted as representing a standard of value and exchangeable for goods or services; b) a tool or means of exchanging what you have for what you want
- Hampered Market: a market where the voluntary exchanges between individuals are prohibited or restricted
- Government: a gang of individuals who collectively act to force their opinions and objectives upon everyone else
The great Austrian Economist Ludwig von Mises theorized:
“Before an economic good begins to function as money it must already possess exchange-value based on some other cause than its monetary function. But money that already functions as such may remain valuable even when the original source of its exchange-value has ceased to exist.”
I believe this theory (it’s only a theory) is false for the reasons I will describe below. But first, the elevation of an economic good to monetary status works best in an unhampered market. In this instance I further define the “hampered market” as one that prevents individuals from using their preferred medium of exchange. When individuals are hampered (restricted) from using their preferred medium of exchange they begin to look for alternatives that allow them to operate within the hampered market. In any market a new commodity can be created with its sole purpose being to serve as a better medium of exchange.
Bitcoin is a new invention, or creation, designed to address this market demand for a better medium of exchange. As a new creation, with its own use value, it becomes a new commodity.
Here is a list of several features and benefits that make bitcoin a highly desired medium of exchange:
- increased privacy – allows people to trade more freely with less interference by third parties
- lower transaction costs – saves money
- person to person payment functionality – bypasses traditional middlemen
- limited supply – may help preserve and even improve purchasing power over time
- compact – incredible wealth can be stored on a small area of disc space or flash drive
- portable – wealth can be transferred across the room or across the globe via an internet connection
- defensible when using encryption and other forms of concealment
- added protection against theft (which includes taxation)
- decentralized – less vulnerable to attacks since there is no central depository. Any seizure of bitcoin only serves to limit the supply further and increase the value of the remaining supply.
Bitcoin is a new invention created to serve the market demand for a better medium of exchange. It derives a great portion of its value from governmental restrictions on voluntary exchange. As long as governments interfere with individual voluntary exchange there will be demand for inventions like bitcoin. In the event of the disappearance of governments, bitcoin (or something similar) is likely to continue as a desired medium of exchange because it makes it difficult, if not impossible, for new governments to gain control of the monetary system.
Posted in Uncategorized
Tagged anarcho-capitalism, Austrian School, Autarchy, Bitcoin, Currency, Economic, Exchange value, freedom, Government, liberty, Ludwig von Mises, Medium of exchange