Comments on: The libertarian background to the deflationary design of Bitcoin

By: kewlkoin

kewlkoin — Wed, 05 Feb 2014 11:07:59 +0000

As the refrain goes: “There is to much confusion here, …”, so I´ll just point out one thing. There is no such thing as a Nobel Prize in Economics. It´s actually called “The Swedish Reichbank´s Prize in Economic Science”. Economy? A science!? Yeah, right!

By: Michel Bauwens

Michel Bauwens — Mon, 17 Dec 2012 00:56:01 +0000

In reply to Dusty. I have called for this in the past, let's see whether people with technical acumen, will indeed go for it, Michel

By: Dusty

Dusty — Sun, 16 Dec 2012 09:21:26 +0000

@Michel
There are a number of monetarist theories, let’s put them to test!
Fork bitcoin and create a blockchain with the rule you (or others) think are the best one.
Or even better, create one different version of bitcoin (and related blockchain) for each of these theories, and let people choose whatever they think is the best.
(Let’s remember that Bitcoin is voluntary, nobody forces you to use it).

Wait some time and we will see which one between Bitcoin (that perfectly incarnates the properties of an inelastic money supply as defined by Austrian Economics) or one of the other you created will succeed.

The results should be interesting, do you agree?

By: Michel Bauwens

Michel Bauwens — Sun, 16 Dec 2012 03:00:01 +0000

In reply to Dusty. Can you remind me what that challenge was? Michel

By: Peter Šurda

Peter Šurda — Sat, 15 Dec 2012 15:55:48 +0000

I posted a point by point rebuttal on my blog.

By: Dusty

Dusty — Fri, 14 Dec 2012 20:34:28 +0000

@Michel
There are two kind of economic theories: the ones that describes economics and are able to predict without any intervention, and the ones that try to impose certain rules to the market with a goal, failing.

Which are which ones is left as en exercise to the reader 🙂

In the mean time, Michel, are you willing to take the challenge I proposed you?

By: Peter Šurda

Peter Šurda — Fri, 14 Dec 2012 13:42:25 +0000

Also the traditional “deflationary spiral” argument assumes that the only liquid instrument is money, which is so far removed from reality that it can be safely ignored.

By: Peter Šurda

Peter Šurda — Fri, 14 Dec 2012 13:29:37 +0000

Even if the the non-austrians were correct about “deflationary spiral”, in particular the monetarists, their theories only apply to systems with elastic money supplies (i.e. the spiral refers to an escalating credit contraction situation, in particular as a part of the credit cycle). They don’t apply to Bitcoin since it has an inelastic supply and most likely credit will have no effect on the money supply (and thus there will most likely also not be any credit cycle). But even if it did, at the latest the “deflationary spiral” must end when 100% reserves are re-established.

I’m not an expert in non-Austrian schools but I am not ignorant of them either.

By: Michel Bauwens

Michel Bauwens — Fri, 14 Dec 2012 13:16:13 +0000

In reply to Dusty. Unfortunately, the argument that one is not educated in economics seems to come from austrian-libertarian economics; and those seem to believe there is only one kind of economics, theirs. For alternative views; see Michael Hudson, Steve Keen, Bernard Lietaer, Margrit Kennedy. MMT, etc ... Better yet is a simple course in human history to see the wide variety of rules concerning money and currency; including money with negative interest rates (the longest lasting form); sufficiency based systems (instead of scarcity based). By the way; who is arguing for a unlimited supply of money? I think the question is rather, how the supply should be regulated.

By: Dusty

Dusty — Thu, 13 Dec 2012 20:06:34 +0000

@Michel: It’s a pity you are not educated in economics, but it’s very simple to test if your beliefs are correct.

Bitcoin is opensource: just create another chain with different rules (for example without the hard limit on coins), and let the users of all the world choose which one to use.

In a few years we’ll see which one will be the most accepted, if Bitcoin or your chain.

And maybe in the mean time you’ll understand why a good medium of exchange (i.e.: money) is better if limited in supply 😉