Bitcoin, Postmodern Money

By Bron Suchecki

In the articles below, Keith Weiner covers many of the reasons why bitcoin is unsound and not money and rather the very model of a (post)modern monetary marvel.

In Gold, Redeemability, Bitcoin, and Backwardation, Keith explains why bitcoin is not money but an irredeemable currency, as money has to be a tangible good.

Bitcoin, Gold, and the Quantity of Money addresses the Quantity Theory of Money claim that bitcoin’s predefined quantity cap will result in stable prices of goods measured in bitcoins.

In Bitcoin, Keith discusses the importance of the bid side of a market and how real goods, like gold, have an ultimate bid or floor below which its price will not go. In contrast, bitcoin has no real bid at all, only the ever-changing bid of the fickle speculator.

Bitcoin Forked explores the concepts of fiat currency and irredeemability as they apply to bitcoin and the dollar and the key importance of backing, as a ledger is only useful if it is recording something.

Bitcoin Has No Yield, but Gold Does discusses how borrowing is a rising currency (like bitcoin) is hazardous to one’s wealth and the fact that bitcoin futures markets are only about speculation on bitcoin with leverage and are not commodity warehousing markets.

Bad Ideas About Money describes how bitcoin is a fitting final postmodern link in a chain of adulterations of the idea of what is real money.

Hidden Forces of Economics demonstrates how bitcoin “engages all the hidden forces of economic law on the side of destruction” just the same as the dollar as price speculation is merely the conversion of one’s wealth into another’s income.

In The Forking Paradise, Keith explains that because bitcoin dispenses with the need for assets and is just a ledger of liabilities, there is a powerful perverse incentive to fork bitcoin as many times as one can until the marginal ForkCoin has value lower than the cost of forking.

In Tragedy of the Speculations, Keith sees bitcoin’s skyrocketing price creating a perverse incentive for people to produce less because speculation is so much more fun. Bitcoin’s unstable price makes it unusable as money and prevents it being used for borrowing, meaning it is far from being the antidote to the madness of fiat irredeemable currencies that it is promoted as.

Bitcoin is Precise but not Accurate discusses the engineering concepts of accuracy and precision, noting that while bitcoin has precise formulas for mining and an extremely precise transaction ledger, it is based on the inaccurate quantity and labor theories of value.

Is Bitcoin a Commodity discusses why money has to be physical commodity and everything else is a form of credit. In contrast, bitcoin is not a commodity and does not pass Mises’ regression test as it has no demand other than demand for medium of exchange.

Is That a Feature or a Bug? questions whether bitcoin’s transaction irreversibility and imperfect anonymity are appropriate features for a financial businesses who ask you to trust them with your life savings. Also discussed is the political nature of bitcoin’s governance via miners and ICOs (initial coin offerings), noting that while law enforcement may be moving slowly at the moment, like a steamroller once it grabs a toe, it will keep rolling right over the body until it is made one with the pavement.

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