Bitcoin (BTC) as Money

Copper’s Essential Role in Protecting Public Health says:

Then, a lethal dose of copper ions interferes with normal cell functions.

Gold and silver are in the same column of the periodic table as copper. I’m no chemist, but that typically means that have similarities for stuff like ions.

Also, even if gold and silver were just art supplies … those do have value. I vaguely know e.g. that dye trading was important enough in the ancient world to merit carrying dyes for trade on boats.

Yeah, it makes sense. IMO the way you use 2nd order commodity is convergent with the economic good idea. Tho I’d suggest saying “2nd order good” instead of “commodity” b/c BTC isn’t a commodity (tho I understand what you mean).

“2nd order commodity value” also sounds convergent with something like objective exchange-value (tho “2nd order commodity value” is more vague/looser).

In light of that, does the TMC/Mises stuff I wrote make more sense?

IDK if this is that safe – I brought it up and explained it for a reason.

The main point of the last paragraph is just to point out that if there’s like a “1st order value” for some good, and it has some “2nd order” type usage (like gold-as-money or btc-as-money), then we expect a difference between the 1st and 2nd order values (with the 2nd being higher) and also that the value in the real world (how much it costs to buy) is its 2nd order value.

Does that make sense?

In this case, we can say:

medium 1st order value (v_1) 2nd order value (v_2)
gold v_1 > 0 v_2 \ge v_1 > 0
BTC v_1 = 0 v_2 \ge v_1 = 0

do you agree with that? (note: v_2 \ge v_1 = 0 means v_2 \ge v_1 and also v_1 = 0 so v_2 \ge 0)

Yeah – there were like entire trade routes dedicated to it IIRC.

Here’s a relevant quote I found via a wiki cite:

“History of Indigo & Indigo Dyeing”. wildcolours.co.uk . Wild Colours and natural Dyes. Retrieved 30 December 2015. “Indigo was often referred to as Blue Gold as it was an ideal trading commodity; high value, compact and long lasting”

Huh, I just realized that wiki doesn’t have a permalink function – like on github I can hit ‘y’ to change the URL to a permalink. The problem with wiki is that linking to a citation is super fragile – if someone adds a cite before the one you link to (23rd of 32 in this case), then the anchor link will go to the wrong cite :confused:.

Okay – this seems significant. Maybe conversation-tree worthy.

WRT gold, there are general reasons (common among many people) to subjectively value it: it’s dense, it’s shiny, it’s elemental and nonreactive, it’s soft, etc. So it will always have some niche of utility.

BTC isn’t like that though: there’s no reason to think there will always be a niche. And the existence of bitcoin fans here (as a reason that there’ll always be some ppl who subjectively value it) doesn’t help. That’s circular – if all those fans went away at the same time (e.g., died) why would we expect bitcoin to maintain a nonzero value? (presuming it also wasn’t being used as money at the time)

But with gold, it has utility as material – and it always will.
Like you can’t make something out of other atoms that acts exactly like gold in all ways (i.e., there’s no chemical solution). There might be chemical solutions to compete with specific properties (e.g., good conductor + malleable), but we shouldn’t expect those to also have the other properties (shiny, inert, dense, etc).
So there’ll always be some niche where gold is useful – there’s a reason to expect it will maintain a nonzero value.

The latest South Park episode is also relevant.

Edit: The episode is Post Covid: The Return of Covid

You should edit your post to identify which episode you mean (using information like season number, episode number, link, title, or air date). No one reading this in the future will know which ep you mean.

Even reading it right now I didn’t know if the latest South Park episode that I saw is actually the latest one. So I looked it up and there’s an ep today (Dec 16) so still I don’t know which ep you mean. I think that had probably aired where you live – as of 5 hours ago when your post was written – but I don’t actually know. And even if it did air you might not have known that.

I think it’s worth considering what happened with communication like this. E.g. one cause could be taking your own context for granted. It may currently be really easy to tell which episode is the latest one in your context. But you may not have thought about the contexts of current or future readers. That’s a pretty common and important error. If you suspected that was the error, you could look at other posts you’ve written and see if you could find any other examples of it.

I will respond to your first post eventually. I think that the problem is that I haven’t given an adequate definition of “2nd order value” or whatever.

I’ve been listening to Human Action on audiobook (doing this is pretty awful; I don’t recommend), and one general point it makes is that we need to be careful to frame all our discussion of “value” in terms of subjective value. Things can only be of value to an individual. I definitely wasn’t doing this. Neither were you, in e.g. this sentence:


Anyway,

What is a BTC “fan”? I assume that by fans you mean people who value bitcoin? If so, then the “fans” include almost everyone (including you, since you’d be very happy if someone sent you 10000 BTC), so your hypothetical is much stranger than it first appears.

Are you imagining like, everyone dies except one person, then concluding that the one remaining person would not value BTC? That’s true, but such an argument would also basically apply to gold: if everyone but me disappeared, a pound of gold would probably be less valuable to me than e.g. a pound of rice.

I mean someone who subjectively values bitcoin outside it’s use as money. if someone offered to pay me in BTC, I’d consider it, but i wouldn’t necessarily keep it in BTC. I consider ‘fans’ those ppl who’d bias BTC particularly (above other crypto or other methods of holding value). I’m not a fan, in that I’d only hold it for pragmatic reasons. Does that make sense?

No. I don’t think either of these definitions are sufficiently precise, since e.g. I couldn’t use them to determine whether or not I am a btc fan.

I value BTC, but do I value it “outside of its use as money”? I have no idea what that would even mean, all I know is that 1 BTC is worth like $50,000 USD right now & so BTC is quite valuable to me.

Am I a person who would “bias BTC particularly (above other crypto or other methods of holding value)”? I have no idea what this means. Are you imagining some hypothetical scenario where 1 btc has the same value as 1 eth or 1 dogecoin or 1 of any other cryptocurrency, then defining a fan as someone who would prefer to have 1 BTC instead of 1 of another cryptocurrency in that scenario?

I think we might be getting away from the point. The reason I introduced the idea of fans was to say: the fact some some die-hard core audience exists now isn’t a reason think that BTC will maintain a nonzero value. The nature of that audience isn’t too important, just that it’s not a good argument that BTC will maintain value.

I think that part of the reason why I was probing into your definition of fans is that it’s not clear to me that BTC actually relies on anything like a “die-hard core audience” in order to maintain value.

right now, it doesn’t. There’s lots of other reasons that it has value, at the moment. But if that went away, and there was no die-hard audience, why would it ever recover?

IMO, we have an answer for gold, but not for BTC.

You’ve already made this argument, and it is not definitive, as I think I showed in this post.

We don’t know how cheap and easy transmutation will get.

Also, since you guys don’t seem to be making a tree, or doing anything else related to CF (including no post mortem on the communication point I raised), the discussion is a bit off-topic.

Okay yeah, we should make a discussion tree. Besides being off-topic, I think the conversation between @Max and me was getting overwhelmingly complex/long.

I made a rough draft of a discussion tree which I think summarizes a big part of our conversation. The root of the tree is the claim that we are trying to refute. The nodes directly underneath the root are attempted refutations of that claim, the nodes underneath those are attempted counter-refutations, etc. I tried to reduce everything to essentials. Here it is:

  • In the long run, the value of BTC will NOT go to ~0.
    • Continuity matters. If something disrupts the network of BTC miners for—say—100 years, there is no good reason to think that people would stick with BTC.
      • If BTC still has value after a 100 year disruption, then miners will still have an incentive to mine it. Therefore, the reason to stick with BTC only goes away after a disruption if the value of BTC also goes away after a disruption. In other words, the argument in the node above is circular: it assumes that the root of the tree is false.
    • BTC doesn’t have any value as a commodity, so there’s nothing to stop demand for BTC from going to zero.
      • The first clause of this sentence is false. Although BTC has far fewer uses as a commodity than gold, BTC actually does have some value to people as a commodity, because BTC is already valuable. E.g. someone could use his BTC to flaunt wealth.

Are there any parts of this tree that you don’t like or don’t accept, @Max?

I watched this yesterday by the way, was pretty hilarious. Thx for sharing

Yeah, I think I did take my own context for granted. I was watching the episode at the time with a friend (it was released sometime that day). The other major factors that occurs to me is that I wasn’t sober, and was eager to post given its relevance.

I agree that it’s an important error, generally.

In this case I feel like it’s not a big deal, tho. Mb that’s part defensiveness, or trying to ‘brush it off’, so I’ll share my reasoning. The post is atypical in that: I usually think about my posts here before making them (draft them, etc) and didn’t that time; I was unusually eager to post it (like, I felt like it was time-sensitive to post it b/c the ep was recent); and I wasn’t sober. So, since it’s atypical, my intuitive reaction is that I don’t need to worry about making that mistake again (for similar-enough cases) provided I keep a better check on when I post and my motivations for posting.

That said – and this isn’t the first time I’ve noticed this pattern – I did consciously consider beforehand if I should say more or post at all, but posted anyway. in this particular case, I thought more about not giving away spoilers than context tho, which is (I think) part of why I didn’t add more context – but those two things (context and spoilers) aren’t related. Like it’s fair to omit why it’s relevant (tho we do have spoiler tags), but not to omit which episode I’m talking about.

I know I’ve made this sort of mistake outside CF though, even without all the above excuses. I don’t think it’s been v common, but I haven’t been watching for it before now.

IDK if I’ll end up looking through past posts for that sort of mistake, but it is something I am going to watch out for, esp considering that I know I’ve made similar mistakes before.

I did mention the tree before the south park post, not sure if you saw that. I agree that we’re not really sticking to the make-a-conversation-tree plan, though.

(Note: not sure exactly why, but my reply got posted to the crypto currency fraud thread instead of this one; copying it here)

Yeah – I didn’t think you’d answered it (I probs should have mentioned that).

The post you linked has problems IMO; not sure if you consider them relevant or not to the discussion, though.

Bitcoin isn’t dead between blocks – there’s no way for it to be alive without gaps, so logically it can’t be dead in those times. There is still an ongoing process – miners are hashing – but the results of that process are stochastic (next block could be in 20 seconds or 20 minutes).

The above is one reason, but another is that there’s a sense of financial continuity – but that wouldn’t necessarily be the case 2, 20, or 200 yrs later. I don’t think we need to agree on that much here btw, like roughly day-to-day continuity is enough (e.g., stock markets often close overnight, so it seems like day-by-day continuity is good enough for most finance stuff).

Yes, tho I’m not sure if the nodes correspond to each of our points or not. If each node is either something one of us claims or something we agree/disagree on, then I don’t necessarily disagree with the nodes.

Two points of disagreement are below, but this gives me an idea for a cycle we could go through to build the tree, taking turns as we build out each branch:

  • Given there’s a prior node, one of us interrogates that point. The goal of that person is to figure out the next node(s) in the tree, for that branch. The idea is that having little discussions about each point let’s us both get a good understanding for the main through-line of that branch.
  • Once the interrogator is satisfied (and the arguments are understood), a node is added, and the roles swap.

So the next step for me would be to figure out follow on nodes for the two depth=2 nodes (taking root at depth=0). It seems like you own the root node, then I own d=1 nodes, and you own d=2 nodes (in your tree). That’s part of what I’m basing the above on.

Things in the tree I disagree w/ depending on what the nodes correspond to:

(Note: Emphasis mine)
I disagree with this b/c we’re talking about something over time. Referring to the past doesn’t necessarily mean the argument is circular.

IMO flaunting wealth isn’t a thing BTC does b/c it is or isn’t a commodity – it’s a property of BTC as an economic good. Cash is the same – flashing cash isn’t flaunting wealth for anything to do with its material (paper, polymer, w/e). Similar with gold. Basically, flaunting wealth is only possible b/c the good only has prior value due to it’s properties as an economic good (i.e., a money-like thing).

Isn’t this basically what Elliot suggested you do before you started this thread?