Add Manuel's blog post #188
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Hi @Mycelial1, some feedback:
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Please review my formatting changes @m52go |
m52go
suggested changes
Jun 13, 2019
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| _Manuel writes at juandemariana.org, is a perpetual student of monetary theory, and is a Bitcoin quasi-maximalist (he is almost there)._ |
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Would you mind making "juandemariana.org" a link to the actual website? I think I forgot to do that in my original PR.
| Since Bitcoin’s inception, there has been an endless debate about the explanation of its value. What backs Bitcoin? Does Bitcoin have intrinsic value? Why is Bitcoin demanded? To answer these questions many Bitcoin advocates refer to the principles established by the Austrian School of Economics concluding that Bitcoin’s main source of value is being a store of value. I believe this conclusion is the result of the toxic block size debate by which both sides of the debate wrongly narrowed the concept of a medium of exchange to money (cash). | ||
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| To make my position clear about the block size, I absolutely advocate for small blocks. I believe that running a Bitcoin full node should be as easy and affordable as possible so the system is not only decentralized but fully distributed where final users have full sovereignty over their Bitcoins. | ||
| Going back to the principles of the Austrian school, the most widely followed monetary theorist of this school, Ludwig Von Mises, developed the [Regression Theorem](https://wiki.mises.org/wiki/Regression_theorem) in his book titled [“The Theory of Money and Credit”](https://mises.org/library/theory-money-and-credit). The theorem states that for an economic good to be money it must primarily have other non-monetary uses before it can become money. Bitcoin does not fit this description. Some economists like [Block and Davidson](https://mises.org/library/bitcoin-regression-theorem-and-emergence-new-medium-exchange) have tried to reinterpret this theorem in order to shoehorn Bitcoin into it by claiming that the Regression Theorem applies only to barter economies and does not apply when there are already monetary prices. I don’t think that interpretation is correct and it is also incoherent in and of itself (see [Juan Ramón Rallo rebuttal](https://juanramonrallo.com/mises-y-block-se-equivocan-sobre-sus-teoremas-regresivos-del-dinero/)). |
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Perhaps after the last word (Bitcoins.) from line 18?
| To make my position clear about the block size, I absolutely advocate for small blocks. I believe that running a Bitcoin full node should be as easy and affordable as possible so the system is not only decentralized but fully distributed where final users have full sovereignty over their Bitcoins. | ||
| Going back to the principles of the Austrian school, the most widely followed monetary theorist of this school, Ludwig Von Mises, developed the [Regression Theorem](https://wiki.mises.org/wiki/Regression_theorem) in his book titled [“The Theory of Money and Credit”](https://mises.org/library/theory-money-and-credit). The theorem states that for an economic good to be money it must primarily have other non-monetary uses before it can become money. Bitcoin does not fit this description. Some economists like [Block and Davidson](https://mises.org/library/bitcoin-regression-theorem-and-emergence-new-medium-exchange) have tried to reinterpret this theorem in order to shoehorn Bitcoin into it by claiming that the Regression Theorem applies only to barter economies and does not apply when there are already monetary prices. I don’t think that interpretation is correct and it is also incoherent in and of itself (see [Juan Ramón Rallo rebuttal](https://juanramonrallo.com/mises-y-block-se-equivocan-sobre-sus-teoremas-regresivos-del-dinero/)). | ||
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| Mises’ Regression Theorem is based on the observations made by Carl Menger in his seminal work [“On the Origins of Money”](chrome-extension://oemmndcbldboiebfnladdacbdfmadadm/https://mises-media.s3.amazonaws.com/On%20the%20Origins%20of%20Money_5.pdf) where he describes the process of how money arose from commodities. But, what Menger did was make a historical observation, not a theoretical explanation. It was Mises who wrongly took those observations into theory with his unfortunate Regression Theorem. |
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| A popular [narrative amongst Bitcoin supporters](https://medium.com/@vijayboyapati/the-bullish-case-for-bitcoin-6ecc8bdecc1) that apply Szabo’s views claim that money **always** evolves through the following stages: | ||
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| 1. Collectible<br><br> |
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Why the extra line breaks here?
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| Mises’ Regression Theorem is based on the observations made by Carl Menger in his seminal work [“On the Origins of Money”](chrome-extension://oemmndcbldboiebfnladdacbdfmadadm/https://mises-media.s3.amazonaws.com/On%20the%20Origins%20of%20Money_5.pdf) where he describes the process of how money arose from commodities. But, what Menger did was make a historical observation, not a theoretical explanation. It was Mises who wrongly took those observations into theory with his unfortunate Regression Theorem. | ||
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| In an attempt to dodge the Regression Theorem debate others have retorted with Nick Szabo’s views in his remarkable essay [“Shelling out: The Origins of Money”](https://nakamotoinstitute.org/shelling-out/), using the collectible and store of value arguments. Szabo’s excellent work is also a historical explanation like Menger, but more detailed and precise from an anthropological point of view. |
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Would be great if the ’ and “ symbols could be changed to standard ' and " symbols.
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| Here I will explain how Bitcoin fits very well within the Subjective Theory of Value and also within the historical stages of exchange described by Carl Menger. Leaving apart deferred exchanges (i.e. credit), the basic first three stages of spot exchange are the following: | ||
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| **Direct exchange**: Barter. |
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When you view this section in the browser, these items are all melded on to one line.
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| If something arises (bitcoin) that can fulfill the sole use case of a medium of exchange better than the incumbents (barter, salt, gold, fiat etc.), then that is where the demand can be found. Can this demand can be speculative? Yes, it is speculation on the possibility of the good becoming money in the future. | ||
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| Mises had the following concern regarding new monetary goods that have no other use than a medium of exchange: (Human Action - Chapter 17 section 4 – “The determination of purchasing power of money”) |
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Would prefer to see Human Action italicized since it's the title of a book.
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| Mises had the following concern regarding new monetary goods that have no other use than a medium of exchange: (Human Action - Chapter 17 section 4 – “The determination of purchasing power of money”) | ||
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| *"A value judgment is, with reference to money, only possible if it can be based on appraisement. The acceptance of a new kind of money presupposes that the thing in question already has previous exchange value on account of the services it can render directly to consumption or production. Neither a buyer nor a seller could judge the value of a monetary unit if he had no information about its exchange value--its purchasing power--in the immediate past.”* |
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This is still not a blockquote...need to use a > symbol for that. Blockquotes are different from regular italic text in that they're indented to make it obvious to the reader that they're blockquotes. No * needed.
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Ignore this other pull request as it is deprecated: #183