On the Tools and Metaphors Necessary To Properly Traverse Hayek’s Denationalization of Money In the Face and Light of Bitcoin

Re-Visiting Our Cantillon Extension of Hayek

In our last essay we did a Szabonian deconstruction on Hayek using a framework we earned from doing the same (a Szabonian deconstruction) to Cantillon. Here, we revisit that conclusion, where Hayek explains that the complexity of the data necessary to optimally distribute commodities of society and the necessity of somehow organizing it into a single brain:

…that the values of the factors of production do not depend solely on the valuation of the consumers’ goods but also on the conditions of supply of the various factors of production. Only to a mind to which all these facts were simultaneously known would the answer necessarily follow from the facts given to it

This suggestion is confusing to some that think that Hayek might be against ANYTHING centralized. Rather, in the inquiry in The Use of Knowledge in Society Hayek responds to the notion that it is not possible to gather all of the information into a single bureau because of the spatial and changing nature of the data.

In our previous essay we used Cantillon’s metaphor of a landscape involving farms and a central market. As we traversed the different aspects of this landscape we noticed that recursive nature of the inquiry considering the central market itself had shops, and the merchants of those shops had to walk to bargain with other merchants (perhaps at their shops), as similar to, as if there was no central marketplace for the countryside, and farmers had to travel roads to farms to make trades.

With help from Szabo, we showed reductions in transport cost on any of these levels, map nicely to a factor of Metcalfe’s law.

One such simple example is reducing the cost of travel. Szabo gives an example:

Decreasing the costs of getting to port from field or mine by a factor of two increased the number of fields and mines accessible by a factor of four, and increased the number of possible ways to divide labor, and thus the value, by an even greater factor via Metcalfe's law.

In our Cantillon framework we noted the same factor efficiency gain if the farms could have a central market node rather than having to all travel to each farm, perhaps multiple times a week etc. (thus our market example which has a equatable but smaller framing of the countryside framework).

We then referenced Szabo again to note the upgrade to having ‘prices’ also maps perfectly to a factor of Metcalfe efficiency gain:

A related problem is that, as engineers would say, barter "doesn't scale". Barter works well at small volumes but becomes increasingly costly at large volumes, until it becomes too costly to be worth the effort. If there are n goods and services to be traded, a barter market requires n^2 prices. Five products would require twenty-five prices, which is not too bad, but 500 products would require 250,000 prices, which is far beyond what is practical for one person to keep track of. With money, there are only n prices – 500 products, 500 prices.

And then came our trick to which the unsuspecting reader couldn’t be prepared to put into proper context (thus the reason for this essay which picks this up where the last essay only introduced this clever 'trick'). The trick that is only available because we aren’t trying to prove the nature nor the origins and evolution of money-thus our thought experiment isn’t bound to the rationality or validity of such arguments.

In fact we mean leave the archeologically to the archeologist and the Anthropology to the Anthropologist (unlike Saifedean as we have shown).

This allows us to conceive of the (Metcalfe) VALUE of moving from a marketplace WITHOUT prices to one WITH (prices without considering HOW that happened as we don’t care for our inquiry!.

That we don't mean to provide an argument for the nature and origin of money frees us to make a clever synthesis of Cantillon and Hayek by noting that it was Cantillon’s FRAMEWORK that allowed him to explain the nature of the flow of money and its effects on prices between the country and the capital, that ALSO and INCIDENTALLY gives us a basis to suggest that money can port the market prices throughout the countryside.

We then consider a countryside with a city capital, now having money and thus prices everywhere, as another factor of favorable gain in Metcalfe potential and notice how such a metaphor re-compares with our earlier notion of a marketplace with prices and a distributed network of merchants with shops (each merchant representing a farm from the countryside).

Prices then, are a strange phenomenon, as if we compressed all of our continuous knowledge so locally that the signal of it somehow then spread across the entire field (albeit because of money on our instance):

Because of our Cantillon framework, we can understand Hayek's thesis that prices can create a simultaneous signal in an countryside extended from the capital which established them like as if the consensus from '...standard communication model of synchronous networks in which each pair of processors is connected by a private communication line'

This might SEEM complex at first introduction, however, we feel this is an accurate representation of Hayek that he would approve of. Furthermore we make the point in our past essay he is not warning against the folly of relying on the morality, infallibility, and corruptibility, of central authority.

Instead, Hayek’s thesis was that the collection of this sort of data of this sort of arrangement requires special consideration, that in his case and example it is impossible to use census to aggregate and analyze the statistical data involved in optimally managing resources, and that this generalizes to:

the problem of lack of simultaneous communication over continuous iterations (aka the computer science arrangement of the Byzantine Generals Problem) Or the problem of instantaneous knowledge over a field.

This essay will expand on these observations. But in a curious way.

On the Re-Synthesis of the Monetary History and Theory of Mankind Until Now

The insights we are about to expose are immense. They are to release an immense amount of energy as this will be a very important discovery we enter into.

For this, this writing and the one it leads to are not superficial. They are not quick and effortless reads. Thus, to help the ease reader’s efforts in traversing a proper understanding of money as taught by the great monetary theorists of our time Hayek and Nash (who we will invoke) the design of these essays are such that they compartmentalized to reveal many smaller satisfying observations along the way.

It will be lengthy as we are about to traverse much of Hayek’s Denationalization of Money. However we offer the reader have no sympathy. To re-synthesize the observations of all of the past history of economics philosophers of mankind, to find some unbiased generalization of their theories, to which empirical observations have never in the history of man ever run in discordance to (ie a theory that nature hasn’t broken), SHOULD be a massive endeavor of enormous energy.

Thankfully we have Hayek’s work as a computational shortcut.

Bitcoin as a Conceptual But Naturally Existing, Tool For Traversing Hayek’s Denationalization of Money

Hayek, it seems, has inadvertently, we will show, given us the complete narrative to understand how humanity might actionably solve the greatest problem it faces and the greatest problem at this time it has the ability to solve. A problem Hayek will outline for us.

But Hayek didn’t have the vantage point we have today. So he had to use theoretical notions and sometimes give examples of how those theoretical notions might look and come about in the natural world.

That Bitcoin exists would change the nature and framing of Hayek’s argument and special interest Bitcoiners having been arguing that it replaces the needs for much of his argument (and citing Hayek to boot!). We will take Bitcoin with us as we traverse Hayek to test this claim. And we will do it in a clever way.

The Ducat as Hayek's Theoretical Device an Our Clever and Helpful Evolution of It

One of Hayek’s notions, one that has some relevance and similarity to Bitcoin in the usefulness of Hayek’s essay, is the ‘ducat’.

I would announce the issue of non-interest bearing certificates or notes, and the readiness to open current cheque accounts, in terms of a unit with a distinct registered trade name such as 'ducat'.

The ducat plays a helpful role for Hayek in his inquiry as it allows him to share a conceptual device with the reader and make observations in regard to it and the economic considerations he philosophizes about.

We are going to give the ‘ducat’ an upgrade. It’s a construction but we are transparent about it and so it can be a Szabonian construction. Remember, Hayek didn’t have our vantage point, his arguments were new even to him, they were made and edited in real time over the course of his lifetime. In his writing, the ducat helps him install or instil in the reader some of the axioms needed for his ideas to unfold.

However, we will soon see Hayek was slightly lost in his own metaphor here and so we offer a slight upgrade to the concept which we feel will immediately excite the sincere reader (as it we feel it would excite Hayek).

With Our Toolkit and Proper Form

And lastly we will bring with us a framework from John Nash’s proposal Ideal Money and find a very curious and valuable synthesis with zero complexity distance between Nash’s proposal and Hayek’s proposal when traversed together. This works two-fold to give us a framework (a Nash Equilibrium literally) to traverse Hayek and also to help align our understanding of Hayek to then understand Nash’s proposal.

Therefore it COULD seem like a TREMENDOUS amount of effort is needed to verify the usefulness of reading this essay and to traverse it to harness that usefulness (depending on the scope you accept it covers). Humorously we should note there is no proper way to measure such effort (a not very clever reference to our lack of a monetary standard). Nevertheless we should offer no apologies-this essay and its insights are in their proper form.

On Metaphors As Computational Short-Cuts

In Objective Versus Inter-subjective Truth Szabo casually gives us a very powerful tool in which we will utilize for our inquiry. This technique or application is very in the spirit of the structure of our inquiries in our previous essays. In this case it is the use of metaphor and more specifically even religious metaphor to traverse a subject of complex social interaction:

What are the proper methods for critiquing traditions related to interpersonal behavior? The methods of the humanities include at their core methods for examining the subjective source(s) and interpreters of a tradition. Here, most arguments center around subjects, the authorities who are sources, transmitters, and/or interpreters of a tradition. Arguments may also revolve around the "subjects" referenced in the traditional texts: as heroic figures, strategic players, and so on. An interesting book on game theory, Negotiation Games, by Steven Brams, reinterprets several Torah/Old Testament stories as games between the characters in the stories. God becomes just one of several strategic players, albeit often with some tricks up His sleeve

It might seem like caution is needing here to not further the notion that Satoshi was an infallible deity. But to personify the implication of Bitcoin as being tenants commanded by Satoshi’s as if Satoshi’s godly to this world is no doubt inline with the primary humans involved in its inception and implementation, and should be a welcomed analogy in a mature civilization (that understands that as fallible as religion will always seem from the future looking back, it will always also be in some way 'that archaic thought system' which survived us).

Hayek and the Axiom of Competing Currencies

Here is our first easter egg; our first patternization of otherwise random and complexly distant to traverse information. We call attention to another of Hayek’s theoretical notions he uses for his inquiry with this audience:

I shall assume for the rest of this discussion that it will be possible to establish a number of institutions in various parts of the world which are free to issue notes in competition and similarly to carry cheque accounts in their individual denominations.

In Hayek’s argument it MUST be that governments do not have a monopoly supply on money. It is only then that the rest of his argument follows. The reasons for this are IN his following argument which we will traverse and explain.

On the one hand, we do NEED those reasons in order to properly assess if maybe today or some day Hayek’s axiom is conducive to nature (and then and thus his arguments could be said to be immediately relevant).

However, nevertheless, we can, at least especially in today’s time with the existence of Bitcoin, loosely understand what Hayek is pointing to.

Our computational shortcut and tool we will take with us from this is that since Bitcoin makes it implicit that Hayek’s axiom stands, its reasonable to represent in Hayek’s argument, Satoshi, as a God to our realm. In Hayek's realm its relevant that Bitcoin not only provides a non-government currency option but also its existence implies competition. A useful representation of this need for an 'axiom of competition' for Hayek's argument as if it were commanded from Satoshi as a God we perhaps be:

Let there be no government monopoly on the issuance of currencies.

And then for us to say

...And from then on there were competing non-government currencies.

And so this is how we will narrate parts of these essay's in order to highlight which parts of his argument are different today that didn’t apply before Bitcoin existed.

The reader will find this metaphor not only appeals to the visual style of thinking but the wrapping of Satoshi as a God will help the causal non-economist hobby Bitcoiner enter into Hayek’s argument.

We will see that using the metaphor of Satoshi as a God and already having him establish the tenant of competing currencies reduces the complexity for the casual reader of today dramatically.

On the Disillusionment and the Szabonian Representation, of a Bitcoin Maximalist

We have already had a release of energy and have hardly begun any Szabonian deconstruction.

In Hayek’s argument, there is always the possibility to establish new currencies, and although it hasn’t been discussed by us yet that there might be still only one currency that survives the competition, we are going to show that in Hayek’s argument the purpose for his axiom of competing currencies is for the ends that such multiple competing currencies provide.

That is to say we are going to suggest without multiple competing currencies the significant ends which Hayek is after can’t be achieved. In fact Hayek quickly dispels such a myth:

The main advantage of the proposed scheme, in other words, is that it would prevent governments from 'protecting' the currencies they issue against the harmful consequences of their own pleasures, and therefore prevent them from further employing these harmful tools. They would become unable to conceal the depreciation of the money they issue, to prevent an outflow of money, capital, and other resources as a result of making their home use unfavourable, or to control prices-all measures which would, of course, tend to destroy the Common Market.

Explicitly his proposal he explains satisfies these requirements BETTER than a single inter-national currency such as Bitcoin:

The scheme would indeed seem to satisfy all the requirements of a common market better than a common currency without the need to establish a new international agency or to confer new powers on a supra-national authority.

Thus Hayek explains not, that the intention of the scheme is to force government money out of favor, but rather to put it into a 'conform or die' survival of the fittest setting. Then whether or not a government let go of the tendency to corrupt the natural equilibrium of its supply would simply determine if people used it or not:

The scheme would, to all intents and purposes, amount to a displacement of the national circulations only if the national monetary authorities misbehaved

Here we have shown a Szabonian deconstruction of the Bitcoin Maximalist view of Hayek:

bitcoinMaximalist{hayekDenationalizationOfMoney}

On the Deconstruction of the Axiom of Competing Currencies and the Monopoly over Them

Thus we can see that there has been a nefarious construction on Hayek’s work and we assume, because of Szabonian deconstruction, that this construction exists to cover up an inconsistency. This assumption helps us frame what that construction probably looks like (ie their construction is probably framed to fix an inconsistency):

Bitcoin will monopolize in a world of the Axiom of Competing Currencies

Then if pointed out the inconsistency we should expect the Bitcoin maximalist response such as:

All other coins are shit

We have a nice way to represent this in our formal language:

Shit{!Bitcoin}

Thus we bring along with us our next pleasant and easy to enter into thought device-the definition of the Bitcoin Maximalist, slightly modified from any commonly used definition today. That is to say when we reference the Bitcoin maximization from here on out, we refer to those that wrap anything that isn't Bitcoin as being shit.

On the Grave Significance of Understanding and Applying Hayek’s Proposal in His Words

We will bring this perspective or archetype of a person that subscribe to shit{!bitcoin} as we traverse Hayek and test the complexity distance and see whether or not the views are conducive.

And in fact we will see that they quite obviously aren’t and in fact Hayek warns against the dangers of what would be a Bitcoin only world. Not only do we quite seriously mean to accurately point out the truth of this. But we are serious about the significance of it-as serious as Hayek ends his essay:

There is thus an immense educational task ahead before we can hope to free ourselves from the gravest threat to social peace and continued prosperity inherent in existing monetary institutions.

It will be necessary that the problem and the urgent need of reform come to be widely understood. The issue is not one which, as may at first appear to the layman, concerns a minor technicality of the financial system 'which he has never quite understood. It refers to the one way in which we may still hope to stop the continuous progress of all government towards totalitarianism which already appears to many acute observers as inevitable. I wish I could advise that we proceed slowly. But the time may be short.

Notice again, against the maximalist prophecy Hayek's proposal is not for the construction of a new system (but rather a call for the effects of the introduction of the axiom of competing currencies):

What is now urgently required is not the construction of a new system but the prompt removal of all the legal obstacles which have for two thousand years blocked the way for an evolution which is bound to throw up beneficial results which we cannot now foresee.

On the Szabonian Deconstruction of shit{!bitcoin{hayek}}

It is our next pleasant and easy to enter into observation that as we traverse Hayek with our tools, we will remove from him the nefarious constructions as applied by the shit{!bitcoin} thought systems.

All along the way, stop after stop, we will show how discordant a view of wrapping the axiom of competing currencies with hyper-bitcoinization is with Hayek’s proposal.

Obviously the Bitcoin Maximalist will claim ours is the nefarious construction hoping the complexity distance of their argument, since its based on traversing Hayek to prove it inconsistent, is such that their sincere agents won’t become aware of the inconsistency.

However, since ours is a PROPER read of Hayek, we fully expect all non-maximalist systems to fully support our disambiguation or more specifically all reputable Hayekians. The claim here is not subjective, it's simple, our observations will be uncontroversial except with the Bitcoin maximalist who I dare say will not answer to a single point of inconsistency this essay proves their wrapping of Hayek.

Their arguments are therefore now immediately made inconsistent, and they will now need to resolve this inconsistency with the new axiom:

shit{jalsEssay{maximalistsHijackedHayek}}

Thus Satoshi Bestowed Us with Hayek’s Axiom of Competing Currencies

The Maximalists then hid the fact that Satoshi really provides us with empirical grounds to consider the relevance and significance of Hayek’s proposal.

The Bitcion Maximalist will cry to us not to do this. They will say it wasn’t Hayek’s intention-Bitcoin changes things. They will say Hayek didn’t have Bitcoin to consider else he would adopt 'the axiom of Bitcoin monopoly over competing currencies'.

As turing machines, let us validate the truth of that.

And so in the Bitcoin Maximalist system no doubt we are threatening to walk to the edge of the earth. They claim we will fall off if we dare do so. However Hayek is explicit about the purpose of his scheme:

The purpose of this scheme is to impose upon existing monetary and financial agencies a very much needed discipline by making it impossible for any of them, or for any length of time, to issue a kind of money substantially less reliable and useful than the money of any other

At the behest of the cries of the Maximalist that claim Hayek would rather, if he knew of Bitcoin, get rid of governments ability to print money or government altogether, we claim that is a nefarious construction which wraps Satoshi’s work.

Nonetheless we can understand, and easily enter into, that the proper and most useful framework to understand and apply Hayek’s work to today’s present time circumstance are to consider it such that it was Satoshi that declared:

From here on out let there FOREVER be MANY competing currencies

And so there was...

...in the context, that is relevant to Hayek’s argument, and the context that is in contrast to the Bitcoin Maximalist prophecies and perversion of Hayek.

On The Modification of the Ducat as a Szabonian Construction

We want to be able to say some constructions are useful and some aren’t. We need the language to do so and we want some metric. But even without a metric we can still have the language and make claims of either sincerity or nefariousness.

Transparency is part of this.

We point this out also because our construction on the ducat, our wrapping of it, is curiously not much of an addition. It perfectly fits in Hayek’s proposal such that the reader hardly has to stretch to consider it.

In a sense the nature of the existence of the usefulness of it comes from the liveness of Hayek’s framework. He hadn’t yet removed himself from it.

Thus there is a curious nature in the naturalness of this construction. Installing Bitcoin as the great assertor or placeholder of the most mystical part of his argument (thus enforcing the necessity that competing currencies be an axiom), allow us to free from the ducat the part of it’s design that Hayek only intended to use it for to assert,imply, and illuminate the axiom with.

Put more simply, there is a reduction in complexity when we add this construction (perhaps because it could rather be framed as deconstructing something Hayek constructed), yet it is a construction.

We point this out for increased transparency but also because the simplicity of our observation should not let the clever never of it go unnoticed.

It's the cusp and implementation of the cumulative history of the greatest economics philosophers of mankind and because of their observations of the historical and natural evidence they have drawn as a civilization thus far.

It's a simple observation that Hayek didn’t have at his disposal because his ducat needed to play a dual role: one to express the monetary nature and policy of privately issued currency, and the other to continually imply to the reader the implications of the axiom of competitive currencies.

jal{ducat}

We also introduce a computational shortcut with our evolution in regard to syntax. The ducat was missing something like this:

ducat+

ducat

ducat-

The Bitcoin and Bitcoin Maximalist looking to prove or show where Bitcoin fits into Hayek’s argument will be forever lost at this point.

But for the sincere readers of those systems and other sincere readers that aren’t so well versed in the concepts we can loosely wrap as ‘free-banking’ (because those well versed in free banking don’t need an explanation as to the incredible amount of complexity our syntax has removed from economy theory), the nuance that our ducat syntax highlights, as we will explain, expresses a special and certain nature of the ducat that is critical to grasp in order to understand Hayek’s proposal.

And so again we will say that anyone well versed in free-banking will find what we highlight as being uncontroversial. And that these free banking experts will almost certainly be well versed in Hayek, and will find our intention and explanation with regard to the ducat absolutely pleasing and concordant with their view of Hayek’s work.

I know of no better judges on this other than perhaps Szabo and Selgin et al (Selgin could list a group) who I claim (if they had no reason to be bias otherwise) would give the same support of what I have done here (aside from the non-fatal corrections necessarily to which I can hardly be blamed for and welcome).

On the Nature of the Ducat in Regard to the Axiom of Competition

Hayek notes its, ‘... an extraordinary truth that competing currencies have until quite recently never been seriously examined.’

In the the footnote he is more explicate:

There is no answer in the available literature to the question why a government monopoly of the provision of money is universally regarded as indispensable, or whether the belief is simply derived from the unexplained postulate that there must be within any given territory one single kind of money in circulation-which, so long as only gold and silver were seriously considered as possible kinds of money, might have appeared a definite convenience. Nor can we find an answer to the question of what would happen if that monopoly were abolished and the provision of money were thrown open to the competition of private concerns supplying different currencies.

Notice, in contrast to the Bitcoin or gold maximalist view, Hayek explains its a mistake and habit to attribute the idea of competing currencies to the idea that everyone gets to issue but the same currency:

Most people seem to imagine that any proposal for private agencies to be allowed to issue money means that they should be allowed to issue the same money as anybody else (in token money this would, of course, simply amount to forgery) rather than different kinds of money clearly distinguishable by different denominations among which the public could choose freely.

In a sybil attacked social sphere its impossible to get this nuance through, but its by no means acceptable to suggest Hayek’s argument applies to one currency monopolizing the rest in any shape or form. It is based on the competition of the currencies that Hayek means to show us something. If there is no such competition, he isn’t able to reach his conclusion.

For this the ducat played the role of the pestering notion that government monopoly rules don’t apply.

On the Axiom of Survival of Fittest in Regard to Currencies and Hayek’s Argument

It is only because of the axiom of competition, or rather that there exists such competition, that all currencies in Hayek’s inquiry are subject to the market valuations based on their underlying supply and demand variables.

In economics in order to express the intent of this aforementioned sentence correctly it depends on the context and the times. For the general reader it can be loosely thought of as ‘good currencies will have customers and bad currencies will have none’ and this before we have defined what a good or bad currency or money is.

Thus it's relevant to consider that Satoshi bestowed this on us with the invention of Bitcoin as if he said:

Let it be that good currencies will survive and bad currencies will not

Again this runs in contrast the maximalist view and we dare them to cite Hayek when they try to somehow disagree.

On the Nature of the Market Pressures On the Currencies They Valuate

Of the competition of currencies, which Satoshi bestowed, Hayek says of the implicate nature of them, the issuers will have control of their market respective value based on how they control the supply of their currencies, and the market will compel them to strive for constant the most approximately constant purchasing power:

It seems to me to be fairly certain that:

(a) a money generally expected to preserve its purchasing power approximately constant would be in continuous demand so long as the people were free to use it

(b) with such a continuing demand depending on success in keeping the value of the currency constant one could trust the issuing hanks to make every effort to achieve this better than would any monopolist who runs no risk by depreciating his money

(c) the issuing institution could achieve this result by regulating the quantity of its issue

(d) such a regulation of the quantity of each currency would constitute the best of all practicable methods of regulating the quantity of media of exchange for all possible purposes.

This is again only because of the axiom of competition in we express as Satoshi having bestowed (perhaps today there aren’t many or multiple competing currencies where private ventures can control their respective issuance but if we believe Bitcoin is immortal then so is the claim that governments no longer have a monopoly on issuance-somewhere between those truths we should find religious metaphor helpful):

Clearly a number of competing issuers of different currencies would have to compete in the quality of the currencies they offered for loan or sale.

On the Nature of Ducat+ and Ducat- Versus Ducat

Thus in Hayek's argument the ducat, as one such competing currency, doesn’t quite work like Bitcoin and again our distinction here is wholly conducive to what we feel would also be a Hayekian’s interpretation of Hayek’s work here. In fact they should find it quite re-reviving.

That is to say the ducat has a demand and a supply ratio that changes and CAN be controlled by the issuer. In this case in fact the issuer is Hayek, as in his arguments it is the currency HE issues, as if he is a new competing private currency issuer in his argument.

And so in a way its as if he was so intent on arguing for the importance of the most properly managed ducat, he forget to signify to the reader, to help them enter into and understand his inquiry, that the ducat if not properly managed would have a supply to demand ratio where it is either oversupplied:

ducat+

Or undersupplied

ducat-

And then of course Hayek’s ducat is simply the ducat (or should it be specially represented such as hayek{ducat} or ducatH etc)

For this in a way we could have fooled the reader by saying ducat is a German word such that we need to explain it better. In this sense as we use it we will evolve it as if we understand the translation better.

On the Re-Solution of the Quantity theory of Money and the Demand Theory of Money

The Hayekians already know what I have done here. From the chapter THE USELESSNESS OF THE QUANTITY THEORY FOR OUR PURPOSES Hayek explains something that rings to the want of Bitcoin Maximalists and Gold Maximalists to explain this theory as though it was meant to create a monopoly for the best currency:

The usual assumptions of monetary theory, that there is only one kind of currency, the money, and that there is no sharp distinction between full money and mere money substitutes, thus disappear. So does the applicability of what is called the quantity theory of the value of money-even as a rough approximation to a theoretically more satisfactory explanation of the determination of the value of money, which is all that it can ever be.

This requires no efforts whatsoever to convince the Hayekian or the free-banking proponent that trying to fit Bitcoin as the ducat is trying to force the quantity theory of money where Hayek is adamant it doesn’t belong.

That a Bitcoin maximalist is so ignorant and self-conceited they would twist the arguments of a great and important philosopher is one thing. But the sincere reader should find it disturbing to know that these people are in fact encouraging what Hayek suggests is the very worst advice possible for our economy.

It’s literally and actually damaging to peoples lives.

On Bitcoin{ducat}

To understand our ducat notation (not to be confused with our wrapper{x} notation) we consider what it means to think that Bitcoin wrapping ducat makes sense and why it doesn’t.

In the demand theory of money there is both the supply of it and the demand for it, thus we can say there is too much or too little, in relation to the demand for the population it serves to hold it.

Bitcoin certainly has these things. But what it doesn’t have is the management of it.

Let's be clear, there is some determination of it, since the mechanism that Satoshi embedded in it effectively forces the honesty of its forecasted supply. However there is no such mechanism that means to target the management of the ratio of supply to demand.

To Bitcoin maximalists that misrepresent Hayek this is part of Bitcoin’s holy nature. They will claim Hayek supports the argument that an unmanaged currency is the best currency.

Hayek never made that argument, in fact he was expressly against it when he addressed Friedmans argument, which Hayek felt was quantify theory based, and summarizes by Friedman as:

The stock of money [should be] increased at a fixed rate year-in and year-out without any variation in the rate of increase to meet cyclical needs.

What is important to understand, is that it doesn’t matter that Friedman’s money is not finite, that its only like Bitcoin but with an infinite tail. The issue Hayek take’s is that there is no MANAGEMENT of its ‘ducat ratio’:

My fundamental objection to the adequacy of the pure quantity theory of money is that, even with a single currency in circulation within a territory, there is, strictly speaking, no such thing as the quantity of money, and that any attempt to delimit certain groups of the media of exchange expressed in terms of a single unit as if they were homogeneous or perfect substitutes is misleading even for the usual situation. This objection becomes of decisive importance, of course, when we contemplate different concurrent currencies.

A stable price level and a high and stable level of employment do not require or permit the total quantity of money to be kept constant or to change at a constant rate. It demands something similar yet still significantly different, namely that the quantity of money (or rather the aggregate value of all the most liquid assets) be kept such that people will not reduce or increase their outlay for the purpose of adapting their balances to their altered liquidity preferences. Keeping the quantity of money constant does not assure that the money stream will remain constant, and in order to make the volume of the money stream behave in a desired manner the supply of money must possess considerable elasticity.

What Hayek has says flies in the face of an hyper-Bitcoinization argument that means to assert an axiom of monopoly as wrapping the axiom of competing currencies:

axiomOfMonopoly{axiomOfCompetingCurrencies}

Hayek also perfectly states that a money with a fixed supply does not attend to the problem his proposal means to address:

As regards Professor Friedman's proposal of a legal limit on the rate at which a monopolistic issuer of money was to be allowed to increase the quantity in circulation, I can only say that I would not like to see what would happen if under such a provision it ever became known that the amount of cash in circulation was approaching the upper limit and that therefore a need for increased liquidity could not be met.

The outcome of such a scenario, Hayek footnotes, is the action of the call I fear of the Neo-Marxist (this is not political declaration against Marx but a pointer to nefarious persons that see civil unrest as means and am ends). The call for panic:

1 To such a situation the classic account of Walter Bagehot [3, penultimate paragraph] would apply: 'In a sensitive state of the English money market the near approach to the legal limit of reserve would be a sure incentive to panic.

On the Ducat Rating of Bitcoin

To help us further distinguish between the quantity theory view of Hayek’s work (which is a misrepresentation of it) and the subjective value theory of money view (or what we could also call the freebanking view) we can understand that Bitcoin has no management of its supply to targets its ration versus the demand for it.

Thus if the purchasing power continued to rise, given that it has a finite supply, its loosely agreeable to suggest that Bitcoin is a ducat- money:

ducat-

It seems like a negative connotation but it simply means that we expect the finite supply of Bitcoin, especially in its infancy as it rapidly increases in general comparative exchange value, to continuously under-serve the demand.

Although the nature of economics and money is far too complex and nuanced to really state this firmly, its easy to understand now why the insertion of Bitcoin for ducat is a nefarious construction.

It removes the ducat of the necessary supply/demand targeting mechanism which is exactly and only what causes Hayek’s argument to allow the ducat currency to compete.

And in fact Hayek stated emphatically:

No authority can beforehand ascertain, and only the market can discover, the 'optimal quantity of money'.

And so we can see again that the BitcoinMaximalist and the Saifdeanian’s who all mostly only exist as a sybil attack have perverted both Hayek and Satoshi’s intent, knowing they have since until now wrapped his argument as if it is their own, and worse, wrapped Satoshi's in it as if it was his own.

So of our inquiry, because of a complaint from Hayek to Satoshi about Satoshi’s followers to which Satoshi agrees, he commands:

Bitcoin is not the Hayekian optimal supply of money, nor is any inelastically supplied money in the face of an increasing demand for it.

And so it rang through all the land.

On Hayek’s Optimal Money Policy As a Central Banker to the Ducat

Central banking of Hayek’s time was not so well developed as today nor was the public so used to it. We feel if Hayek were to give his arguments today he would recognize the value of upgrading his observations to a central-banking sphere. We will do this sometimes, this approach is again quite familiar from our previous essays.

This will double as an opportunity to better apply his observations to a moral international view of the existing major currencies of today and also to help the readers of today visual better what Hayek meant to convey.

For this, and with regard to the ducat, consider Hayek as the manager of his own currency supply that decides and enacts monetary policy on it freely (as opposed to Bitcoin in which not even Satoshi can enact changes in monetary policy):

I would announce at the same time my intention to regulate the quantity of the ducats so as to keep their (precisely defined) purchasing power as nearly as possible constant. I would also explain to the public that I was fully aware I could hope to keep these ducats in circulation only if I fulfilled the expectation that their real value would be kept approximately constant. And I would announce that I proposed from time to time to state the precise commodity equivalent in terms of which I intended to keep the value of the ducat constant, but that I reserved the right, after announcement, to alter the composition of the commodity standard as [46] experience and the revealed preferences of the public suggested.

What Hayek is saying in our ducat language is that he will do everything he can to keep the ducat ratio at ducatH. That is to say if the ducat ratio of the Bank of Hayek is in short supply as far as the public is concerned ducat- he will print more. If the reverse is true (ducat+) then he will take measures to buy back his issued units.

Thus we can see a very prominent distinction between the type of money that facilitates Hayek’s argument and Bitcoin. A scenario where we ASSUME ducatH is exactly the assumption that removes mechanism for Hayek's proposal.

That is to say the assumption of ducatH, or that a currency is perfectly well managed in regard to it supply to demand, and that the currency has no managed of this ratio is the assumption of the quantity theory of money (this statement might need slight alteration but the author is convinced there is a conducive comparison to be made).

Cantillon And the Quantity Theory of Money

Another interesting easter egg for those that have taken the time to understand our Szabonian deconstruction of Cantillon and our use of it for the understanding of Hayek’s Use of Knowledge.

The exact same mistake that those that cite the Cantillon effect make (and including Swan Bitcoin that somehow defines it on wiki for the human race), to think of Cantillon's argument in terms of centrally banked money, is Hayek’s complaint of Bitcoin and Gold Maximalists here.

In Cantillon’s framework central banking hadn’t developed for him to make the complaint of it that other's today make. The quantity theory of money was the relevant view so it was part of the premise for the argument Cantillon made, which was essentially: GIVEN the quantity theory of money isn’t it strange that a sudden increase in the supply of gold doesn’t also result in uniform increases the prices of the economic it invades.

Put another way and using our new syntax, entire argument of Cantillon was to show that even with a ducatH money, even with just a pure gold money and the assumption that a gold coin has its own commodity based value, there can be a general phenomenon that would be AS IF the money was either ducat- or ducat+.

On the Mathematics Behind the Re-Solution of the Quantity Theory and Subjective Value of Money

Imagine units of gold have their own value bestowed and maintained by a benevolent infallible god. This is what the quantity theory of value does. Thus in this economic system of thought if you double the gold you don’t decrease the prices by half, you increase the wealth of everyone by double!

From today’s perspective or the subjective value theory of money thats absurd. Instead if you double the money people get twice as poor!

‘But how could they be poorer their wages double!’ Cantillon will tell you! And the economic action increases perhaps he would add.

This must be the messed up world of the quantity theory of money Hayek complains about!

But we can assure the reader Hayek is wholly able to enter into Cantillon's observations. They simply assume the gold was added to the economy but somehow at no expense to the value of it.

That the supply of gold increased but for whatever reason we assume that the god controls the value of it from going down regardless of the added units.

Silly you think, well that's the contention of the quantity theory of money. But from some economic inquiries and viewpoints it's a perfectly useful and rational assumption.

Bitcoin in fact is one such example that because of its circumstances we don’t expect new additional units to lower its purchasing power.

Hayek for his argument conversely needs the concept of the subjective valuation of monies. He has no mechanism without it.

Cantillon made the argument that an increase in the supply of gold money has a not uniform effect on the prices of the economy. Although it's a very important point, critical to Hayek’s argument even, it does NOT show that a commodity money based economy is free from the concept of inflation nor the lag, nor the not uniform distribution of it.

In this the concept of the EFFECTS of the change of the supply and demand curve ratios of a money are the same for either theory. Or in other words they are part of a bigger generalization (I don’t feel this is something that hasn’t been said probably many times by main monetary philosopher)

This is thus where the the quantity and demand theories synthesize and re-solve.

On Hayek and the Government's Role in Our Inquiry

It is a mischaracterization and nefarious construction of the maximalists view that Hayek meant to prevent government from participating in the currency competition:

I feel I ought to tell the reader at the outset that in the field of money I do not want to prohibit government from doing anything except preventing others from doing things they might do better.

Ours is a SZABONIAN deconstruction as the insertion of governments, who’s currencies clearly have ducat ratios, and ducat management, have the ability to enact Hayek’s ducat policies shows the minimalists argument inconsistent with their claims that Hayek argued for or preferred a fatal result for our central banking system and to replace it with something new:

What is now urgently required is not the construction of a new system but the prompt removal of all the legal obstacles which have for two thousand years blocked the way for an evolution which is bound to throw up beneficial results which we cannot now foresee.

Thus in our toolbox we will also take with us also the question of what is the optimal Hayekian policy (ducatH?) for central banks in a setting where the axiom of competing currencies applies. Thus we will take with us the question of what the optimal management for CBDC’s and traditionally central banked currencies in this setting might be as well.

We bring along with us then central banking as a whole in our inquiry into Hayek’s work. Something that is blasphemous to the maximalists and Saifedean Ammous. This is our clue we are about to expose these snakes.

But if we are sincere and serious and we care that there is something interesting or valuable to observe about the re-solution of central banking and Hayek’s work then we will plod on.

On the Szabonian Deconstruction of Satoshi’s Intention for Bitcoin

And now another pleasant and easy to enter into surprise. Consider the root problem Bitcoin is meant to address as per Satoshi’s introduction of it:

The root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust.

Then it's an added construction, a hidden, ignorant, and nefarious construction, that does NOT agree with Hayek’s work to assert that Satoshi meant, especially as an extension of Hayek’s work, to have Bitcoin end central banking.

To the contrary, but the simple observation of the actual words, and what we argue was his actual intention, Satoshi realized the thermodynamic limitations of Bitcoin did not preclude it from serving to organize the central-banking economy into a Hayekian landscape.

Although we have jumped into the concept of a ‘Hayekian landscape’ that we haven’t quite defined, the read should find it natural, if they reader our essay on Cantillon where were traverse a Cantillon framework that was simply the metaphor of a country side of farms surrounding a city.

Our comparable Hayekian framework then is simply where the axiom of currency competition applies in consideration and we simply mean to suggest that central banks certainly implicitly exist in this consideration and Hayek certainly mean them to:

The scheme would, to all intents and purposes, amount to a displacement of the national circulations only if the national monetary authorities misbehaved

Even then they could still ward off a complete displacement of the national currency by rapidly changing their ways.

Thus again we call upon Satoshi to say, “Reign your subjects in Satoshi’. And so Satoshi said:

Central Banks will exist to compete with Bitcoin

And so it was that central banks existed, and they competed with Bitcoin

On the Re-Solution of Hayek and Nash Via Our Cantillon Framework

We are also going to now bring Nash with us.

However, this means something special that only perhaps the general poker player population of the world would most readily enter into.

First we have to understand what is called ‘the nash equilibrium’ and specifically a particular nature of it. We can use paper, rock, scissors (Rochambeau) to illustrate what we need to take with us, that is “nash’.

Consider what strategy you would choose versus an ai (since chatGTP is the relevant example to use) that would throw only rock as a choice.

It’s easy to know to pick paper.

Then consider the AI will pick rock 2 times out of 3 and paper 1 time in general.

We don’t know the exact outputs but if it chooses rock more than paper then we can win in the long run with scissors.

Now consider what strategy you would choose if you face versus an AI that would throw as a choice a RANDOM pick of either rock, paper, scissors.

We are left indifferent and there is no strategy that can exploit the AI. We can throw whatever we want and not have the power to respond to the AI in a way to win in the long term.

The AI’s strategy here happens to be the nash equilibrium of paper rock scissors, but only because if we also enter into the same strategy, we are then and thus locked such that neither us nor the AI, in a continuous and infinitely iterative amount of sessions, can gain upon the other by changing strategies.

It’s a very limited observation in the requirement for its application and it is very often applied where it shouldn’t be.

The natural and most proper application is simply to suggest that between two rational self interested agents (that is in the game theoretical sense that they don’t have, beyond immediately specified utility functions, ability to foresee the consequence of present actions to future decisions and interactions of and with their opponents) there is no ability without exogeneity for the players to change their strategies once they are each entered into a corresponding nash equilibrium strategy set.

For Bitcoin, for example, the game theoretical assumption of rational-self interest, was relevant to Bitcoin because cooperation doesn’t scale. On that account at the bounds of scalability you need to axiomize the system on individual self-interest.

That someone might complain that the mining for example has been cartelized, is only an expression of the idea that its cartelized by individuals and their rational self interest.

As for the Nash Equilibrium which at least loosely requires the concept of players with rational self-interest what we understand with the paper, rocks, scissors NE, is that it illuminates the concept of what would be TOO much OR TOO little of one choice.

That is to say if the AI chooses to throw more than ⅓ at random of either of rock, paper, scissors, they then deviate from the Nash Equilibrium and thus open themselves up for our ability to deviate to exploit them.

HOW we will exploit them COMES from the counter to their DEVIATION from the Nash Equilibrium.

If we say, ‘Our opponent throws TOO much rock’ how much is too much? We are saying it is a measure FROM the Nash Equilibrium. Too much rock in paper, rock, scissors, then is too much more than ⅓ at random.

What Nash showed was special about this strategy (with this special property of having no ability to gain from the deviation between opponents locked in it) is that it applies to all non-cooperative finite games with finite players.

Why it’s special is homework for the reader but we are going to use it nefariously with Nash’s implicit permission-where it’s not supposed to apply. That is to say the shocking corollary to Nash’s observation that all such games have Nash Equilibrium is simply:

that if you can render a problem down to that of a game of this sort, you have thus rendered it solvable.

You can see the complaint and the folly we are about to make. We are going to pre-define our Nash Equilibrium and then as we follow Hayek we are going to render the problem he expressed down to a game. Once we have perfectly done that we are going to say the Nash Equilibrium thus applies.

This would otherwise be the grossest application of the Nash Equilibrium one could imagine. It is quite the opposite of how to apply it as it is a formal game theory concept and very well defined with mathematical syntax etc.

However, we aren’t trying to make claims in the realm of game theory. We simply feel that this will help our framework for not only traversing Hayek but extending his work to understand Bitcoin through the Nashian orientation of it.

When the poker players make a play it is perhaps too loose, with too weak of hands, or too tight with only good hands and not enough bluff hands, or whether they feel they played perfectly they will declare this all in relation to the nash equilibrium of their game.

It is such a normal custom between players to relate their play to the Nash Equilibrium they will say, “I would go with Nash here” or “I would play together than Nash here”. Some of them no doubt without really knowing who Nash is.

In the spirit of all this we say ‘we're bringing Nash along with us here’ and thus we will put the Nash Equilibrium exactly where it most usefully belongs in concept and also all along the way in our arguments draw out wisdom from this Equilibrium as the balancing anchor of our framework.

Machiavellian Studies of Money

Nash often references Machiavelli as an early game theorist which offers some computationally short insights.

In Machiavelli’s time perhaps, as viewed from ours, it was common for the church to assert and enforce that a certain style of thinking and content was blasphemous.

This implies the general public would only consider part of their available strategy sets of responses whereas Machiavelli was using the full set of considerations-he was thinking from an otherwise forbidden perspective.

Nash formalized this type of thinking such that it is reasonable to use Machiavelli as an example of the math he put forth to represent his equilibrium insight (citation Nash).

Our simple observation here is that while the Bitcoin and gold maximalists would have people believe that it is the “Keynesians” and the “fiat money printers” that are to fear. These are actually just constructions meant to hide the fact that these people meant to enact the very fate that Hayek means to save us from.

To bring Machiavelli with us then, we ask of Satoshi, tell your people let us consider the forbidden considerations as to how:

Central Banks will exist to compete with Bitcoin

And So Satoshi commanded to his people:

Everyone shall consider how central banks will exist to compete with Bitcoin

On the Machiavelli View or the Szabonian Deconstruction or Our Construction of Maximalists as Inflationists In Disguise as Free-Banking Proponents

Consider a different view of the maximalist, or the proponent of Bitcoin that means to wrap Hayek in the monopoly of competition of competing currencies.

A view in which up until now criminals and tax evaders alike have been sybil attacking the internet with implicit collusion.

Now consider the archetype of economic philosopher Hayek points to-the inflationist:

. . . Another curious source of opposition, at least once they had discovered that the effects of 'free banking' would be exactly the opposite of those they expected, would be all the numerous cranks who had advocated 'free banking' from inflationist motives.! Once the public had an alternative, it would become impossible to induce it to hold cheap money, and the desire to get rid of currency that threatened to depreciate would indeed rapidly turn it into a dwindling money. The inflationists would protest because in the end only very 'hard' money would remain. Money is the one thing competition would not make cheap, because its attractiveness rests on it preserving its 'dearness'.

Notice how maximalists have nefariously disguised their arguments as exactly what they are not. “We hate inflation they say” and so badly that they beg for a global hyperinflation of all central bank currencies to non-existence:

inflation{!inflation}

'It’s a necessary pain to suffer through', they will say. Neo-marxists (a construction on Marx we apologize for)!

Notice rather how Hayek references the gold standard as a CHECK on inflationist theory:

Even during relatively stable periods the regular necessity for central banks to accommodate the financial 'needs' of government by keeping interest rates low has been a constant embarrassment: it has interfered with the banks' efforts to secure stability and has given their policies an inflationist bias that was usually checked only belatedly by the mechanism of the gold standard.

Saifedean’s slithering smile lights up. He thinks the readers are fooled. But wait...

How is it that the inflationists were checked by the gold standard?

Because inflationary money is shit and gold is good, sound, and hard money Saifedean will say. It has all the properties of good money. Just ask Hayek Saifedean will say because that’s who Saifedean's argument cites.

But HOW? How does the gold standard check the inflationist?

Because in the gold standard, the gold standard Hayek is referring, to gold equilibrates the ducat ratio!

Saifedean isn’t smiling now. Because we have reduced the distance of complexity for the important readers. The sincere one’s.

Therefore we have shown that an argument that Bitcoin can, should, and will cause a ‘hyperBitcoinization’ event is actually THE MOST EXTREME inflationist argument one could have. That by Hayek’s framework and any responsible understanding of economics, a global hyperinflation event could only signal an armageddon level event.

Here then we have deconstructed the nefarious intention of Daniel Krawisz:

HyperBitcoinization will probably be a confusing time for everyone, like a second adolescence

It is rather his soggy adolescent dream that everyone be so confused. Let us undo the damage he has done.

And so we complain to Satoshi that his followers are inflationists in disguise and he commands:

Bitcoin shall protect the world from inflationists and the harm they mean to cause.

And so Bitcoin protected the world from inflation.

Of Saifedean the Denationalization of Hayek

Remember in Saifedean’s system that cites and claims to extend hayek Saifedean declared:

A theoretically ideal money would be one whose supply is fixed, meaning nobody could produce more of it.

This is in direct contrast to Hayek’s work and argument. It's in perfect contrast to the idea of the most embarrassing development being a rapid growth of demand that’s satiated by the creation of a new and its new money:

The most embarrassing development might be a rapid growth of demand beyond the limits a private institution likes to handle. But we can be fairly sure that, in the event of such success, new competition would soon relieve a bank of this anxiety.

Saifedean is playing by the rules of the quantity theory of money. That's how he’s tricking his audience. And he certainly know’s hes doing this, it's how he’s convincing people to give them their wealth.

Consider how he would twist this statement by Hayek to make it seems like Hayek isn’t reference to Saifedean

The inflationists would protest because in the end only very 'hard' money would remain.

Saifedean will tell you that its BITCOIN that is the hard money, and that it will be the only money that will remain.

But the truth is that Hayek is saying that only ducatH stable money will remain. He’s not saying only 1 currency will remain. That would be a horrible perversion of Hayek’s arguments that leads on the terrible road he warns us of.

Only ducatH money will remain. And so whether it is private banks from free-banking, Bitcoin, alt-crypto currencies, national and international currencies and any other currencies as they all fit under Satoshi's protection of the axiom of competing currencies.

And all of those currencies that were survived only because they had ducatH stability, because of all them had trustworthy issuers that properly managed the supply demand ratio of their issuances would be called HARD money by Hayek’s account and by all Hayekians, all Miseans, all those from the Austrian schools of economic philosophy, and all Saifedeanians and secretly Saifedean.

And thus now we understand Hayek is pointing to Saifedean and the Maximalist as inflationists and that all of the coins they call shit are what Hayek says will become hard money and so we hear him say of them:

The inflationists would protest because in the end only very 'hard' money would remain.

And somehow we are supposed to believe that Saifedean respects and is studied in Hayek and economics and yet his response to us about the problem with framing Bitcoin from a quantity theory perspective we found early would be (from his book):

What matters in money is its purchasing power, not its quantity, and as such, any quantity of money is enough to fulfil the monetary functions, as long as it is divisible and groupable enough to satisfy holders' transaction and storage needs. Any quantity of economic transactions could be supported by a money supply of any size as long as the units are divisible enough.

How is Saifedean able to straight-face says he is extending and citing Hayek when Hayek most perfectly disagrees completely:

It may be that, with free competition between different kinds of money, gold coins might at first prove to be the most popular. But this very fact, the increasing demand for gold, would probably lead to such a rise (and perhaps also violent fluctua- [130] tions) of the price of gold that, though it might still be widely used for hoarding, it would soon cease to be convenient as the unit for business transactions and accounting. There should certainly be the same freedom for its use, but I should not expect this to lead to its victory over other forms of privately issued money, the demand for which rested on its quantity being successfully regulated so as to keep its purchasing power constant.

To bury point and Saifedean further:

The very same fact which at present makes gold more trusted than government-controlled paper money, namely that its total quantity cannot be manipulated at will in the service of political aims, would in the long run rnake it appear inferior to token money used by competing institutions whose business rested on successfully so regulating the quantity of their issues as to keep the value of the units approximately constant

And this is where in history he earned his reference to the snake-Snaikedean. And he doesn’t care. He’s mad with power. He tells people he cares about Gaza but he knows his economic philosophy hurts the world by Hayek’s account.

He deserves the Gazian that others unjustly suffer but rather he eats expensive steaks and tells his followers its holy to do so.

The Re-Solution of the DucatH and Nash’s Conceptual ICPI and Saifedean’s Willingness to Convince Unsuspecting People to Learn to Give Him Their Savings

Saifedean, when confronted with his inconsistencies, once said of John Nash’s proposal Ideal Money:

Exactly. It's just another centrally planned currency, based on ridiculous price stability index measurements. And he's extremely naive to imagine it can be done internationally apolitically. It's far closer to an international CBDC than Bitcoin.

However, consider Nash said of Hayek that their works were 'apparently quite parallel':

Subsequent to that time, after consulting with some of the economics faculty at Princeton, I learned of the work and publications of Friedrich von Hayek. I must say that my thinking is apparently quite parallel to his thinking in relation to money and particularly with regard to the non-typical viewpoint in relation to the functions of the authorities which in recent times have been the sources of currencies (earlier “coinage”).)

The truth can’t be more the opposite of Saifedean's accusations. Consider the value proposition of Hayek’s ducatH and how its means to be tied to a continuously re-selected basket of commodity and then later simply commodity prices:

Constant but not fixed value

It might be expedient that the issuing institution should from the outset announce precisely the collection of commodities in terms of which it would aim to keep the value of the 'ducat' constant. But it would be neither necessary nor desirable that it tie itself legally to a particular standard. Experience of the response of the public to competing offers would gradually show which combination of commodities constituted the most desired standard at any time and place. Changes in the importance of the commodities, the volume in which they were traded, and the relative stability or sensitivity of their prices (especially the degree to which they were determined competitively or not) might suggest alterations to make the currency more popular. On the whole I would expect that, for reasons to be explained later (Section XIII), a collection of raw material prices, such as has been suggested as the basis of a commodity reserve standard,l would seem most appropriate, both from the point of view of the issuing bank and from that of the effects of the stability of the economic process as a whole.

This will cease to seem shocking when we remember that this is precisely what practically all central banks have been doing for nearly half a century-their notes were of course redeemable in precisely nothing.

Of course we have already explained that the ducat was a metaphorical device to aid Hayek and his readers in their inquiry. Should we then say that Hayek is as ridiculous as Saifedean claims that Nash is considering Saifedean's reference to Nash is of the same metaphorical device Hayek employes:

The concept I developed of "Ideal Money" became, in my view of it, sufficiently advanced when I conceived of a practical basis for a standardization of the comparison of the value of a currency with an appropriate standard or ideal. And the key to that was the idea of an ICPI or (international) "Industrial Consumption Price Index".

Saifedean’s lies become problematic when you put Nash’s proposal side by side with Hayek’s because, as it is our ultimate argument of his works, that their proposals have zero complexity difference between them. It’s as if they are the same author, writing about the same subject, and from the same vantage point.

It’s impossible to cite one and call the other ridiculous and have a consistent thought system.

And in case anyone is worried that Saifedean might turn a 180 and say he was wrong and now agrees with Nash and the REAL Hayek (rather than the twisted version Saifedean paints over it) they can be reminded that Saifedean’s entire system has wrapped the ACTUAL arguments of Nash and Hayek as the concepts of ‘shit’ and he told everyone the argument Nash and Hayek share is rediculous and blasphemous.

We remind the reader that Saifedean’s profits from selling the idea he is the high priest of this order of knowledge, of how to give your shit money (cause you don’t want shit money) to him in exchange for this special knowledge, and that at first chance he probably goes straight to the bank for fiat loans. He will say ‘Yes but they are ‘shit’ loans that I use to buy Bitcoin. And his followers will be left wondering why Saifedean functions like the central bank he says are whorehouses.

There is scarce a quote in Hayek’s book, nor Saifedean’s, nor Nash’s work, that doesn’t scream Saifedean is a snake oil salesman.

Hayek On Jeffery Tuckers Construction of Mises On Mises Regression Theorem

In an earlier essay we deconstruct some attempts to re-solve the inconsistency the existence of Bitcoin indeed posed to Mises regression theorem argument. Although we thoroughly deconstructed our attempts, we can also mention that Hayek absolutely does not agree with Tucker’s assertion that Bitcoin doesn't violate the theorem because, as Tucker puts it, ‘Bitcoin is both a payment system and a money.’

That a ‘payment system’ could be the use-case to re-solve the inconsistency is clearly not satisfactory to Hayek:

This definition was established by Carl Menger [43], whose work also ought to have finally disposed of the medieval conception that money, or the value of money, was a creation of the state. Vissering [61], p. 9, reports that in early times the Chinese expressed their notions of money by a term meaning literally 'current merchandise'. The now more widely used expression that money is the most liquid asset comes, of course (as Carlile [8] pointed out as early as 190I), to the same thing. To serve as a widely accepted medium of exchange is the only function which an object must perform to qualify as money, though a generally accepted medium of exchange will generally acquire also the further functions of unit of account, store of value, standard of deferred payment, etc. The definition of money as 'means of payment' is, however, purely circular, since this concept presupposed debts incurred in terms ofmoney. Cf. L. v. Mises [45], pp. 34 if.

On Saifedean as the Priest of the Great Inflationists

It will come as a shock only at first to the few sincere Bitcoiners that exist (compared to the sybil attack of apparently different but only with shallow distance complexity) that Saifedeanian's and hyperbitcoinization supporters are themselves inflationists in disguise by Hayek’s definition.

These wolves in sheep's clothing beg for the day of global mass hyperinflation, or some of them call for the slow onset of it, a slow death to the otherwise competing (ducat, because central banked currencies have the property of ducat management) currencies.

Saifedean will say ‘we hate inflation’. As his disguise. And then he will teach you to adore inflation.

He will tell you that Jal is the twister of truth, but ALL OF THE HAYEKIANS AND AUSTRIANS WILL BACK UP JAL. Because they will lose their reputations in the new world if they lie.

On Saifedean and Other Nefarious Systems that Trick Their Audience Into Confusing The Quantity Theory of Money With the Subjective Theory of Value

Consider this paragraph again and Hayek’s example of the need to increase the money supply :

As regards Professor Friedman's proposal of a legal limit on the rate at which a monopolistic issuer of money was to be allowed to increase the quantity in circulation, I can only say that I would not like to see what would happen if under such a provision it ever became known that the amount of cash in circulation was approaching the upper limit and that therefore a need for increased liquidity could not be met.

How does a Bitcoin only world serve this problem?

Saifedean will trick you and tell you that Hayek calls for sound and hard money, and that the benefits of getting rich outweigh the problems of a finitely supplied currency.

It seems only for Saifedean there would be no problems if only you would give him your shit money to learn the truth or learn the truth to give him your shit money.

But furthermore listen to Saifedean explain, based on citing Hayek, how money works:

What matters in money is its purchasing power, not its quantity, and as such, any quantity of money is enough to fulfill the monetary functions, as long as it is divisible and groupable enough to satisfy holders' transaction and storage needs. Any quantity of economic transactions could be supported by a money supply of any size as long as the units are divisible enough.

It is VERY clear in Hayek’s argument that multiple elastically supplied currencies are critical. Shouldn’t it seem odd that after citing Hayek as general inspiration that at EVERY turn Saifedean seems to have craftily RE-EXPLAINED Hayek in a way that is EXACTLY the opposite to the original argument and puts Saifedean in the advisory position to the framework?

We put the question earlier, does Saifedean not understand what he’s done? And we say again if not a professor of economics, then of what? Certainly not of logic.

However, it's obviously identifiably worse than that, he has a very clear proof-of-work track record of craftily concocting this argument. It’s not possible to say he didn't know the nefarious nature of what he's done without saying that he has no proper expertise in his field.

Not to mention how suspicious it is that he has a very dense argument with zero distance complexity from the argument of a profile known as ‘planB’. It seems highly likely that planB is Saifedean's planB and a few other inflationists trying to capitalize on the ignorance of others.

Those that served as beacon’s for these two accounts and their arguments should be thus scrutinized.

Bitcoin in Place of Ducats With “Privacy” Baked Into the Base Layer

With Satoshi already declaring the axiom of competing currencies and Hayek’s clearly stated intention of the need for the existence of multiple currencies (and not at all an argument that they will coalesce into one we can ask about the concept of different types of money that could arise as layers that could arise on ducat money in a Hayekian landscape.

This is an analogue that ports well to Bitcoin. Notice that privacy on the base layer creates problem of forgery:

Clearly not all banks would wish to issue, or probably could issue, a currency of their own. Those that did not would have no choice but to accept deposits and grant credits in terms of some other currency, and would prefer to do so in the best currency available. Nor would the original issuer wish altogether to prevent this, although he might dislike the issue of notes more than the mere running of accounts subject to cheque in terms of his currency. Notes issued by a secondary issuer would, of course, have to show clearly that they were not the original ducats issued by the bank that owned that trade mark, but merely claims for ducats, since otherwise they would simply be a forgery.

The Bitcoin maximalist, that is really an inflationist, will tell you that the evil banks will take your money if there isn’t privacy. Really its criminals, tax evaders, and those that would exploit privacy to benefit from their own induced inflationary schemes, that means to tell you that its the government that will take your money.

They will trade you any scam they can for your government ‘shit’ money which they are obsessed with and can never get enough of.