Note #6
I’m wrapped up in a dream, and that dream is you
— The Clovers, Wrapped Up In A Dream
Bitcoin is an experiment in Austrianism
— Nick Land, Crypto-Current, §3.1
Arise, you have nothing to lose but your barbed wire fences!
— Timothy C. May, The Crypto Anarchist Manifesto
A superior service is built into Bitcoin.
— Pierre Rochard, Fractional Reserve Banking is Obsolete
We should not be afraid of deflation. We should love it as much as our liberties.
— Jörg Guido Hülsmann, Deflation and Liberty
On Bitcoin
Bitcoin is truly amazing. In all its might, it may be the only system that seems to be able to have its monetary base grow without incurring a single bit of inflation:
As the monetary base increases, the deflation rate increases and the inflation rate approaches 0% in the form of an exponential curve. This is necessarily a good thing. Following Jörg Guido Hülsmann in his book Deflation & Liberty, we can recognize that “[a] paper money system is not beneficial from an overall point of view” (6). Moving to a Bitcoin-based system would lead to mass deflation, but that “[i]t is not true that [a deflationary spiral] would be bottomless and wipe out the economy” is a needed note (7).
Once we understand that price and value are not synonymous, we realize that Bitcoin is the only hard currency:
Contrary to Keynes, hoarding isn’t a bad thing which is to say having idle resources within the crypto-economy isn’t bad. Hoarding only leads to a higher price of Bitcoin and therefore makes mining more profitable, leading to a higher total hashing power. Viewed in its totality, Rochard and Bingledack recognize that Bitcoin is itself a positive feedback loop:
The genealogy of Bitcoin is extremely Austrian. At its roots are Carl Menger’s On the Origins of Money, Ludwig von Mises’ Human Action and The Theory of Money and Credit, Murray N. Rothbard’s What Has Government Done to Our Money? and The Mystery of Banking, and Friedrich A. Hayek’s Denationalisation of Money.
On Literature
Literature and the Economics of Liberty is a real treat. Literature is usually something analyzed exclusively by the Left. This isn’t odd in that cultural studies is something done predominately by leftists within the academy, but it is saddening because literature (and this largely stems from my ever-present connection with Georges Bataille) is very close to me.
Notes
[0]: Because this note isn’t quick, I am, from hereon, removing “quick” from my Notes series.
