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3w ago



-Bitcoin: commodity or currency?
-Bitcoin: store of value?
-Bitcoin: medium of exchange?
-Money's definition
-Currency's definition
-Bitcoin's marketability
-Money's social construction
Bitcoin: currency or commodity?

Bitcoin's Nature: Commodity, Currency, or Both? The speaker argues Bitcoin can be simultaneously a commodity (due to its decentralized production and liquid market) and a currency (as the most marketable commodity, aligning with Austrian economic theory). The distinction between currency and money is blurry, especially outside a gold standard; currency is viewed as a denomination of money, while money is the most widely accepted medium of exchange.

Commodity Definition and Bitcoin: The speaker defines a commodity as something produced by anyone and sold in a liquid market without central authority control, contrasting it with securities. This definition fits Bitcoin, unlike many "shitcoins" with centralized control over supply.

Marketability and Money Emergence: Austrian economists' theories on money's emergence emphasize marketability, linked to a low supply growth rate (stock-to-flow ratio). Bitcoin's low supply growth rate contributes to its marketability and potential as money. Mises and Menger's theories are criticized for omitting the importance of this supply growth rate.

Medium of Exchange vs. Store of Value: The speaker argues that a good store of value is inherently a good medium of exchange because its value preservation leads to larger cash balances, increasing its usability in transactions. Bitcoin's success hinges on its function as a store of value.

Money is Not a Social Construct: The speaker refutes the idea that money is a social construct or hallucination. Instead, money's function (as both a store of value and a medium of exchange) is tied to inherent properties, including a limited supply and resistance to inflation. This is compared to airplanes: a tomato cannot be an airplane even with social agreement, similarly, anything easily inflated cannot effectively function as money.
Bitcoin's Future: The speaker envisions Bitcoin becoming a widely accepted money, possibly with various denominations ("currencies") emerging on top of it. While some (like Michael Saylor) view it primarily as a store of value, the speaker sees its potential for broader use as a medium of exchange.

Political Implications: The speaker acknowledges the current dominance of fiat currencies and the potential for governments to influence definitions. However, they believe Bitcoin's inherent properties and decentralized nature will ultimately drive its adoption as money, regardless of official definitions or popular misconceptions.

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