339 sats \ 3 replies \ @Undisciplined 4 Oct 2023 \ parent \ on: Lyn Alden book club part I bitcoin
Bob Murphy had the best Austrian response to that Austrian hang up. Basically, he pointed out that it was moot to argue that Bitcoin violated the Regression Theorem, because the Regression Theorem is about how things become a medium of exchange and Bitcoin is already a medium of exchange.
What so many Austrians missed, is that the commodity value can originally be novelty, as was the case when buying those first two pizzas. Once that happened, the process of price formation was set in motion. It's incredibly ironic that Austrians missed that, since their whole thing is being dedicated to subjective utility theory.
I think Bill Luther made a similar argument? Though I can no longer find the article that I think I read of his (there are many others, though.)
I don't personally find the regression critiques compelling bc I had always viewed it from the grounding perspective, which is basically what you said Murphy said: you can ground anything in anything. It gets really interesting in btc's case where in the very earliest days its value was basically grounded in some combo of lulz, novelty, and rampant speculation. But that was enough to get it started. Now we see the very first sprouts of circularity, though honestly those effects are themselves grounded in those other thing, too.
The most interesting extension of this is the example Lyn gives of monetization of that magical item in that online game (the name escapes me now and I don't have the book in front of me -- anyone?) I think @k00b linked a book on virtual economies that probably has a similar energy, though I haven't read it.
And actually, this is why I thought the Brave token was interesting: grounding the value of that token directly in human attention. (Well, that's the theory. In practice it was speculation, on the short term at least.) It's an interesting philosophical example of monetization, but hard to find anyone who wants to talk about it in those terms.
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The most interesting extension of this is the example Lyn gives of monetization of that magical item in that online game
It was a rare (but not too rare) and universally useful ring in Diablo II. It had more favorable properties than the in game currency which the designers had tainted with conditional durability.
virtual economies
This book goes beyond in game currencies and explores how these currencies sometimes "escape the lab" and begin competing with sovereign currencies as was the case with QQ coin.
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The main point was that the Regression Theorem was never intended to be wielded as a criticism of an existing commodity. Rather, the point of it is to explain that monies were always grounded in something originally.
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