Physical commodity basis is merely a historical datum, because (according to the Austrians at least) monetary transactions evolved from physical exchange of goods. This is not true anymore. Even if we somehow got rid of fiat and it was replaced by gold or a different physical commodity, the vast majority of transactions would be conducted with money substitutes. This leads to excessive control of the issuers of these substitutes over the economy (particularly if digital), FRB and so on. Purely virtual medium of exchange like Bitcoin does not suffer from this problem. Sure, there are lot of potential issues with it, but the potential benefits are enormous. If not Bitcoin, then eventually something similar will probably succeed.

That being said, ANYTHING that is voluntarily adopted as a medium of exchange and account, and as a store of value, can be considered money. I agree that the general “rule” of money is that it is always a commodity within that society first, and even in the case where individual productive businesses started issuing their own money, that money would be backed by their production (a market commodity).

I don’t think the future for bitcoin is bright, but there might be a place for it as we see fiat currencies start rolling over around the world and people try fleeing to alternatives. Also, remember that cooperation and emulation come before competition. If there is a great enough need for money in this digital age, someone at some time is going to come up with a way to introduce actual decentralized money that can be transferred across the world in seconds and is backed by a tangible asset, while being decentralized and out of the control of the nation-states of the world.

Bitcoin’s greatest strength is also its greatest weakness – you can’t put a commodity backing on it because there is no central holding facility or even a network of banks that can hold a commodity against it, but this also negates the worry that a violent state can just come along and appropriate all of the money for itself. It’s a catch-22 and I’m excited to see if the market can overcome this some way.

So the people listed by you have been making contradictory statements?

Correct.

Or is your point to ‘address’ their arguments with a vague reference to some information or argument that ‘may’ have come up in the video linked to in the article? (Didn’t hear it explicitly mentioned.)

Also. The people listed make the argument that goods (money in particular) must have “intrinsic value”. This is just something they made up, there is no basis for this in the books of Austrian authors.

Because from what I’ve read of Smiling Dave in the forums he’s pretty much straight out of Murphy and Rothbard on his take on the Regression Theorem. I see he’s even addressed how bitcoin works when taking the RT into account.

Smiling Dave (and Nielsio and Clayton) dodge debate whenever their fallacies are exposed. I spoke to about nine Austrian economists about the topic. Even though they do not share a common interpretation of the Regression Theorem among themselves, I do not think that any of them support the arguments in the form these Bitcoin detractors are making. There is no such thing as intrinsic value, nor are the physical characteristics of goods the only factor affecting value. That’s completely made up. If it was true, we would have no immaterial goods and no service sector. But these gentlemen know better. According to them, most of our economy simply does not exist.

Even if you did choose to buy a replacement stuffed friend for your little one, there was no guarantee that he’d accept it. I know when such a thing happened to me, I absolutely didn’t.

And that, folks, is the subjective theory of value in a nut shell.

Then your point is not well made.

My point is addressing the arguments made by the people I listed.

If we take ‘intrinsic’ value to mean that a majority of people subjectively value it to some extent,

The whole concept of “intrinsic value” is completely bogus.

… are you attempting to say that a good that noone or very few people subjectively value will establish the same market share as a good that everyone or almost all people subjectively value?

No. That would be an entirely different argument.

But who cares, right? There are some people out there who aren’t fawning over your pet social experiment, so obviously they cannot be ‘true austrians’.

I care about finding contradictions in arguments. I have been doing this within the topic of IP for several years now. Before that I was doing that about anarchocapitalism, and before that about libertarianism and before that about linux. Lately I became interested in Bitcoin. One day I’ll decide that my curiousity is satisfied and that the people I argue with are going to insist on making self-contradictory statements. Then I’ll move on to other interesting topics.

But who cares, right? There are some people out there who aren’t fawning over your pet social experiment, so obviously they cannot be ‘true austrians’.

Amen to that!! It’s amazing how many economic principles may be seen in action by just observing children closely. I was thinking about the same point observing my 4 year old daughter ever since she started talking.

One more point you can observe (which I suspect you or Robert Murphy have spoken about) is a child’s extremely high positive time preference. One of the biggest challenges I face is to get my daughter not to insist by saying “I want it NOW!!!!”. Another interesting observation I have made is the response to the offer “It’s either cartoons for 10 minutes now or cartoons for X minutes tomorrow”. It’s always “cartoons for 10 minutes now” irrespective of how big X is.

Thanks for bringing a smile to my face.