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Author Topic: A bitcoin basher  (Read 4732 times)
anarchoguitarist
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« on: August 30, 2013, 10:33:44 PM »

A man named Scott Cleland was recently interviewed on the Peter Schiff radio show.  Besides badmouthing Bradley Manning and Edward Snowden he also had some negative things to say about bitcoin.  Here is an article he wrote about bitcoin:

http://www.netcompetition.org/conflict-of-interest/the-bitcoinvirtual-currency-bubble-beware-of-the-alchemy-of-abundance-economics

He accuses bitcoin advocates of being “cyber-utopians” and compares bitcoin to a ponzi scheme.  He writes “The fatal flaw in this virtual currency bubble is that currency is just another open source app. Currency is no app. It’s legal tender. Legal tender is an organizing principle of commerce in all sovereign nations.”  And “Legal tender is required to settle debts and engage in legally enforceable contracts, two central functions essential to modern commerce.” And finally “It is important to note here that many free and open Internet cyber-utopians don’t want modern markets, trade and capitalism to work.”

I guess we should be thankful for legal tender laws for we wouldn’t be able to make any transactions or trade without the gov telling us what money is.  I’m sorry Mr. Cleland, you are the one who doesn’t want markets or trade to work.  People can figure out what commodities to use as money without social engineers like you dictating to us the terms of our own contracts.  After reading this article I came to the conclusion that Mr. Cleland doesn’t really understand what bitcoin is or how it works.  This doesn’t surprise me when it is coming from someone whose economic understanding of money can be summed up by the phrase “legal tender.”

After comparing bitcoin to various ponzi schemes he writes “In sum, these virtual currencies are very likely to end badly.”  It is laughable that someone who trusts in gov legal tender would accuse bitcoin of being a bubble currency.  The federal reserve has created every bubble that has occurred in my lifetime.  We will see what currencies will end badly.  Will free market money like gold and bitcoin end badly?  Or will legal tender like FRN’s that need to forced on the market by the power of a gun end badly?  I’ll go with free market money.
« Last Edit: August 30, 2013, 10:38:19 PM by anarchoguitarist » Logged
Seth King
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« Reply #1 on: August 30, 2013, 10:36:34 PM »

Fortunately, there is some cosmic justice to the universe. That guy is going to miss out on the investment opportunity of a lifetime.
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« Reply #2 on: August 30, 2013, 11:06:00 PM »

There was one guy on the blog not to long ago SmilingDave I think is what he called himself. In anycase he was arguing that Bitcoin wasn't money based on the regression "theorem"... He actually said that "when someone buys a pizza online with bitcoin nothing happens..."

It seems ridiculous to me to call Mises' regression reasoning a theorem. Theorem implies rigorous mathematical proof, and considering Mises' rejected mathematics as valid methodology for economics and created praxeology instead I think it's clear that said "theorem" has no backing in mathematics. It's a line of reasoning and pretty good for what it is, but it's no where near being a theorem.

It also seems to me to be the height of idiocy to say that nothing happens when someone buys a pizza with bitcoin. A pizza was made for starters...
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« Reply #3 on: August 31, 2013, 12:22:44 AM »

It seems ridiculous to me to call Mises' regression reasoning a theorem. Theorem implies rigorous mathematical proof, and considering Mises' rejected mathematics as valid methodology for economics and created praxeology instead I think it's clear that said "theorem" has no backing in mathematics. It's a line of reasoning and pretty good for what it is, but it's no where near being a theorem.

Hello MAM,

Merriam-Webster defines "theorem" as "1) a formula, proposition, or statement in mathematics or logic deduced or to be deduced from other formulas or propositions." Or "2) an idea accepted or proposed as a demonstrable truth often as a part of a general theory."

To be fair to Mises I would think his Regression Theorem surely qualifies as a theorem based on these definitions.  Just because theorems are used in mathematics doesn't mean they are based on mathematical formulas, they can be deduced from logical propositions.  Deduction from logical propositions is the basis of most, if not all, of Mises' economics.  But I think people who are using the regression theorem as some sort of proof that bitcoin can't be money are wrong for the following reasons:
1) Mises' Regression Theorem was proposed as an explanation of the way that money could have developed in the past.  I don't think Mises was trying to say that money could never come into existence by any other method in the future.
2) Mises could have been wrong on this issue.  Though I agree with most of Mises' economic theories I wouldn't accept everything he wrote as infallible.

So whether people want to believe it or not, bitcoin IS a medium of exchange.  If you buy a pizza with it, you will get a real pizza, not a "virtual" one.
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« Reply #4 on: August 31, 2013, 12:37:18 AM »

It seems ridiculous to me to call Mises' regression reasoning a theorem. Theorem implies rigorous mathematical proof, and considering Mises' rejected mathematics as valid methodology for economics and created praxeology instead I think it's clear that said "theorem" has no backing in mathematics. It's a line of reasoning and pretty good for what it is, but it's no where near being a theorem.

Hello MAM,

Merriam-Webster defines "theorem" as "1) a formula, proposition, or statement in mathematics or logic deduced or to be deduced from other formulas or propositions." Or "2) an idea accepted or proposed as a demonstrable truth often as a part of a general theory."

To be fair to Mises I would think his Regression Theorem surely qualifies as a theorem based on these definitions.  Just because theorems are used in mathematics doesn't mean they are based on mathematical formulas, they can be deduced from logical propositions.  Deduction from logical propositions is the basis of most, if not all, of Mises' economics.  But I think people who are using the regression theorem as some sort of proof that bitcoin can't be money are wrong for the following reasons:
1) Mises' Regression Theorem was proposed as an explanation of the way that money could have developed in the past.  I don't think Mises was trying to say that money could never come into existence by any other method in the future.
2) Mises could have been wrong on this issue.  Though I agree with most of Mises' economic theories I wouldn't accept everything he wrote as infallible.

So whether people want to believe it or not, bitcoin IS a medium of exchange.  If you buy a pizza with it, you will get a real pizza, not a "virtual" one.

I'm not even sure that Mises' "theorem" is an "accepted" or "demonstrable" truth. Menger's hypothesis which Mises based his reasoning on, is contested.
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anarchoguitarist
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« Reply #5 on: August 31, 2013, 12:54:00 AM »

I'm not even sure that Mises' "theorem" is an "accepted" or "demonstrable" truth.

Hello MAM

You are right that his theorem is not "accepted."  However, it is "proposed" as demonstrable by Mises.  That doesn't mean it is true, but it does mean that it is a theorem.  You can propose that it is wrong and then give propositions, statements and reasons why it is wrong.  Or you can show that his propositions supporting the theorem are incorrect.  Just claiming that it is not a theorem is not a good way to address his ideas in my opinion.
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« Reply #6 on: August 31, 2013, 12:57:29 AM »

I'm not even sure that Mises' "theorem" is an "accepted" or "demonstrable" truth.

Hello MAM

You are right that his theorem is not "accepted."  However, it is "proposed" as demonstrable by Mises.  That doesn't mean it is true, but it does mean that it is a theorem.  You can propose that it is wrong and then give propositions, statements and reasons why it is wrong.  Or you can show that his propositions supporting the theorem are incorrect.  Just claiming that it is not a theorem is not a good way to address his ideas in my opinion.

I don't think saying it's not a theorem refutes Mises even if I'm right and it's not a theorem. I've written a couple articles on the subject. http://dailyanarchist.com/author/Michael-Hendricks/

Peace be with you!
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"A stone is heavy and the sand is weighty but a fool's wrath is heavier than them both"-Tuek

"Knowledge is power, and it's light weight. The more you know the less you need."-Cody Lundin

"Hey... it's a haiku

Democracy is
Two Zombies and a Sheriff
Deciding on Lunch."-Davi Barker
MAM
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« Reply #7 on: August 31, 2013, 12:58:53 AM »

Better people than me have also written extensively on the subject.

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"A stone is heavy and the sand is weighty but a fool's wrath is heavier than them both"-Tuek

"Knowledge is power, and it's light weight. The more you know the less you need."-Cody Lundin

"Hey... it's a haiku

Democracy is
Two Zombies and a Sheriff
Deciding on Lunch."-Davi Barker
MAM
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« Reply #8 on: August 31, 2013, 01:04:32 AM »

Religious folk like to present their creation myth as competing "theories" to science. I don't think that makes it a theory.
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"A stone is heavy and the sand is weighty but a fool's wrath is heavier than them both"-Tuek

"Knowledge is power, and it's light weight. The more you know the less you need."-Cody Lundin

"Hey... it's a haiku

Democracy is
Two Zombies and a Sheriff
Deciding on Lunch."-Davi Barker
anarchoguitarist
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« Reply #9 on: August 31, 2013, 01:52:12 AM »

Hello MAM,

I just finished reading "Reconciling the Regression Theorem with Bitcoin."  I think it is well written and I agree with all the main points.  Another point that can be made in defense of bitcoin is to address the claim that bitcoin has no intrinsic value.  I think there is intrinsic value in a software program that can keep track of accounting transactions in a decentralized manner.  People pay money to have their accounts and information secured by 3rd parties all the time.  So to have a way to transmit value and record transactions in a secure manner without going through a central authority is very valuable.

Religious folk like to present their creation myth as competing "theories" to science. I don't think that makes it a theory.

I'm not sure what this has to do with the Regression Theorem but maybe this has more relevance:
"Some folk like to present their definition of the word theorem as competing "definitions" to the dictionary.  I don't think that makes it a definition."

Of course I'm just joking around friend.  But really do think that Mises' Regression Theorem is not an "idea proposed as a demonstrable truth?"

Again read these definitions and explain to me why the Regression Theorem is not a theorem:
1
: a formula, proposition, or statement in mathematics or logic deduced or to be deduced from other formulas or propositions
2
: an idea accepted or proposed as a demonstrable truth often as a part of a general theory : proposition <the theorem that the best defense is offense>

The dictionary says that the phrase "the best defense is offense" is an example of a theorem.  Are you still going to say that Mises' Regression Theorem is not?
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MAM
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« Reply #10 on: August 31, 2013, 01:06:50 PM »

Quote
Of course I'm just joking around friend.  But really do think that Mises' Regression Theorem is not an "idea proposed as a demonstrable truth?"

Oh I think it is an "idea proposed as a demonstrable truth" and by that definition it would be a theorem. I brought up the religious folk to give an example of why I don't think the format of the proposition matters. Intelligent Design is presented as an alternative to evolutionary theory and I think that the Regression Theorem is an economic analogue to intelligent design. I think calling it a theorem gives it more credibility than it's worth. But that's a personal position of mine. Over all though I like Mises.

Quote
I just finished reading "Reconciling the Regression Theorem with Bitcoin."  I think it is well written and I agree with all the main points.  Another point that can be made in defense of bitcoin is to address the claim that bitcoin has no intrinsic value.  I think there is intrinsic value in a software program that can keep track of accounting transactions in a decentralized manner.  People pay money to have their accounts and information secured by 3rd parties all the time.  So to have a way to transmit value and record transactions in a secure manner without going through a central authority is very valuable.

I'm glad you thought it was well written, and I'm glad you agree with it! I agree bitcoin has value, in that it's encrypted and peer to peer. I think alot of the issue comes from "intrinsic" value. If you read the other article about Objective Theories of Value, I talk about it there. There is no such thing as "intrinsic" value. All value is subjective.
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"A stone is heavy and the sand is weighty but a fool's wrath is heavier than them both"-Tuek

"Knowledge is power, and it's light weight. The more you know the less you need."-Cody Lundin

"Hey... it's a haiku

Democracy is
Two Zombies and a Sheriff
Deciding on Lunch."-Davi Barker
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