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A month ago I heard folks talking online about a virtual currency called bitcoin that is untraceable and un-hackable. Folks were using it to buy and sell drugs online, support content they liked and worst of all -- gasp! -- play poker. Bitcoin is a P2P currency that could topple governments, destabilize economies and create uncontrollable global bazaars for contraband.
Originally posted by imasecretspy
reply to post by wayouttheredude
Can you buy food with it? Or pay your mortage? Or your electric bill?
If you can't use it to buy the necessities, then what good is it?
In a sense, you could say that Bitcoin is "backed up" by the price tags of merchants – a price tag is a promise to exchange goods for a specified amount of currency.
Perhaps the point is that currency, the medium of exchange between two or more parties, need not be 'controlled' by a superseding third-party....
...Money serves as a transmitter of value through time because certain goods serve as media of exchange. Money transmits value, Mises taught, but money does not measure value. This distinction is fundamental in Mises's theory of money. Mises was adamant: there is no measure of economic value.
Mises said that every economic act involves a comparison of values A person chooses among several commodities (p. 38). He exchanges one commodity for another. "For this reason it has been said that every economic act may be regarded as a kind of exchange...."
Nevertheless, the exchange is not based on someone's measure of value, merely his comparison of value: more vs. less.
This means that "There is no such thing as abstract value" (p. 47). There are only specific acts of valuation....
Subjective value is not measured, but graded. The problem of the measurement of objective use-value is not an economic problem at all" I emphasize this because we hear, over and over, such phrases as this:
"There is nothing more important that the government can provide individual producers than a reliable standard of value, a unit of account that retains its constancy as a measuring device."
This statement is completely contrary to Mises's theory of subjective economic value, on which his theory of money rests. It is contrary to Mises's theory of civil government. It is contrary to the concept of free market money, as Mises described it. In short, it is contrary to Misesian economics.
Mises on Money: www.lewrockwell.com...