TD₿: Applying Carl Menger to the Monetization of Bitcoin by Rollo McFloogle
TL;DR Bitcoin will gradually emerge as a new monetary standard as it outcompetes all other monies due to its superior monetary traits.
Hey Bitcoiners,
The traditional definition of money is something that functions as a store of value, medium of exchange, and unit of account.
Most mainstream economists will point to Bitcoin and harp that it’s not money because it’s not yet widely used as a medium of exchange or unit of account today, therefore, it can’t be money.
Now you can’t really blame these guys because the world hasn’t witnessed a new market-driven monetary standard emerge in thousands of years. Having said that, their main blindspot here is that the process of monetization is an ongoing process.
In a free market, competition between monies never stops as individuals choose which money performs the function of money better than all the others due to its superior monetary properties. Over time, as adoption continues, the best money will gradually be used more as a medium of exchange and unit of account.
Although today’s economists struggle with this idea today, economists from all the way back in the 19th century like Carl Menger were well aware of this process of monetization.
Rollo McFloogle wrote this great article that applied Carl Menger’s thoughts on monetization to the current process we are seeing unfold in Bitcoin today (08/25/2019).
Today Bitcoin is still in the early store of value stage of its monetization process. As more market participants realize it’s the best money on the market, it will continue to grow into a medium of exchange and unit of account.
The people who realize this reality before everyone else will be handsomely rewarded.
Tick tock next block,
Cory Klippsten
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“Political money did not prove its superiority through a market process. What happened instead was a politically imposed change from a better system to a worse system.” - Robert Blumen, Software Engineer and Mises.org Contributor
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