Bitcoin’s uselessness as “money” predates its recent decline

Bitcoin will not everything replace public money. It’s worthless like money.

Importantly, his lack of utility has nothing to do with his recent decline. As this column has been saying for years, big increases in BTC are as indicting of fake currency as declines are.

The real money is quiet. And its quietness is a result of its stability as a measure of value.

Quick, when was the last time you talked about the amount of heat in a degree, the volume of liquid in a cup, and the length in an inch? Tick ​​tock, tick tock.

There would be no reason to. Degree, cup and inch are fixed measures report in heat, volume and length. Nothing more.

Really, imagine looking for a “stronger” or “weaker” degree, cup or inch. The very concept offends stupidity. Changing the measure in no way changes the reality.

Money is no different. It’s just a measure that it states. Which means changes to its value don’t change anything. All they do is corrupt the would-be measure, while making it less useful as a measure.

The surest sign that bitcoin will never be money can be found in what excited its supporters on the way up, along with its detractors on the way down. Who would exchange goods and services for something so turbulent?

Production buys production. When we bring goods, services and labor to market, we seek in return goods, services and labor of equal value. Money is simply the agreed measure of value used by producers to facilitate exchange.

That production always and everywhere buys production is what makes bitcoin the opposite of money. With his dollar count a concept at a time, his ability to arbitrate trades is anything but. With bitcoin, there will always be winners and losers in exchange which, by its very name, means only winners.

The good money is quiet again, while bitcoin’s volatility makes it loud. Except there’s more.

Bitcoin’s real problem is that it failed from the start, and its failure is rooted in the neo-Austrian and neo-monetarist mystique that “inflation” is the result of too much money, while lack of inflation is the result of a tightly controlled “supply” of money. No, that’s wrong. If you focus on the so-called “money supply” you are missing the point in the same way that BTC supporters have missed the point with their delight in occasional spikes in the coin’s value.

Implied in the Austrian and monetarist obsession with “supply” is money as the instigator of production. No, the money is result. Since we produce to takemoney is always where production is precisely because its circulation reflects production.

The above truth is completely lost on modern members of the Austrian and monetarist school. From the point of view that a reflection of production can and should be planned centrally, they claim to know what the quantity of the medium of exchange should be. Their arrogance is amazing.

Worse, they are convinced that monetary nirvana can be achieved if a central bank, or some pseudonymous character called Satoshi Nakamoto, severely limits the supply. No, it’s not serious.

In the control of the so-called “money supply” is implied the control of production. More realistically, the only limit for the circulating medium of exchange IT IS production. Which means that money circulates in larger or smaller amounts not because it is centrally planned through quantity theories, but because it has stability as a measure.

Bitcoin, with its fixed supply, indicts monetarist and Austrian theory more than anything else. And as bitcoin’s volatility attests, it’s a window into why neo-Austrians and monetarists are so hopelessly lost when it comes to money today.