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The Economics Of Bitcoin – Doug Casey Gets It Wrong

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Casey is essentially making the claim that because Bitcoins have no uses outside of acting as a money, they are inherently worthless.  I have argued against this in previous articles and I will repeat myself here.  This is a fallacious argument.  To claim Bitcoins are nothing is like claiming your operating system is nothing, therefore it is worth nothing.  Clearly an inordinate amount of time and resources went into the development of your computer’s operating system.  The time and resources that went into the development of the software constitutes “something”, which is obviously more than nothing.  Software can have inherent properties that give it value in and of itself. In the case of Bitcoins, they are imbued with value by the free market because of the properties they have that allow them to act as a store of wealth and as a trade facilitator.  Those properties which allow Bitcoins to act in this specific capacity are exactly the same properties that gold has which allow gold to act as a store of wealth and as a trade facilitator.  Again, even if gold had absolutely no other uses besides sitting in bank vaults as ingots, gold would still be a money.

1 Comments in Response to

Comment by Ed Price
Entered on:

If you happen to know a little computer and Internet programming (not Bitcoin programming here), you can make the already very strong encryption of the secured sections of the Internet to be even stronger. It doesn't take much.

The point is, that without a whole lot of additional programming, Bitcoin can be made a bazillion times more secure than it already is. And then that security can be adapted to all kinds of things - emails, phone conversations, text messaging, etc. - so that almost nobody can know who is communicating and transacting with whom, if they so desire.

The technology to do this is here right now, and has been for a long time. There just hasn't really been a perceived need up until now.

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