Why do I find bitcoin interesting? With that question I shall reopen a blog that has been silent for 5 years.
A few months ago, I stumbled several times about Bitcoin. On Twitter. On Podcasts (especially this one: The Immaculate Conception: Bitcoin vs Fiat Standard | Dr. Saifedean Ammous | The JBP Podcast S4: E58).
It got my interest. Then two curious things happened. Last week I had to hold a talk for an association I’m interested in. I chose “Are cryptocurrencies real currencies?” as a topic and went on to delivery 30 minutes of basics about currencies from an Austrian perspective and then an introduction to Bitcoin. It gathered positive feedback as well as an unexpected level of interactions. Then today I posted something on Twitter that received unexpected interest.
So today I’m writing down why I initially took interest. Maybe I’ll write more and this is the prequel to series. (Who knows, this blog has a tendency to go dormant everyone in a while…)
A while back as a student I had the privilege of having a great Economics Professor. He did his PhD about Friedrich von Hayek. Thanks to him, I then discovered Friedrich von Hayek and a few of his ideas, which really shaped me politically.
One of the ideas is, which should be the prerogative of the state? To put it shortly: defence, security, justice. Everything else should be in the realm of private endeavours.
Something you are not going to find in this list is: money.
I’m not going to discuss whether this list is “correct” or “good”. I’m just going to focus on the currency-aspect.
What does this mean to have a non state-currency (non fiat-currency)? To let the market decide which currency it should use?
We trust the market – the abstraction of many decisions of individuals – to decide many things: which companies make the best cars, insurance… But not for currency. No, for currency, it’s a given by the state.
Back when I was a student, I did find the idea interesting, to have freedom on currencies, but I thought it was only a thought experiment. How would having a non-fiat-currency look like? or having several? Should several bank mint their own coins?
As I just said, something purely theoretical.
…and then came Bitcoin. I may have missed the start for 13 years. But the more I learn about it, the more I think it fulfils the criteria of a sound money (a money which established itself in a market), and which is incorruptible (no one party exists which may change the parameter of the money).
I’m not going to discuss details as to why here, or which consequences or drawbacks it may have.
This is just the reason I originally found Bitcoin more than worthy of interest.