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Comment by mike_esspe | Hacker News Reader

Isn't emergence of bitcoin falsified regression theorem?

From "Human Action":

No good can be employed for the function of a medium of exchange which at the very beginning of its use for this purpose did not have exchange value on account of other employments. And all these statements implied in the regression theorem are enounced apodictically as implied in the apriorism of praxeology. It must happen this way. Nobody can ever succeed in construction a hypothetical case in which things were to occur in a different way.

https://mises.org/humanaction/chap17sec4.asp

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It sounds like there's nothing wrong here -

Bitcoin is (since its beginning) exchanged for something else at market rate (e.g. dollars), so that a more convenient transfer can be made later, and then exchanged back into something else (e.g. dollars). At no point did it have "no exchange value on account of other employments".

Right? It's the same way how physical money works. They were exchanged for goods (e.g. horses), so that a more convenient transfer can be made later, and then exchanged back into goods (e.g. horses).

It is more convenient than our existing currencies, and you should be able to see our existing currencies as being similar to "goods" like horses.

I beg to differ. I did have "no exchange value on account of other employments" at the time the very first BTC was mined, and I suspect quite a few months after that. The same cannot be said of paper money as from the moment of its inception and for many long years thereafter it was redeemable in gold, thus satisfying the regression theorem. Even today a tenuous link is still maintained as the gold reserves of every central bank factor, to a limited extend, in the assessment of a currency's health.

> The same cannot be said of paper money as from the moment of its inception and for many long years thereafter it was redeemable in gold

But since the dollars themselves had no inherent value, its value was derived simply from the cumulative belief that they could be redeemable by gold. I could even say that when the dollar was first created, the rest of the world was wary of it since it was so new.

I don't see how bitcoin is much different, except for the fact that a large organization (e.g. government) didn't state that it had value when it was first created, which is actually one of the strong points of bitcoin (a currency by the people for the people.)

The passage above should be clearly be understood as "No good can be employed _for the long run_ ...". Otherwise various local currencies that have risen and died over the years (e.g. "Ithaca hours") could also have been construed as counter-examples to the regression theorem.

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