As I work here to organize and refine my own theoretical interpretations of Bitcoin, I try to keep searching and scanning for solid material that is already available, so as to minimize wheel-reinventing. Here are a couple of promising sources and intellectual resources I have identified so far as part of this process. Given the volume-to-quality ratio of talk out there right now, this can be a little more like digging for kryptonite than mining for mere gold or bitcoins.
First, wondering last weekend if Guido Hülsmann had written anything on Bitcoin thus far, I came across Jon Matonis citing Hülsmann’s “Deflation and Liberty” in an article on deflation and Bitcoin in Forbes, “Fear Not Deflation” (23 December 2012). “Deflation and Liberty” was a precursor to Hülsmann’s concise treatise, The Ethics of Money Production (2008).
Matonis’s Twitter feed soon led me to a discussion thread that contained a link to a late-2012 Diploma Thesis from the University of Vienna by Peter Šurda entitled Economics of Bitcoin: Is Bitcoin an alternative to fiat currencies and gold? [download 90-page PDF]. My first impression is that this contains significant solid information and analysis and I am looking forward to examining it. It looks like an in-depth work by somebody who combines a good grounding in economic theory with a solid understanding of what Bitcoin is, a rare blend.
I already recognized his name from various comment threads, but this discovery helps me understand one probable factor behind his comments standing out from the crowd in my eyes. One such comment thread is ongoing under the post Is Bitcoin Money? and Šurda is making what I think are some stellar observations in that conversation.
Just today, I watched the new half-hour interview between Jeffrey Tucker and Vijay Boyapati on Bitcoin and monetary theory (embedded below). I think it offers an informed discussion with a refreshing frequency of solid and balanced ideas and interpretations. It was interesting for me to note matches between some ideas in this interview and similar points in my recent initial foray into this topic, “Bitcoins, the regression theorem, and that curious but unthreatening empirical world” (27 February 2013).
First, I also came up with “used for economic calculation” as one of the interpretive indicators to look for on the question of whether bitcoins are “money” or not. The empirical question this implies is: To what extent are actors doing their planning, decision-making and profit/loss calculations using the unit directly, and to what extent are they referring back to local fiat currency exchange rates?
At the same time, this “Is it ‘money’?” issue seems to be of mixed explanatory importance. While “medium of exchange” is a precise concept, the word “money” tends to suffer from being more colloquial and susceptible to shifting and varied definitions of what is or is not to be included. Debates built on shifting or non-matching definitions do not end. The value of using the “money” word therefore varies greatly with the degree to which a specific definition is out and on the table, and its use should always be tested against whether or not it is actually advancing understanding.
Second, similar to Boyapati’s take here on the first emergence of bitcoin value, my article also traced back to “coolness factors,” etc., which I characterized as psychological, motivational, and sociological elements in initial valuations. Once again, dismissing such factors as “merely” imaginary or subjectively felt factors, and comparing everything back to gold, which is “inherently valuable” (!) may risk falling back toward or into an objective-value approach in the struggle to stuff the bitcoin genie into one old bottle or another.