Is Bitcoin Money?

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Efficiency-value emanates from a capitalist system’s capacity to produce goods and services without inbuilt limits.

There is an inherent contradiction to having an efficiency-economy run on a scarcity-based monetary system; history shows us that it usually ends up being deflationary.

John Maynards Keynes and Milton Friedman worked deeply on this topic

This contradiction was overcome by economists such as John Maynard Keynes, and later Milton Friedman, who developed new frameworks for economic management.

Friedman suggested abolishing the Federal Reserve...

...and replacing it with a computer that boosted the US monetary base by 3% a year. The business of setting interest rates—and so the multiplier applied to the monetary base—would be left to the market. Thus in a certain sense, the great monetary economist “invented” the Bitcoin.

This brings me to Bitcoin as a money substitute

In essence, this is just another attempt to create a scarcity-based monetary system.

The funny thing is that in recent years, the prices of both scarcity- and efficiency-assets have soared. Ironically, the action of central banks to boost efficiency assets—and so avoid a huge margin call on the banking system—has seemingly also pumped up Bitcoin prices.

Is Bitcoin money?

Between the efficiency-money of today and the production of goods and services sits an interface called the legal system.

This is ultimately based on citizens awarding the “monopoly of violence” to something called the state.