Understanding Austrian Economics & How It Has Inspired Blockchain Technology
Austrian Economists are often the harshest critics of central banking systems. Cryptocurrencies present a risk to the world-wide system which controls the production of our money. Even the anonymous creator of Bitcoin 'Satoshi Nakamoto' was a supporter of Austrian economics.
The US government always tries to make an examples of people who try and make their own money. One prime example is the producer of Liberty Dollars (precious metal coins that are inter-exchangeable for commodities) who was sentenced to 15 years in jail in the guise that he was a "domestic terrorist".
The Two Economic Groups
Most people in this world fall into two economic groups. Group one are often called "radical free-marketeers" who believe the world should be privatized and have minimal government intervention. These people all have mindsets that were all inspired by free-market economists.
Notable names from this group are Ludwig von Mises, Henry Hazlitt, F.A. Hayek and Murray N. Rothbard. These men are referred to as members of the "Austrian School of Economics".
The second group comprises of everyone who is in disagreement with group one. These people believe that the government and large public sectors of bureaucracies are good. These public sectors include public education and government managed elderly care.
Cryptocurrencies like Bitcoin and Steem are inadvertently teaching millions the ethics of the Austrian School of Economics and giving everyday, normal people the chance to practice radical free-market perspectives.
Austrian Economic's Most Important Basic Concept
Through learning one economic concept radical free-marketeers can have a chance to transform our planet's economic system.
This is the lesson we all need to learn: Healthcare, housing, food, education, etc keeps going up in value because the central banks are constantly creating money.
Still can't quite grasp the concept? Let's use an example...
A small island with a mere population of 10 people and each person has $10 would equal a total economic value of $100 on the island. Can someone sell a product for $150? Of course not, even if everyone on the island worked together there would never be enough to make the transaction.
But if the supply of money increased it would be a different story. The only factor needed for prices to rise is more money and central banks are the only entities legally allowed to do this.
The Above Lesson Reveals The Problem With Today's Economy
Such a simple lesson yet economically uninformed individuals learn two horrid facts about the world's economic situation through this.
Firstly, it exposes how rising inflation is due to increases in supply of money. Secondly, the blame for this inflation is pitted on the central banks.
Inflation is a monetary phenomenon. It is made by or stopped by the central bank. LINK
The Gold Standard & It's Relation To Cryptocurrencies
With a gold standard, an increase in supply of money is a more complex process rather than simply letting a centralized authority figure add a zero at the end of a figure. When gold standard was still in effect, governments could not inflate and create additional money out of thin air.
In the same way that the supply of gold cannot be manipulated, the supply of Cryptocurrencies like Bitcoin cannot be increased by economically clueless bureaucracies.
This is a shift in paradigm that thousands of people across the world are learning every day. This is what Austrian Economic teachers have been trying to tell us for years.
I Love How The World Is At The Epicenter Of A Free-Market Revolution!
What we have is a free-market viewpoint from the "Austrian School" being developed into the technologies of the future by way of ambitious computer programmers.
Bitcoin's anonymous creator Satoshi Nakamoto has mentioned Ludwig von Mises in his work. The second largest Cryptocurrency Ethereum, was created by Vitalik Buterin, who once mentioned "I thought Austrian economics was like the world”. Roger Ver of bitcoin.com had a life changing experience when he first learnt about free-market economics and the work of economists taught by the "Austrian School".
It is an exciting fight for freedom and financial independence from central banks which all of us have joined by either using Cryptocurrencies, owning precious metals or participating in a decentralized social media built upon a Blockchain called Steem
Sources: 1, 2, 3.
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Coins mentioned in post:
But bitcoin is mined from codes, from blocks so doing more mining can essentially increase the supply thus increase the prices. However I've always though that the more quantity you increase of an item the less worth it will be, but that doesn't happen with money does it.
Bitcoin has a limited supply which keeps the price up. U$D is constantly being created out of thin air inevitably. That is why increasing the dollars in circulation will put the price down and why increasing bitcoin's supply does not.
Hope you understand.