At the Mises Blog Austrian economist Joseph Salerno brings about a very important insight on Bitcoin (bold mine)
Whether or not Bitcoin survives and whether gold returns to favor among investors and, eventually, to its traditional monetary role are, of course, purely empirical questions, which cannot be solved by theoretical arguments. At the moment both are valuable commodities and neither one can be considered as money. Thus, tedious arguments on the blogosphere which invoke Ludwig von Mises’s regression theorem, are completely irrelevant to the issue. Both items are scarce commodities which are valued by consumers and command a price on the market. As such, the regression theorem does not prevent bitcoin from being monetized or gold from being re-monetized in the event or anticipation of a fiat-money breakdown. Rather, it is a matter of human valuations and volition which are not determined by economic law. In this matter, our only guides are historical experience and what Mises called “thymological” insight into people’s likely choices under varying circumstances. Will the general public trust and routinely accept a commodity embodied in lines of computer code or a tangible commodity that has served for millennia as the general medium of exchange? Hmmm, I wonder.
Right. This is why I think debate on bitcoin is a waste of scarce time. What is needed is to simply observe Bitcoin’s progression via “matter of human valuations and volition” in the face of the ‘resistance to change’ obstacles.
Many governments have thrown the kitchen sink on bitcoin, such as charging bitcoin operators with money laundering, many governments issuing warning on bitcoin usage, if we can’t beat them join them—by calling for more regulations and etc. But this should be an expected reaction since bitcoin poses a challenge to government’s monopoly control of money.
On the other hand, bitcoin’s function as a settlement medium appears to be rapidly growing. There are now more than 10,000 merchants spanning 164 countries accepting bitcoin for transactions. Some high profile examples: Online shopping Overstock.com now accepts bitcoin. Bitcoin have been accepted by some Las Vegas casinos.
True while 10,000+ is a speck compared to millions of merchants in the global economy, again the question here is if “human valuation and volition” with regards to bitcoin usage will continue to spread.
The ballooning merchant acceptance appears to be complimented by reports of flourishing bitcoin ATMs
Vancouver Canada opened the world’s first bitcoin ATM in October 2013. Toronto Canada has also opened an ATM this year. Helsinki Finland has the “first permanent Bitcoin ATM installation in Europe”
New York will open its first ATM soon. Bitcoin ATMs are slated to open in Hong Kong, Singapore and Australia also this year.
And bitcoin ATM manufacturers have reportedly been rushing to take advantage of this growth momentum
In addition, there are 88 crytocurrencies in existence, 84 of which has market capitalizations. This means that bitcoin’s success has been drawing in many competitors. Such competition should extrapolate to more improvements on the quality of cryptocurrencies offered.
What the above dynamics suggest? For as long as the internet exists, and most importantly, for as long as people preferences will be expressed by actions in favor of cryptocurrenncies, then this means that cryptocurrencies, which represent as the evolving innovations from the deepening of the information age, are here to stay.
[Disclosure: I don’t have any exposure onbitcoin or other cyrptocurrencies yet, but I am contemplating to experiment with this sometime ahead]
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