Comments by "JP 72" (@739jep) on "Ben Felix Talks Investing in Crypto, Revolutionary Tech, and Academic Research" video.

He has interviewed many experts in various fields related to cryptocurrencies and has looked at what academic research there is on the topic. Did he say something factually incorrect that you can verify? He said Bitcoin has its roots in libertarianism, anti regulation and anti government - while that isn’t synonymous with the Austrian school of economics it’s pretty darn close. So it can’t be this point you think he was wrong on. He certainly didn’t suggest it was a Keynesian idea. Regardless theres little concrete evidence what ideology the creator of Bitcoin subscribed to, be it Austrians economics or otherwise. This was discussed recently on his podcast by a technological historian. The Austrian school of economics is like any economic school of thought, it has good ideas and bad ideas and the usefulness of these ideas changes as economies change. The Austrian school itself is, for the most part, narrative and makes it’s arguments a priori - whereas Ben being a researcher cares what the empirical results tell us and that is what he came to talk about today.
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Gold was used as a unit of account and it was certainty not the first item to be used in this manner. Humans didn’t discover gold and decide to use it as money. Credit came first , and in early civilisations these were just recorded as obligations people had to one another (maybe not even recorded , only remembered) . It was only later when civilisations became more complex that humans developed ‘money’ as a way to measure the value of these obligations. Being defined as money in the constitution doesn’t mean anything in this conversation. The original constitution also treated people like property.
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Watch him calmly and rationally communicate the truth more like 😂
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It is true that the same can be done for credit cards , gold etc but I think that was the point. The same problems that exist for those forms of money exist for bitcoin, just in some other form. Bitcoin was proposed by some to be the solution to this problem in these countries that have unstable governments , but in reality it’s still possible for these authorities to control your use of btc and other crypto currencies , because they can control ports of entry and exit to the btc/crypto market. They can control whether vendors can accept it as payment , they can control the exchange of btc for the national currency that is required to pay taxes , you even need an isp to have access to the market so they have some influence there as well. Until there is a technological development to fix these problems I don’t think btc will be of much use to these kinds of nations in the long run.
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Market efficient is a model used to explain reality and using modern asset pricing models it actually explains reality quite well. It’s not perfectly efficient of course but nobody is saying that it is . Market efficiency isn’t an on/off switch , it’s a scale. To say that it’s inefficient is as uninformative as saying that it is efficient. It’s not like there 0 information present in prices is there? - what matters is how efficient is it and what it means for investors. Broadly speaking we consistently find in the data that investing ‘as if’ the market is efficient consistently outperforms investing strategies that attempt to systematically exploit inefficiencies. This is a pretty strong indicator that markets have a significant degree of efficiency.
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@gabrielleblanc353 you’re discussing something that has been proposed by a few financial economists. Prices are set by trading not by assets under mgmt - most of the daily trading volume is still made up by active investors , as the trading done with index funds is mostly within the fund and the net redemptions or purchases are the only thing that hits the active market. It also depends on what kind of information is leaving the active space. If more uninformed investors are leaving active share and becoming passive they’re even a chance markets become more efficient (at least in terms of how accurately shares are priced to intrinsic value) You’ll always run into the grossman stiglitz paradox when talking about this concept (another collab done by these two) - that is if less price discovery starts to occur and prices become more inefficient then this should attract active investors back to the market to take advantage of the inefficiencies , making the markets more efficient yet again. There’s always going to be some level of inefficiency to entice active investors to contribute to price discovery , but can the average investor profit from this ? It doesn’t appear so.
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Well put , that’s been my experience as well. They also tend to subscribe quite passionately to the Austrian school of economics. I can’t tell which is the chicken and which is the egg though. Obviously Austrian economics is older , but it seemed to get re popularised since btc was invented.
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I think the credit theory of money proposes that money itself is credit , and the units of account that we use to measure and record credit , and transport it through time are ‘currencies’. Problems may arise if you use ‘commodities’ as a unit of account for something that isn’t itself a commodity , but credit. Just my thoughts , probably a better explanation out there - it’s a tricky thing to define 🤷‍♂️
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@venusrise it’s not a pointless fact , but being used for a really long time doesn’t mean it has a place in a modern economy. If anything is short sighted it’s that. Things change. Economies are vastly different to even 100 years ago let alone 6000. There’s many good reasons we went off the gold standard. Slavery was also crucial to economies for thousands of years , but nobody is seriously arguing for slavery to be a viable means of supplying labour today. If how long something has been around matters then credit has been around far longer than gold and continues to this very day. Saying money is credit makes perfect sense using that reasoning. ‘Gold is money.’ Only if we arbitrarily choose it to be used as money, there’s no outright physical or economic law that makes gold money. Money could be anything. The true value is in the goods and services that are exchanged.
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@venusrise gold can be debased and has been as well - it’s not different to fiat currency in that sense. It has held its value in the long term , but in the short term it’s been volatile and not a great inflation hedge for individual savers and investors (citing ‘the golden dilemma’ by erb and Harvey) . What do you mean by working? While I concede there are advantages to gold over other forms of money , there are plenty of disadvantages. In what sense did gold work better than fiat currency? Every developed economy in the world didn’t leave the gold standard for no reason. Sure one ounce of gold may have held its value in relation to one dollar note , but it’s not like people are less wealthy now than they were during the gold standard. Incomes and wealth can and have risen faster than prices. Could we return to a gold standard now that the world economy is so financialised , exchange rates are floated and would individuals be willing to suffer periods of high unemployment for the sake of a stable monetary supply. A stable money supply doesn’t guarantee no inflation by the way , purchasing power can still be eroded.
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@venusrise I agree that too much debt is a potential problem , especially fiscal debt. I’m not sure it can be claimed people are less wealthy , you said yourself that asset prices have increased. People are certainly way better off these days compared to even just 100 years ago. We could probably agree however that wealth distribution has become less equal however. As you pointed out , assets such as homes have priced a lot of people out of the market , and raising asset prices only increase wealth for those who hold assets. I’m not saying we should print money endlessly , there should be constraints - and there is.
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@jasonmaguire7552 my comments were regarding slavery’s role in earlier economies. It wasn’t a comment on the morality of slavery or colonisation , just acknowledging that it happened and likely played a large role in economic growth. Economic growth isn’t the most important objective humans should be pursuing.
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They’re using ‘random’ in the sense that it’s difficult to predict these events BEFORE the price adjusts to reflect this new information. Theyre not suggesting prices move independently to events such as the ones you listed. They’re saying prices reflect known information already - and that future prices will adjust to unknown future information - which occurs randomly.
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@xRichy68 Austrians economics is merely another school of economic thought , it proposes an explanation but it’s purely narrative , there’s no way of demonstrating the truth of their claims if it can’t be verified with experiment and data. Now admittedly this is a major problem with economics in general , but truthfully just because a school of economic thought proposes an explanation that makes logical sense , even one that maybe seemed to work in the past (although that’s debatable) it doesn’t mean it works in reality and it especially doesn’t mean it works in todays modern economy which differs highly from even how economies functioned 50-100 years ago. That said , Austrian economics thoughts on the monetary system are not widely shared by most economists. Id be careful basing my own ideas about money around Austrian teachings. Many bitcoin fans tend to become fans of Austrian economics simply because they think jt confirms their dearly held ideologies. Forgive me , but you don’t seem to be given the hosts the fairest interpretation of what they’re saying. The one flaw in what was said that you identified wasn’t even what they said. They havnt confused exchanges with the network, they’re identifying ways in which a decentralised network can become centralised - and one way is by controlling the ports of entry. This has happened a multitude of times throughout history (think telecommunications , private money , energy etc). One way to do this is controlling the exchange or btc into fiat currency , another is by regulating isps , large parties can gain controlling interests in the underlying assets , control of nodes , concentration of mining etc etc etc. True they are not talking about the network itself but those issues are highly relevant. This isn’t an obscure opinion either , it’s shared by many experts in multiple arenas including technological, data systems , regulatory , financial, economics and cryptography. Now none of this is to say that technology and policy implementation couldn’t develop solutions to these problems , but these are fair points to be raised currently. There may very well be many benefits to come from bitcoin and cryptocurrencies , but blindly worshiping it without acknowledging it’s flaws isn’t going to end well for policy makers , investors , consumers etc Perhaps we all need to learn more about bitcoin and cryptocurrency, including yourself.
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@xRichy68 your English is excellent! I understand your argument. And you have made some good points. These are concepts widely understood however , and because someone may be agaisnt bitcoin it doenst mean they don’t understand these points. They just disagree. Where we probably disagree the most is I don’t place much stock at all in Austrian economics as a whole. Which is fine , and hey maybe I’m wrong about the general legitimacy of Austrian economics. It certainly has some very useful ideas , but I think it’s limited , especially with its thoughts on monetary economics. Just my opinion. While I agree there are potential downsides to having a flexible money supply , there are certainly downsides to a fixed money supply as well , and I’m just not convinced that a fixed money supply would work in a modern economy which highly financialised , has floating exchange rates and a much lower tolerance for longer periods of unemployment. To even operate as money bitcoin has to get a lot more stable , it also needs wider acceptance for payment (something else that can be regulated) . Can this change / improve in the future? Certainly, but it’s a fair concern to raise now, a large shift in behaviour is needed before btc becomes stable enough to work as a currency. Those changes often don’t happen organically very quickly.
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@lukisz111 I guess I’m saying that what is physically used for exchange isn’t really what money is , it’s just the unit of account for what money is - and that is credit. In the earliest societies there were no barter systems or even metal forms of money - someone would provide a service and they would know that the person they provided the service to would owe them something in the future. Perhaps they recorded this on a clay tablet , or perhaps they merely remembered this because these societies were so small. Everyone has some form of debt to another person in the community. Every exchange of value between people involves debt , even if it’s only for a moment and it is cleared immediately. Even in a gold standard system of money people are exchanging goods and services , and at the point of exchange a debt is created - gold was just what was used to measure the value of that transaction and what was used to hold that value through time until the debt could be paid. ‘…but isn’t that just loaned (delayed) barter?’ Yes and that’s kind of the point , the credit came first , the method of settling the credit comes second. Humans didn’t discover gold then decide to start exchanging it with each other , humans exchange goods and services of value and whenever they do an obligation arises. They then decide the best way to settle that obligation , but it was the obligation itself that has true intrinsic value , not whatever is being used to settle the debt. What we have used as ‘money’ has changed a lot through history but the presence of credit has always been there.
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@lukisz111 yes ok that’s maybe where I’m wrong , seems more like a argument about semantics at that stage The opposing idea would be that money is a commodity is it not? And that gold itself has intrinsic value? All I’m suggesting is that a credit arises , due to an exchange of something of value , before gold even enters the equation. The value of money is derived from a mutual agreement that it represents soemthing that can be used to settle credit , (even if it’s gold) , and that that something doesn’t have any real intrinsic value itself if it can’t be used to settle credit. The use of credit doesn’t exclude barter as a means of exchange , that is correct, it’s more that historians find little evidence that barter was ever actually used. That argument is one of history not philosophy.
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@lukisz111 I probably am , I wanna say I agree mostly with what you say. But I’ll just ask , why couldn’t you exchange credit? If you think of credit as an obligation to someone else , I can’t see any reason why it couldn’t be exchanged. I don’t see why debt couldn’t be settled with other debt. Money is just the tech that makes that easier and more efficient. And if debt could be settled by either debt or money, could you see why I’d draw a link between the two as if they’re at least very similar?
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@lukisz111 yeh ok I think I see where you’re coming from. Thanks for a good discussion , if anything maybe we can both agree that ‘what is money’ is an interesting question. All the best.
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You must not be aware of Ben’s podcast series. He’s has spent a lot of time on the subject, whether it involves reading academic research or interviewing experts within the field. I recommend checking it out. He has experts on who are pro bitcoin as well. Regardless , the origin of money isn’t the reason he is saying it might not beneficial to society.
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@martinlutherkingjr.5582 I’m merely pointing out that in this video the hosts are not claiming that crypto isn’t a benefit to society because money is/originated as credit. The point was just that many people, and this isn’t limited to bitcoin proponents , don’t have a good idea of what money is. Heck economists and philosophers have pondered over that question for thousands of years. Probably also should be noted that ‘not being a benefit to society’ is different to being harmful to society. Although there are areas of concern where bitcoin could be a direct harm to society. These range from issues of fraud to environmental challenges to dangers for investors (know your client type thing) to regulatory problems to economic issues related to having a decentralised monetary system. ‘Sometimes centralisation is a good thing.’ But I think the main idea is that crypto will not likely deliver on its proposed benefits to society. Reasons for this range from not being as censorship or centralised proof as people want it to be , the costs involved (both monetary and environmental) , how for the sake of decentralisation economies or scale and efficiency and security are sacrificed, it is highly volatile and not accepted as a method of payment at most vendors , the main use of crypto so far as been for speculation …. and there are many more considerations. None of this is to say , as they discuss in the podcast , that technology couldn’t find a solution to some of these problems. I’m probably doing the podcast series injustice , i have missed a couple episodes. Better to go and hear it straight from the horses mouth- they do have pro crypto discussions on there as well.
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