Carl Menger, the origin of money and Bitcoin Cash

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Avatar for IanBlas
3 years ago

The natural evolutionary process of BCH to be money

Carl Menger was a Doctor of Austrian Law, and the theoretical founder of the Austrian School of Economics. Menger proposed a monetary theory praxeology where he shows that money does not arise from the State, but cooperation between individuals to give numerical value to our production and to be able to exchange it with that of others.

Before continuing, we must understand that all the attributes that money has come from because it is a first medium of exchange that arises naturally, without a centralized planning of a coordinated group. It is thanks to the fact that a currency is used as a medium of exchange that it is then a reserve value and unit of account. However, the characteristics of the currency itself may be favorable to it being a more widely used means of exchange than the rest.

For Menger, money is a social institution that takes shape as a present economic good that satisfies the need for liquidity derived from the need for interpersonal exchange.

Menger argued that a good must have certain characteristics to be money.

1- Prior non-monetary demand: it is that money must have a demand beyond its monetary use, since its non-monetary value is prior to monetary use.

2- Accessibility and liquidity: it must be possible to obtain that particular asset and also its obtaining and exploitation must not be legally restricted.

3- Scarce and limited: hard money (hard currency) that serves as a store of value is limited in certain amounts.

4- Stability of the value: before geographical, temporal or quantity changes. This means that the coin should not lose purchase value over time.

5- Ease of fractioning: to be used as a unit of account, it must be possible to depreciate it in homogeneous portions.

6- Treasury and safeguard: both with respect to the conservation of value over time and the possibility of depreciating a part without reduce the value of the remaining money.

Does Bitcoin Cash meet those requirements? Let's number one by one.

1- Yes, the regression value in #BitcoinCash is fulfilled, since it has its own payment network integrated in the currency, the qualities of #BCH to be a decentralized means of exchange, with direct payments between people is what gives it value Regressive to it.

2- The liquidity in BCH is very wide, in practically all countries there are local exchanges where you can buy BCH or local.bitcoin.com allows it in a P2P way without KYC. On the other hand, BCH mining is international, therefore all countries should prohibit it and persecute all the computers of the population to carry out such censorship, something impossible in practice.

3- The scarcity is one of the fundamental characteristics of BCH, since its production is limited to 21 million and its current monetary base is 18.6 million BCH with an issuance of 6.25 bch until 2024.

4- Stability is something that will increase over time in Bitcoin Cash, no currency had stability in its beginning, only with a large demand and adoption base is it achieved. However, it must be understood that it is deflationary money in which, if it is widely accepted, prices will tend to fall due to increased productivity in contrast to the issuance of BCH.

5- This is clearly an advantage in BCH, since we can not only fractionate it in many decimals, but we can send microtransactions due to the low fees.

6- The hoarding is something very simple in bch, just by saving your private key you can do it, or with a hardware wallet for greater security. Bitcoin Cash is not spent and is not lost over time, as long as you keep your keys (private key) well.

In short, Bitcoin Cash is the best kind of money for today's world and a future without economic borders. Our job is to foster and create an economy based on BCH, from the most distant stages of consumption to the closest ones, following the Austrian capital theory.

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Avatar for IanBlas
3 years ago

Comments

1- Prior non-monetary demand: it is that money must have a demand beyond its monetary use, since its non-monetary value is prior to monetary use.

1- Yes, the regression value in #BitcoinCash is fulfilled, since it has its own payment network integrated in the currency, the qualities of #BCH to be a decentralized means of exchange, with direct payments between people is what gives it value Regressive to it.

Hmm... you have to stretch reality a bit to conclude that BCH or any other crypto was used for something else (consumed for some life sustaining purpose) before it was money.

$ 0.00
3 years ago

The first bitcoins were created with mining that gave life to the same blockchain that is used to move the currency. If that had no value, bch would be priceless, and no one would have mined for the first time or would continue to do so. We can also remember when people exchanged 10 thousand bitcoin for 2 pizzas, those people exchanged bitcoins without price just to use and test their payment system (blockchain)

$ 0.10
3 years ago

They looked to the future, and anticipated (knew) that the properties of the coins were good enough to be money. They just didn't know the actual value in the beginning, for there was no market. Even in the beginning, some anticipated a very high value in the end.

But not due to the mining. The mining has other purposes.

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3 years ago