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It's not my reasoning that circulates, it is money that circulates. :)
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Quick addendum: Note that the regression theorem applies. In order to *become* money the rock has to have some value to begin with, like being shiny and pretty to look at. It doesn't matter if it's a huge amount of value (it probably won't be) and the rock will acquire more value when it becomes apparent that everyone on the island accepts
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Nielsio: Just saw your latest post. On an island with only two people the problem that money solves doesn't exist. You need at least three people (A sells good/service to B for money, buy good/service from C with money) and in practice obviously a lot more in order to even have the coincidence of wants problem. So to expand your example: If there
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Nielsio: Monetary use aids in the fulfillment of wants itself , by furthering the division of labor. So people are willing to buy and sell money at a loss, so long as it solves the double coincidence of wants for them. I.e. if they can get it by selling something they value less than the thing they later buy with it. Or in other words, even if everybody
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I gotta disagree with some of my fellow Bitcoiners. From where I stand Bitcoin does not disprove the regression theorem, rather it's an interesting and very illustrative example of it. Bitcoin's value early on came from the novelty - people who liked the concept from a technical point of view wanted them just enough to engage in some - mostly
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What are you talking about? Bitcoin is being traded like normal on TradeHill, Bitomat, Bitcoin7, Bitmarket, Britcoin as well as over the counter. Price is 14-15$, which is still pretty bubbly imho. Anyway, the whole point of Bitcoin is that it's decentralized, so in my opinion this is just a good example of that. The largest, most vulnerable part
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[quote user="Jörg Guido Hülsmann"] It would be extremely risky to buy a commodity for indirect exchange without knowing its past prices; as a consequence, the spontaneous emergence of a medium of exchange is virtually impossible whenever such knowledge is lacking. [/quote] This refers to the price emerging in the first place - with
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[quote user="Nielsio"]Bitcoins are not good for anything besides trading.[/quote] Trading qualifies as an industrial use. If Bitcoins are useful for accounting and in exchange that means that they fulfill a human need. That makes them a good in the same way pen and paper are a good when you use them to write contracts and invoices. The value