Cryptoeconomics

See the "Cryptoeconomics" side menu for a full list of topics.

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This started as a way to avoid retyping the same ideas, 140 characters at a time. In keeping with that environment, topics were as short as possible, and informal. I did not intend to write a book, and still could not. Most of the topics (including this one) were written on my phone, on a flight, train or in a coffee shop. Many are quick observations that arise from intimate knowledge of core Bitcoin code or long self-study and experience in various disciplines.

Over time topics began to interact, a necessary taxonomy erupted, and what had been a casual process of ad-hoc observation started to become work. The topics are as short as possible and assume some knowledge of both Bitcoin and economics. I made an honest effort to rationalize links and terminology, but my focus remains on consistency and expansion of understanding. Fortunately others have come along to add illustration, organization and publication.

I have used the terms Catallactics and Praxeology to describe the underlying discipline. People also use the term Austrian Economics. I find each of these unsatisfying, so have started referring to the discipline as "Rational Economics" (not to be confused with economic rationalism), a system based entirely on deductive reasoning from a set of axioms.

It was Mises who explicitly established a system of economics on a rational basis, yet this approach does not pervade the entire Austrian School (which predates Mises). Rothbard adds rigor and clarity to Mises, deriving some important new conclusions. Yet Mises (as most humans) makes material errors, which are unfortunately carried forth by Rothbard. Other errors commonly amplified within the Austrian School are clear misinterpretations.

In each case where Mises errs he is critiquing state fiat money. In other words, he appears to sacrifice his objectivity to his passion. Yet his rational system, properly applied, easily exposes the errors. State money deserves critique, and Bitcoiners rarely miss an opportunity. Yet it deserves accurate critique; anything less is counterproductive. With correct analysis, specific relevant forces can be identified, both in monopoly fiat (e.g. Dollar) and in market fiat (e.g. Bitcoin). Such proper analysis can limit the waste of precious capital on irrational propositions.

A strictly rational process not only exposes errors, but also produces new and interesting discoveries and simplifications, not just in Bitcoin but in economic theory generally. The topics form a graph, over which no total ordering seems appropriate. The table of contents is a poorly-imposed order. While some attempt at progression has been made, I recommend reading the topics as they were written, as a curiosity.