"Behind every fiat money used in exchange lies a unit of account defined by a monetary standard [which is] underwritten by credible claims to future surpluses monetized by the government and/or the commercial banking system. [...] Claims of a 'Bitcoin standard' or anything like it are completely indefensible" (p. 28)."
"The only reason they see bitcoin trading at a positive price at all - let alone all-time highs - is that malicious actors wishing to use it "must random a large enough quantity in U.S. dollar terms (usually) from existing holders" (p. 33), i.e., a holdup problem:"
""Rises in the bitcoin price do not prove the intrinsic value (or network value, or whatever) of Bitcoin any more than a lack of homes for sale in a neighborhood makes those homes infinitely valuable" (fn 48, p. 33)."
Bitcoin is characterized as indefensible as a monetary standard because fiat money rests on a unit of account underwritten by credible claims to future surpluses monetized by governments or commercial banks. Bitcoin's positive price is attributed to a holdup dynamic in which malicious actors must acquire sufficient dollar-denominated holdings from existing owners. Price increases do not demonstrate intrinsic or network value, analogized to housing shortages that do not create infinite value. Because Bitcoin is not issued by governments nor upheld by tax receivability, it is placed outside the mechanisms that define fiat monetary systems, undermining claims of a Bitcoin standard.
Read at Bitcoin Magazine
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