ISTANBUL, TURKEY - NOVEMBER 08: Gold Bitcoins are seen in the window of a Bitcoin and cryptocurrency exchange office on November 08, 2024 in Istanbul, Turkey. Bitcoin has soared to new record highs nearing 77,000 in the days after Donald Trump's re-election and on his campaign promise to support Bitcoin and the cryptocurrency market. (Photo by Chris McGrath/Getty Images)

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Bitcoin will never, ever replace government money. It’s useless as money.

Importantly, its lack of utility has nothing to with its recent decline. As this column has said for years, big BTC surges are every bit the indictment of the faux currency as the declines are.

Real money is quiet. And its quietude is an effect of its constancy as a measure of value.

Quick, when’s the last time you talked about the amount of heat in a degree, the volume of liquid in one cup, and the length within an inch? Tick tock, tick tock.

There would be no reason to. A degree, cup, and inch are constant measures that report on heat, volume, and length. Nothing more.

Really, imagine seeking a “stronger” or “weaker” degree, cup, or inch. The very notion insults stupid. An alteration of the measure in no way alters reality.

Money is no different. It’s just a measure that reports. Which means changes in its value change nothing. All they do is corrupt the would-be measure, all the while rendering it less useful as a measure.

The surest sign bitcoin will never be money can be found in what excited its proponents on the way up, along with its critics on the way down. Who would exchange goods and services with something so turbulent?

Production buys production. When we bring market goods, services, and labor to market, we seek market goods, services, and labor of equal value in return. Money is just the agreed upon measure of value used by producers to facilitate the exchange.

That production always and everywhere buys production is what renders bitcoin the opposite of money. With its measurement in dollars an every-minute concept, its capacity to referee transactions is anything but. With bitcoin, there will always be winners and losers in exchange which, by its very name, implies only winners.

Good money is yet again quiet, while bitcoin’s volatility renders it loud. Except there’s more.

Bitcoin’s real problem is that it failed from the start, and its failure is rooted in neo-Austrian and neo-monetarist mysticism that “inflation” is an effect of too much money, while a lack of inflation is an effect of a tightly-controlled “supply” of money. No, that’s incorrect. If you’re focused on so-called “money supply,” you’re missing the point in the same way BTC proponents have missed the point with their glee about occasional surges in the value of the coin.

Implied in Austrian and monetarist obsession with “supply” is that money is the instigator of production. No, money is the effect. Since we produce to get, money is always where production is precisely because its circulation mirrors production.

The above truth is utterly lost on modern members of the Austrian and monetarist schools. Of the view that a reflection of production can and should be centrally planned, they claim to know what the quantity of the exchange media should be. Their conceit is astounding.

Worse, it’s convinced them that monetary nirvana can be achieved if a central bank, or some pseudonymous character named Satoshi Nakamoto, strictly limits supply. No, that’s not serious.

Implied in controlling so-called “money supply” is controlling production. More realistically, the only limit to circulating exchange media IS production. Which means money circulates in greater or lesser amounts not because it’s centrally planned via quantity theories, but because it has constancy as a measure.

Bitcoin, with it’s fixed supply, indicts monetarist and Austrian theory like nothing else. And as bitcoin’s volatility attests, it’s a window into why neo-Austrians and monetarists are so hopelessly lost about money today.