Very close, but not dead-on

Who creates the tickets?

Why should any of us care to accept these tickets from the creator in exchange for coats or anything else?

If we want to trade these tickets around, how do we know how much they're worth against various real things?

If I can take the ticket into a department store and trade it for a coat, in the short term and for me it is just as good as if the ticket creator gave me the coat. A coat is a coat (at least in this metaphor) & a troy ounce of 99.9% gold is a troy ounce of 99.9% gold. But what will the department store do with the ticket except make their way back to the coat check and demand a coat? If for some reason these tickets are widely accepted and there begins to be some doubt about whether they will be widely accepted in the future, perhaps because people increasingly understand the coat check has no coats, people will dump the tickets while they're still good for anything they can get their hands on.

This panic, which Mises called the flight to real values, I believe will happen to both fiat currency and Bitcoin because there is no real stable asset. For now both of these accounting units exchange for various real goods.

Reply to this note

Please Login to reply.

Discussion

No replies yet.