So the day where there is no more gold under the ground (assuming this is possible, for the sake of the argument let's ignore the rising marginal cost of the extraction which make this impossible), do you think the value of gold would somehow decrease since no work would be required to extract it?

PoS is a kind of gold which were already fully mined.

@ toast, the evolution of logic(scientific method)  cult is an open cult many follow the scientific method because it is functional but some are just cult follows and not open to reason, your job is to distinguish between the two.

Ludwig von Mises describes how the commodity with the most general utility becomes "money"  then through evolution his regression theorem explains how we get fiat.

It is important to understand that "money" is you labour or the product of your labour, and not all labour or products are equal. (Digging a hole in the ground and filling it up is labour intensive but has no value, like wise making something no one wants lacks value)

Subjective human preferences give commodities there value, this value changes but it represents the majority.  (This is called intrinsic value, it should be called functional utilitarian value - gold bugs get hung up here as they can make a cup from gold but not cryptocoins.)

Adam Smith presents arguably the definitive argument of on how we all  cooperate in a free market all notable economists agree including Marx.

Smith explains how excess resources in an economy lead to the division of labour which in turn leads to codependent relationship in an economy like mining copper and copper being manufactured into a plow which in turn increase productivity resulting in competition and an increase in productivity.

Smith also shows how the excess resources are invested in the most valuable commodities and how those commodities become money as everyone can use them in trade to be more productive.

Those comprises that improved productivity were metals, bronze and later silver and gold because they out lasted all others.
 
Over time the value of metals came to represent the cost + profit it took to mine them.  They held there value in the free market because capital accumulates where it it provided the most utility.

Mises explains how we get from then to now, understanding this and projecting explains how fiat causes mal-investment and the mis-allocation of resources.

Now PoW ensures the cost of money requires the investment of excess resources, this is consistent with the work of Adam Smith it's value is derived by the majority its production is limited by competition and availability of excess. It isn't a cult.  It's value is free market driven and like gold its production gets exponentially more expensive.

Now PoS has more similarity to how capital functions today, it requires an all knowing enlightened administrator, capital allocation is not determined by the free market but by the controller of the capital.

Austrian economics is pseudo-intellectual twaddle. Forget that nonsense.

Money is a indicator of social status.

It determines what resources society makes available to you as a member of society.

The value of labor or any product is entirely subjective. To one person a shell represents a days work, to another it is a gold piece, to still another it is a piece of paper.

The nature of the medium of exchange is irrelevant to this process. It is only relevant that something represent what resources are afforded to you from the collective efforts of society.  

The idea that mining "backs" money with work is magical thinking.

Satoshi believed, as do I, that miners by competing with each other invest in equipment and power equal to the value of the mining reward. He said . . .


The cost of proof-of-work is not merely equal to the power used, it is indeed equal to the mining rewards - $557,358,000 annually at today's quoted price.

I concede that this is a lower figure than the 10% of the world's economy consumed by the financial sector, yet it is a waste because Satoshi could not conceive of proof-of-stake, nor did he debate the concept. The existing idea of hashing proof-of-work instead was adopted for Bitcoin.

I'm very familiar with Austrian economics. It's an apologetic for the economic polices of the Austro-Hungarian Empire and thus represents a rationalization for policies that are nothing less than a recipe for oligarchy. Notice that the Austro-Hungarian Empire is now in the wastebin of history. There's a reason for that and it is very much the same as the reason for what we currently face in the world today.

Also, so you know, you have no idea what my economic ideas are about, but since you think must be a choice between Austrian economics and the corruption of Keynes' economic theories that is currently dominant I can see you have the same extremely limited economic perspective shared by almost all Americans.

If the idea of a free currency is going to take hold those ideas needs to be jettisoned quickly.

Do you generally hold to the intrinsic value argument, that is ironically used against bitcoin by its detractors? Some say that digital virtual currencies have uncertain value because they cannot be used for anything else, e.g. precious metals have a use as jewelry. Fiat currencies have a non-intrinsic value as legal tender for the payment of taxes.

Theory of money allows for the absence of intrinsic value insofar as the particular currency is widely accepted as having value. I argue that an electronic cash, peer-to-peer payment system, operating without trusted intermediaries has value due to its comparative utility - even without being legal tender anywhere yet.

I believe that the triumph of capitalism is complete. World events over the past few decades and the ebb and flow of welfare-state governments have precluded the mass confiscation of Bitcoin for economic leveling and such. I do expect small percentage rate wealth taxes, which are already applicable in certain jurisdictions, as are estate taxes which also apply to bitcoin.

My intuition is that as bitcoin continues its 10x average annual price appreciation, then large holders will tend to save, and will only spend on necessities and the most certain of investments. Take the example of Bill Gates who, while CEO of Microsoft, began setting aside a stash of cash equal to the company's annual sales. This tactic has been widely copied. Perhaps $1 trillion USD is held as a cash safety net by large enterprises worldwide. Likewise sovereign wealth funds are saved for necessary and very deserving possible future expenses.

LOL. The mess originated when they threw the said theories and common sense out of the window.

(Almost as hilarious as saying that something with an IPO is a coin and not a share.. )

The world economy is a mixed economy, but let's put that point aside for the moment,

"Capitalism", even in the altered form it currently takes, is standing still only because there have been massive infusions of cash pumped into the economy. Capitalism is a failed system and is on it's last legs. History is not over by any means.

Over the last 100 years or so we've adopted the welfare state because pure capitalism provides no basis for a social compact and without social reforms the system would have already collapsed.

Consider this:
How is mass consumerism going to operate as a motive force when people don't have any money or any way to get money because human labor will be obsolete within a 100 years?

There will be no tax base to support them with the welfare state. So basically what that means is market distribution has reached the limit of it's utility and will be abandoned by the end of the century.

The adoption of digital currency will be a minor stop down that path.