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side Gold. Because there are individuals
that prefer to use Silver over Gold, this
may cause a drop in the value of Gold. In
the end, society will choose whether they
prefer Gold or Silver through the market.
Now think of Gold as Bitcoin and Silver as
Bitcoin Cash.
What does Mises say?
According to Ludwig von Mises in his
famous Theory of Money and Credit
treatise, the common medium
of exchange is determined
via the free market. What
this means is that soci-
ety, with all it’s options
available, will decide
amongst themselves
on what commodity
is the best medium of
change. Mises states
the commodity must be
liquid and stable. Liquidity
refers to a coins marketability.
The infrastructure sounding Bit-
coin, along with the huge market cap and
volume, gives Bitcoin a legitimate case to
maintain its spot as the common medium
of exchange. Stability, on the other hand,
refers to a commodity that remains con-
sistent. Unfortunately, it is this point alone
that makes the Segwit2X implementation
worrying for Bitcoin holders as the origi-
nal vision of Bitcoin has changed. With the
changes to the Bitcoin protocol moving
away from the creator’s original vision, the
future of Bitcoin is uncertain. According to
Mises, this would make Bitcoin an unlikely
candidate for a medium of exchange.
Conclusion
Adding Mises’s definition of a common
medium of exchange into the equation,
we get an interesting phenomenon. For
speculators that believe liquidity is impor-
tant, Bitcoin is your coin. Due to the wide
ranging infrastructure surrounding Bit-
coin, Bitcoin is far more liquid than Bitcoin
Cash. However, if the speculator views
stability as important, Bitcoin Cash is your
coin. Bitcoin Cash follows the vision
of Satoshi Nakamoto and is
not set to change drastical-
ly. Once we view things
in this way, the Bitcoin
split was inevitable.
Now it is time for the
free market to work
it’s magic; for we will
finally see which coin
will be the medium of
exchange for the future.
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