On the origins of cryptocurrencies

Abstract

The success of bitcoin as a medium of exchange poses a problem for the traditional Austrian view on the emergence of money. In particular, it casts doubt on the regression theorem of Ludwig von Mises, which implies that an item cannot gain acceptance as a medium of exchange without government support if it does not first possess some non-monetary use value. We describe the conflict that cryptocurrencies like bitcoin created for the traditional Austrian understanding of the emergence of money and the more recent steps those working in the field have taken to resolve it.