Back to course 'ECON104: Principles of Austrian Economics II'

Topic outline

  • Unit 10: Bitcoin and Austrian Economics

    Collapse all Expand all

    You have reached the final unit of the course - well done! In unit 10 we look at the relation between Bitcoin and Austrian Economics. Being a free market non-governmental money, Bitcoin's fixed supply is discussed. We conclude the unit by discussing the Stock-to-Flow Model (S2F) model.

    Completing this unit should take you approximately 3 hours.

    • Students must
      Mark as done

      Upon successful completion of this unit, you will be able to:

      • explain how money can emerge on the free market without government intervention;
      • explain the relationship between government-issued money and opportunity cost; and
      • explain how Bitcoin's predetermined stock to flow ratio could be viewed as an economic constant.

    • 10.1: Lecture

      • page icon
        Lecture Page
        Students must
        Mark as done

        Bitcoin and the Austrian school relate to each other in many ways. Watch this lecture as we discuss the characteristics of Bitcoin, especially its fixed and predictable supply. The now famous stock-to-flow model, as first described by PlanB, seems to be unexplainably accurate. Could it be that Bitcoin introduces the first constant in economic calculation?

        Topics covered include:

        • Money emergence on the free market
        • Government-issued money and opportunity cost
        • Bitcoin's stock-to-flow ratio as an economic constant

        Key points:

        • Bitcoin's supply is fixed and predictable
        • Bitcoin is an example of how money can emerge on the free market
        • The S2F model, based on Bitcoin's fundamentals, could be the first example of accurate economic modeling
        • This predictability causes less uncertainty about the future and enables people to lower their time preference


    • 10.2: Discussion

      • page icon
        Discussion Page
        Students must
        Mark as done

        Since you have watched the video lecture for unit 10, it's time to watch Saifedean moderate a discussion on the unit's theme by addressing questions asked by your fellow classmates. As you watch the discussion unfold, take notes to help you retain information. Make sure you watch the entire discussion seminar video; otherwise, you may skip over important points. To get the best learning experience and mastery of the major concepts covered in this unit, you'll want to watch all videos in their entirety.

        Topics discussed include:

        • Causation vs causality
        • Human action vs. econometrics
        • The Misesian view on data analytics
        • Further clarification and questions about the S2F model