‘Higgling, Haggling …’

The title is a part of Adam Smith‘s description of the flaws inherent in any system of bartering: Once two parties have actually agreed to negotiate a swap of items or services, which is easier described than accomplished, how long will it take to negotiate value or price? Is my horse worth the same as your horse? Why do you think so? You must be hiding some detail. You must be trying to foist a sickly ill nag on me to ride off with my healthy animal. How dare you …

If one party thinks the other is out to cheat him—even if the other party is not out to cheat—he will over sell with the intent to make a profit. Further, if the other party also thinks he is about to be cheated, both parties will attempt to cheat each other in order to think they are protecting themselves. Hence Smith’s description of barter as “higgling, haggling, swapping, dickering.” The two bartering parties run the risk of spending the entire day in fickle negotiation rather than in work.
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Bitcoin(s) and Monty Python

I have been attempting to educate myself about “bitcoins.” Correction: I decided this morning that I wanted to educate myself about “Bitcoin” and “bitcoins.” After untold minutes spent on this project, the extent of my knowledge remains this (ahem): “Bitcoin,” with the capital B, refers to the network(s) or the software that people use to obtain or unlock “bitcoins,” with the lowercase b.

The rest is a lot of things I usually refer to as words.

On Monday, Marc Andreessen wrote a laudatory essay in the New York Times entitled, “Why Bitcoin Matters,” a long piece that I could not stay with longer than to get that it is laudatory because I do not understand what this new digital currency is all about at its very premise. (The fact that every news article attempting to explain the concept features a photograph of physical coins does not help at all.)

A number of my blog subscriptions pointed me to a reply to the Andreessen piece that was written and published yesterday, entitled, “On the Matter of Why Bitcoin Matters,” by one Glenn Fleishman. My takeaway from that is that Fleishman agrees that the concept (lowercase b bitcoin) is an exiting one for the future of digital transactions but not as exciting as the invention of the WWW or personal computers, which is how exciting Andreessen seems to think it is.

What came to my mind while it was reeling with financial details and denials of frequent fraud was this classic from Monty Python, “Mystico and Janet,” in which residents of apartment buildings built by a magician (and his assistant) are only secure as long as they believe the apartments in which they sleep actually exist, which they do not.