I still haven't read that paper, it's on my to-do list. That same passage was the one that jumped out at me, though.

Leaving aside everything related to artificial credit expansion, somehow, radically reducing transactions costs in the global financial system is not supposed to have any productivity effect.

Excellent review. Pay attention to this review, guys, it shows a better understanding than most other reviews I read out there!

The paper received a lot of undeserved slack over the last few days — mostly, I believe, from people reading the title, skimming the abstract, and concluding from these authors’ employer (the ECB) that it must be junk.

That's pretty much what I did, except I also skimmed the first few sections then stopped, exactly because:

The authors try — horribly and unsuccessfully — to describe what bitcoin is and does. They play word games with Satoshi Nakamoto’s early writing and redefine terms to argue over mediation in PayPal transactions(?!). They quote prominent Bitcoiners and try to connect them to America’s election campaigns. The paper is full of errors and reeks of someone who has never made a Bitcoin transaction.

For serious readers who hadn’t been put off by the incorrect, level-zero-type objections in the first half of the paper, most have now stopped reading.

However, you point out:

But that’s not their point. What they deliver is a small, easily understandable model for what happens to the distribution of real goods when an asset appreciates forever.

And you also rightly critique:

hinging their entire argument on this assumption (that bitcoin is useless), the conclusion also becomes trivial (that wealth is redistributed from late adopters to early adopters).

We don’t need models, ECB affiliations, heck even a high school diploma, to grasp that

^ Totally correct.

You then go on to defend bitcoin and its uses. Overall, great article and thanks for sharing!

As promised, you carved that mess up pretty good. Thanks for posting.

Great article. Thanks. I am not sure if I'll ever get around to reading the paper so I'm glad there are people like you to review it.

ecb needs to be asking themselvs what happens if the euro keeps getting lower lol

How is the slack "undeserved" exactly? Seems entirely deserved to me, for all the reasons you mention in your article and for all the commentary I've seen on social media as well. Good article otherwise.

If the temptation of increasing money supply goes on then Bitcoin could go up forever. The FOMO will go on forever. The question Am I late to buy Bitcoin will go on forever. The FUD however will not go on forever. The clickbait of this whole thing is the abstract. While the real thing is in the THESIS. The mention of the word mismanagement is just distasteful. Money supply will always be abused by the powers-that-be. It was not mismanaged it was raped and abused throughout the millennia.

if it goes up forever in USD terms it means they been debasing that beech as expected. eventually the monetary premium of bitcoin wont be so significant, and one will be left with the sobering reality that on a bitcoin standard, you either add value or you dont and free lunch is not an option.

I don't care to read the hate. My favorite line from the abstract though:

the wealth effects on consumption of early Bitcoin holders can only come at the expense of consumption of the rest of society.

It's so frustrating, this communist idiocy. If anyone has any success in anything, it's a situation of "Shame on you, you're hurting the other people didn't do what you did and who don't have that success." Their solution is always to either ban it the thing that betters peoples lives so we're all mediocre at best, or more usually, take the wealth created and redistribute it.

That is the playbook.