The libertarian critique of money implies that fiat money is bad because it is subjective, i.e. political; and that money needs an ‘objective’ support. But the Bitcoin support being immaterial code, it is worthless except for the trust of the community, and as it is designed for self-interest through its deflationary design making it increase in value, it also needs to be scarce to be subject to market dynamics of supply and demand. But though it can’t serve policy by determining its predetermined value, it is also in essence a fiat currency, created by the fiat of its creators, not an objective material value (such as gold or other commodities, some of which historically could actually be used by itself). Libertarian economist seem to fear most of all the arbitraryness of dictatorial powers that print money to suit their purposes, thereby debasing its value. But democratic governments with a social mandate may very well use it differently, for example for carrying out social or redistributive policies. I think David Graeber makes the point that most recent crisis of inflation were actually not the result of printing money, but of debt generated by the banks. In any case,the commodity approach behind Bitcoin makes any progressive social policy impossible, and leaves us stuck in highly unequal societies. This does not mean we should be opposed to Bitcoin, just wary of some of its supporters claim that it is a universal panacea.
http://blog.p2pfoundation.net/dmytri-kleiner-bitcoin-cant-serve-the-necesary-public-function-of-money/2012/11/08
