Bitcoin started as proto-money and did not start as a normal good.

The Austrian view of the origination of money includes the idea that a free (non-fiat) money can arise only from a commodity which already has economic value as a commodity, apart from any potential use as money.

This was a reasonable assumption prior to the advent of cryptocurrency. It was historically accurate. But new inventions can show existing assumptions not to be as true as originally thought.

Treating this law of the origination of money as an axiom is wrong and is the mistake. Treating it as a strong, consistent historical observation is right. Observing the current effects of new inventions is necessary - and is incompatible with treating this law as an axiom rather than an observation.

Bitcoin started as proto-money and did not start as a normal good. That was the whole point - to be a new money!

But since Bitcoin didn’t start off with non-trade “intrinsic” usefulness, the original account from the Austrian school on the emergence of moneys doesn’t know how to explain its emergence as money. An extended account could explain it, but it would contradict a key point that some in the Austrian sphere, including Schiff, take to be an axiom and that they refuse to treat as anything other than an axiom. An extended account would have to treat this point as historical but no longer as axiomatic. And that extended account really should be developed by the Austrian school - this is their wheelhouse.