notig



Offline



Activity: 294

Merit: 250







Sr. MemberActivity: 294Merit: 250 The intrinsic value myth March 25, 2013, 02:35:07 AM

Last edit: March 25, 2013, 02:54:57 AM by notig #1



What makes gold valuable and useful for money is it's scarcity. And that scarcity means that if gold is what is backing a money supply, then the scarcity of that money supply is also controlled. A gold backed money supply puts automatic limits on the creation of that money... much like how bitcoin has automatic limits based off the rules of the network which everyone participates in because of their own self interest.



http://www.reddit.com/r/Bitcoin/comments/1ay8pe/the_intrinsic_value_myth/ Nobody ever complains in a casino "my chips aren't made of precious metal". You don't need to make casino chips out of precious metal... as is proven by the lack of any complaints in a casino chip system. The tokens are issued 1:1 with collateral. Inflation in this way... is impossible. Yet the tokens themselves are used to transact real value... upwards of millions of dollars and there is never a problem. How is it that a valueless token can facilitate the transaction of so much value with nary a problem? Because that is what money is designed to do. It's simply meant to make exchange easier. The value of the tokens is so consistent because the supply of them is controlled in an exact manner. They are simply not fabricated and given out on whim.What makes gold valuable and useful for money is it's scarcity. And that scarcity means that if gold is what is backing a money supply, then the scarcity of that money supply is also controlled. A gold backed money supply puts automatic limits on the creation of that money... much like how bitcoin has automatic limits based off the rules of the network which everyone participates in because of their own self interest.

justusranvier



Offline



Activity: 1400

Merit: 1006









LegendaryActivity: 1400Merit: 1006 Re: The intrinsic value myth March 25, 2013, 12:23:44 PM #2 I consider the belief in intrinsic value to be a form of magical thinking at best, or a self-serving strategy of inflating the exchange rate for gold at worst.

AsymmetricInformation



Offline



Activity: 115

Merit: 10







MemberActivity: 115Merit: 10 Re: The intrinsic value myth March 25, 2013, 07:41:19 PM #3 The "intrinsic value", "final demand", "regression theorem", "backed by X" arguments are all correct arguments if they say that something must be intrinsically useful for it to become a currency. Indeed, any non-useful (non-demanded) thing will vanish from the economy by-definition, so these arguments are not as constraining as they may initially appear.



For some strange reason, though, people do not understand Bitcoin's huge intrinsic value. Just as gold can be made into jewelry, Bitcoins have intrinsic properties that let them zoom far away into another country, produce unfakeable signatures or timestamps of documents, and/or vanish entirely and become stored in your mind. They can contain and execute their own last will and testament, they can be assembled into a contract and legal system. They are born into the world at a perfectly predictable rate, and they are indestructible.



To justusranvier 's point: Indeed, the myth that 'Bitcoins have no intrinsic value' (which is obviously untrue) is put forth by sheep from the gold world. They are losers who repeat the arguments of the Austrian school without understanding the logic that originally generated them. That's the end of the story.



What puzzles me is why this 'Useless Bitcoin' theory is lasting this long. Can anyone explain that?

https://github.com/psztorc/Truthcoin Support Decentralized Bitcoin Prediction Markets: 1M5tVTtynuqiS7Goq8hbh5UBcxLaa5XQb8

desired_username



Offline



Activity: 867

Merit: 1001







Hero MemberActivity: 867Merit: 1001 Re: The intrinsic value myth March 25, 2013, 07:50:06 PM #4 Quote from: AsymmetricInformation on March 25, 2013, 07:41:19 PM The "intrinsic value", "final demand", "regression theorem", "backed by X" arguments are all correct arguments if they say that something must be intrinsically useful for it to become a currency. Indeed, any non-useful (non-demanded) thing will vanish from the economy by-definition, so these arguments are not as constraining as they may initially appear.



For some strange reason, though, people do not understand Bitcoin's huge intrinsic value. Just as gold can be made into jewelry, Bitcoins have intrinsic properties that let them zoom far away into another country, produce unfakeable signatures or timestamps of documents, and/or vanish entirely and become stored in your mind. They can contain and execute their own last will and testament, they can be assembled into a contract and legal system. They are born into the world at a perfectly predictable rate, and they are indestructible.



To justusranvier 's point: Indeed, the myth that 'Bitcoins have no intrinsic value' (which is obviously untrue) is put forth by sheep from the gold world. They are losers who repeat the arguments of the Austrian school without understanding the logic that originally generated them. That's the end of the story.



What puzzles me is why this 'Useless Bitcoin' theory is lasting this long. Can anyone explain that?



I found that most people only concentrate on 1 or a limited number of aspects of the Bitcoin ecosystem. They cannot comprehend the "full picture" and what it brings to our lifes.

I found that most people only concentrate on 1 or a limited number of aspects of the Bitcoin ecosystem. They cannot comprehend the "full picture" and what it brings to our lifes.

justusranvier



Offline



Activity: 1400

Merit: 1006









LegendaryActivity: 1400Merit: 1006 Re: The intrinsic value myth March 25, 2013, 07:50:34 PM #5 Quote from: AsymmetricInformation on March 25, 2013, 07:41:19 PM To justusranvier 's point: Indeed, the myth that 'Bitcoins have no intrinsic value' (which is obviously untrue) is put forth by sheep from the gold world. They are losers who repeat the arguments of the Austrian school without understanding the logic that originally generated them. That's the end of the story. My point is that "intrinsic" value does not exist. All value is subjective and depends on the needs and desires of a particular individual at a particular time.



Gold has no value unless there's a person around who wants some property that gold possesses. Therefore the value is not intrinsic to gold.



You can replace gold with any other "store of wealth" in the above example. My point is that "intrinsic" value does not exist. All value is subjective and depends on the needs and desires of a particular individual at a particular time.Gold has no value unless there's a person around who wants some property that gold possesses. Therefore the value is not intrinsic to gold.You can replace gold with any other "store of wealth" in the above example.

AsymmetricInformation



Offline



Activity: 115

Merit: 10







MemberActivity: 115Merit: 10 Re: The intrinsic value myth March 25, 2013, 07:59:52 PM #6 Quote from: justusranvier on March 25, 2013, 07:50:34 PM Quote from: AsymmetricInformation on March 25, 2013, 07:41:19 PM To justusranvier 's point: Indeed, the myth that 'Bitcoins have no intrinsic value' (which is obviously untrue) is put forth by sheep from the gold world. They are losers who repeat the arguments of the Austrian school without understanding the logic that originally generated them. That's the end of the story. My point is that "intrinsic" value does not exist. All value is subjective and depends on the needs and desires of a particular individual at a particular time.



Gold has no value unless there's a person around who wants some property that gold possesses. Therefore the value is not intrinsic to gold.



You can replace gold with any other "store of wealth".

My point is that "intrinsic" value does not exist. All value is subjective and depends on the needs and desires of a particular individual at a particular time.Gold has no value unless there's a person around who wants some property that gold possesses. Therefore the value is not intrinsic to gold.You can replace gold with any other "store of wealth".

I quite agree, but it seems to me there is an implicit logic along the lines of:

High intrinsic value: can be used for many tasks that we can be expected to perform during our lives.

Low intrinsic value: can only be used for few or esoteric things (eg "I enjoy looking at my Bitcoins") that are done infrequently.



...and this logic has some underlying objectivity, doesnt it? Food has intrinsic value to all humans because all humans prefer to eat food by-definition.



My point is that Bitcoin DOES have crazy amounts of value for things that we need to do right now, so even allowing nonsubjective value the argument for 'Useless Bitcoin' is obliterated. I quite agree, but it seems to me there is an implicit logic along the lines of:High intrinsic value: can be used for many tasks that we can be expected to perform during our lives.Low intrinsic value: can only be used for few or esoteric things (eg "I enjoy looking at my Bitcoins") that are done infrequently....and this logic has some underlying objectivity, doesnt it? Food has intrinsic value to all humans because all humans prefer to eat food by-definition.My point is that Bitcoin DOES have crazy amounts of value for things that we need to do right now, so even allowing nonsubjective value the argument for 'Useless Bitcoin' is obliterated.

https://github.com/psztorc/Truthcoin Support Decentralized Bitcoin Prediction Markets: 1M5tVTtynuqiS7Goq8hbh5UBcxLaa5XQb8

JustJake



Offline



Activity: 60

Merit: 10





Numisalis - Physical Tradable Bitcoin







MemberActivity: 60Merit: 10Numisalis - Physical Tradable Bitcoin Re: The intrinsic value myth March 25, 2013, 09:32:05 PM #9 I saw this kind of crap pop up on the recent Slashdot Bitcoin article. (but what can you expect from commenters on Slashdot). The funny thing about it is that one of the reasons that gold is such a good medium for storage of value is because of how limited its utility actually is. There is certainly argument that it would be used more if it were cheaper, but the fact that it is not used and held up or otherwise "destroyed" from the perspective of gold supply is what keeps the supply more stable and makes it a good means of wealth storage. Gold has more value as a currency than it does as a material of industry.



Bitcoin is the same way just to a more extreme degree. Its utility as a currency far exceeds its utility as anything else. I think people underestimate the importance of currency utility and I think people really overestimate the value of the non-currency properties of gold. For instance, jewelry isn't worth crap beyond its melt value and that statement gets more and more true when people have to part with luxuries.

justusranvier



Offline



Activity: 1400

Merit: 1006









LegendaryActivity: 1400Merit: 1006 Re: The intrinsic value myth March 25, 2013, 09:35:39 PM #10 We don't really know what the market price of gold would be if central banks didn't hold huge quantities it, a fact that a lot of the "free market" Austrian economists conveniently ignore when they sing the praises of the gold standard.

Razick



Offline



Activity: 1330

Merit: 1002







LegendaryActivity: 1330Merit: 1002 Re: The intrinsic value myth March 25, 2013, 10:28:18 PM #12 +1 Gold has no value unless people want it. That being said, gold is real, tangible, and cannot be counterfeited either by government, or by others. ACCOUNT RECOVERED 4/27/2020. Account was previously hacked sometime in 2017. Posts between 12/31/2016 and 4/27/2020 are NOT LEGITIMATE.