Topic: Bitcoin's intrinsic value - page 2. (Read 4192 times)

Anything has value only as long as people are thinking it as having that value which depends on its utility, i.e usefulness. The reasons for valuation may vary (water vs alcohol, bitcoin vs dollar), but the grounds however different they may be or seem to be invariably produce the same scale of estimation within human mind... There is no valuation beyond subjective valuation by people. To say that "people may think something has value even though it has no value" is equal to saying that there is intrinsic value in things (logical necessity) existing beyond an individual's assessment of utility, whereas there is none actually...

Let me say it differenty:

People are actually not even evaluating bitcoins value. They only buy because the price is going up.

Yes at the moment people think that bitcoin has value (most people actually dont even think about bitcoins actual value, but only buy because the price is increasing). Thus they pay something for it (price). That does not mean that bitcoin actually HAS value. People can think that something has value even though it has no value (to a rational and sane human being). Thus something can have a HIGH PRICE despite having no value. People can be incorrect, and once they figure it out, the PRICE adjust to the objects actual utility (from the perspective of a rational and sane human being) in fullfilling human needs.

This is typical of a bubble: people think the object has enormous value and thus pay an enormous price. Once they realize that they have overestimated the objects value or that it has non at all, the price they are willing to pay collapses.

Why is that so difficult to understand?

I think that you really understand that your reasoning is false. If people didn't value bitcoin they wouldn't care to exchange anything for it, whether it ultimately turns out to be a pyramid or not. This is pretty evident. Actually, it is more interesting now why you are still going on with this garbage here...

I never said that utility of an object is the same for each person. However everybody needs to eat and drink. Thus food and water have utility for everyone. Nobody can do anything with BTC except dump it on the next guy. It has 0 value. You will agree with me once this pyramid collapses.

There is no utility existing on its own. Utility is always subjective and differs between people. In fact, even for one individual the utility of the same thing is different at different times (see the law of marginal utility). If anything had utility on its own, no exchange would be possible at all...

I have refuted both of these points already. That you cant grasp it shows how much emotional capital you have invested in this bubble. You WANT to believe bitcoin has value because you own it. You cant see straight. Again you fail to differentiate between price (what something costs) and value (what you get).

1. It is not a store of value as it has not value on its own.

2. As it has no value you are not transferring value when you transfer bitcoin.

You can do NOTHING with bitcoin except dumping it on the next guy.

This is a classical pyramid scheme.

Actually, it is you who are confusing issues here. The monetary worthiness of something which is determined through exchange is called price...

I think we're both confusing which "value" the other is talking about.

Value
1. the regard that something is held to deserve; the importance, worth, or usefulness of something.
2. estimate the monetary worth of (something).

Your saying that because someone perceives to value (no. ) a G/S they will purchase it, or be willing to purchase it thus creating demand. My argument is that it is this demand which in turn results in it having value (no. 2).

lets all agree that intrinsic is a synonym and means something that has utility on its own. these pedantic arguments are really annoying.

No, if people would not value something, why the heck would they want to buy it in the first place (i.e. create demand for it)? Value is the cause of demand, demand is the effect of value, if this clarifies things a little. The notion of supply is superfluous here and, yes, it is caused by demand (either open or hidden)...

Actually, I'm pretty sure you have it the wrong way around. Supply comes from the fact that there is value, with value in in itself being derived from the fact that there is demand. Supply does not dictate demand, instead suppliers will move to fit the demands of the consumers. If no one in the world demands your signed t-shirt then it has no value and then no one will bother to supply it. If there is demand, someone will eventually find a way to supply such a demand (provided it is viable).

I don't know whom you replied actually, but no, demand comes from value, not the other way round. And your case just confirms it. People would value signed t-shirts, and thereby arises demand for them...

Bitcoin is backed up by its inherent properties which people value because these properties help them reach their aims. Things as such are valueless..

Surely value comes from demand? If I own a signed t-shirt, and 1000 people want it because the person signing it is famous, its going to be worth far more i.e. more valuable than if a nobody signed it and only they wanted it 

Just to add most people on the planet don't even have access to a bank account at the moment. I predict in these countries, a similar thing will happen that happened with phones i.e. skipped landlines and went straight to mobile. People will skip bank accounts and go straight to bitcoin wallets.

Value doesn't come from demand, quite the opposite. Some value should necessarily exist before to support demand. And the intrinsic value you refer to here is called utility, i.e. usefulness for achieving individual's ends. How on earth could value be intrinsic if it changes with people's preferences?

Many people say that bitcoin does not have intrinsic value, they typically compare it to gold and say at least you can make some jewelry using gold

Value comes from demand. If someday, people's preference changed and there is no demand for gold jewelry, then gold will not have intrinsic value anymore

Bitcoin's intrinsic value also comes from demand, maybe it is difficult to see the demand for a single bitcoin, but the whole bitcoin network can satisfy 2 major demands:

1. Securely store value in a digital form

2. Securely transfer that value worldwide instantly

There are demands in both area, gold or fiat money can not fulfill these demands

For the first demand, people might pick an online bank account, but due to the inflative nature of fiat money, it is not secure: The value of the saving account is getting less every year and the bank can freeze your account when they wish to do so

For the second demand, bitcoin enabled almost free international value transfer, just like internet enabled almost free international telephone call

Another usually asked question is: What is backing bitcoin? It is backed by all the bitcoin miners around the globe with the most powerful network in the world, and one single consensus of never generating more than 21 million coins

It is all about how to store and transfer value securely in a digital form. Before bitcoin, there is no way to do this without rely on a third party

But to work as a currency, it must have stable exchange value, that is not the strength of bitcoin, at least not before reaching a full market saturation