Topic: Do you know if bitcoin has an intrinsic value and where it comes from? - page 2. (Read 2115 times)

I think it's value comes from demand and not something established and the proof is the fact it can increase or decrease a large % of it's price.

Let me reformulate: value can be subjective; some people collect used stamps, for others, they are worthless.

If many people want a rare object, it will increase in price, even if it can be of no practical use.

Bitcoin can be very helpful, but it's use only has indirect importance on the price, because it will be the old law of supply and demand that will decide it.

I love that point

Who cares for "intrinsic value"? It's all about supply and demand.

Do you know something with more intrinsic value than air? You die in a few minutes without it. But it's worthless, because supply is overwhelming.

How much value has the gold? I think that the value bitcoin has it comes from people trust. the more it has, more valuable it becomes.

Did anyone watch the video?

Actually I think that a bitcoin in essence is a token of value held on a network. Without the network it's nothing but a meaningless piece of code. I'm not trying to play with semantics at all, but rather establish  when a bitcoin has the properties which make it what it is. To me at least, that would require being on a network.

Remember we're talking about a virtual item. It's not like it has any properties (other than code) in and of itself. Only under specific circumstances does it become something other.

no, you are playing with semantics. sure, "bitcoins are what make the world go round." but the fact is, the network of miners and users of the currency are the basis for value. you cannot conflate people/computational power with bitcoins. if the hash rate dropped to zero tomorrow, bitcoins would still exist. and they would have no practical value.

Bitcoin is the network; the network is Bitcoin. That's like saying apple pie wouldn't taste nice without the apples. It wouldn't be apple pie without them.

That's pretty much our point in the video and then some more

I'll stop you right there. Bitcoins do not give holders the ability to do that. What enables them to do that is the network of bitcoin miners that allow transactions to be pushed. If there were no network, bitcoins would be completely useless. They have no intrinsic value.

Well, did anyone actually watch the video this thread is about?

https://www.youtube.com/watch?v=2R3Zg1KL_KE

Bitcoins have no intrinsic value?
This is simply not true. Each bitcoin gives the holder the ability to embed a large number of short in-transaction messages in a globally distributed and timestamped permanent data store, namely the bitcoin blockchain. There is no other similar datastore which is so widely distributed. There is a tradeoff between the exact number of messages and how quickly they can be embedded. But as of December 2013, it's fair to say that one bitcoin allows around 1000 such messages to be embedded, each within about 10 minutes of being sent, since a fee of 0.001 BTC is enough to get transactions confirmed quickly. This message embedding certainly has intrinsic value since it can be used to prove ownership of a document at a certain time, by including a one-way hash of that document in a transaction. Considering that electronic notarization services charge something like $10/document, this would give an intrinsic value of around $10,000 per bitcoin.

While some other tangible commodities do have intrinsic value, that value is generally much less than its trading price. Consider for example that gold, if it were not used as an inflation-proof store of value, but rather only for its industrial uses, would certainly not be worth what it is today, since the industrial requirements for gold are far smaller than the available supply thereof.

In any event, while historically intrinsic value, as well as other attributes like divisibility, fungibility, scarcity, durability, helped establish certain commodities as mediums of exchange, it is certainly not a prerequisite. While bitcoins are accused of lacking 'intrinsic value' in this sense, they make up for it in spades by possessing the other qualities necessary to make it a good medium of exchange, equal to or better than commodity money.

Another way to think about this is to consider the value of bitcoin the global network, rather than each bitcoin in isolation. The value of an individual telephone is derived from the network it is connected to. If there was no phone network, a telephone would be useless. Similarly the value of an individual bitcoin derives from the global network of bitcoin-enabled merchants, exchanges, wallets, etc... Just like a phone is necessary to transmit vocal information through the network, a bitcoin is necessary to transmit economic information through the network.

Value is ultimately determined by what people are willing to trade for - by supply and demand.

Ain't got no intrinsic value. Unless you're measuring it in terms of how much utility - but how would you measure the utility of anonymity and decentralized currency/transactions? Realistically, the value of Bitcoin simply comes from the perception of buyers and from there your standard supply and demand.

That's still not intrinsic value though, but I think people put too much importance on whether something has intrinsic value or not. It doesn't matter as long as it obviously has value.

Its not right to say that Bitcoin has no intrinsic value, it needs a lot of hardware and electricity to "manufacture" bitcoin thus Bitcoin's intrinsic value is electricity + hardware .

That's not the definition of intrinsic value though. It has value for sure, but I wouldn't say it's intrinsic, just like the value of paper money isn't.

no intrinsic value. the value is in the network, which is not inherent.

Bitcoin has 0 intrinsic value with high dependency on technology.

I would argue that it has intrinsic value because people choose to hold it and transact using it
Usage gives it inner value