Topic: Does Bitcoin have real value? - page 3. (Read 1125 times)
I think the only reason why money is currency is out of the public consensus, which is we need it. When something is widely acknowledged, it builts its own power to convert messages. Gold and silver are once the currency in circulation, however, no matter how much value they possessed, they are eliminated by times from being used as currency. That is how things go all the time, and same as currency. The appearance of Bitcoin fully shows implied that the need for some cryptocurrencies is inevitable. And seeing through those years, though many bumps in the road, it is thriving from an overall view. And it will definately keep this trend in future. Though Bitcoin is not like gold or silver in the way of possessing value, it has value for sure. And the value possessed by Bitcoin will definately go up as the Growing of public consensus.
I'm not sure what you mean by this. Do you mean that I should have as a starting premise, "Bitcoin is money"?
Hint: Cash means money, maybe you should look at what it was initially designed as(whitepaper) to understand what the creator tried to achieve. See you dont have to believe its money, but this hint can maybe save you some time, because evaluating a monetary good is in complete contrast to evaluting some resource. Money is non-productive by nature, while resources are. For the success as money the monetary functions are the deciding factor. You cant eat your money, cant drink it, cant do anything with it, except maybe wiping your ass. Wood is amazing resource and you can use it for many things, but try using it as money and you will fail hard. The irony is that any rational personal woud still prefer money over an actual resource(that can do something), because you can acquire any resource you want with it. Also some worthless paper won over gold, how can you explain it?
And do you also mean that I should not have any supporting argument(s) to prove why this as an epistemic status of "probable" or "certain"?
You should, but reality doesnt care if you just feel right and put too much emphasis on false assumptions. 1. The commodity (or ornamental) value of gold ensures that there will always be a buyer of last resort.
This doesnt matter much for money. The commodity use of gold is what? Maybe 1 trillion a year(i didnt check an accurate number), while the market cap is over 11 trillion big. Giving us a monetary premium of 91%. Your last resort buyer wouldnt matter, if you lost 90% of your wealth. And when ellaborating money optimizing for the last resort is counterproductive, because its there to function in a civilization, in an acopalypse you will worry about resources/ survival and not money.It is the gun
Its not lmao, now youre drifting in pseudo-intellectual bs. Force doesnt indicate any value, how much value does it have when you take the gun away? If i gave you 500.000$ would you refuse it, because you werent forced? Gold is a terrible medium of exchange, try to run around with 500.000$ in gold and see how safe/ comfortable it is. Try to pay for a coffee in gold and see how it well it works(hardly divisible). Have some gold coin that isnt popular and dirty and see how fungible it is. There was a practical need to overcome the limitations of gold as money, paper makes using money easier and more efficient. That politicians robbed paper money its beneficial function, doesnt mean it was adopted out of force initially. How does Bitcoin have value right now to people, without putting a gun on peoples head? Evidence of force's support for fiat currency can be found in their disappearance from use, despite "memory prices", for countries that no longer exists (e.g., the Confederacy, South Vietnam after 1975, etc.)
It doesnt mean a currency cant disappear, but the new currency will still use memory prices. And Menger talked about the natural emergence of money specifically, indicating an evolution taking place, not some authoritarian that just decided one day that money had to be used. Money would emerge again, even without further government intervention, it could even survive a fall of the government. The disappearance of currencies doesnt prove these theories wrong. 3. Isn't the instability in the exchange rate for Bitcoin a good indicator that the "price memory" theory isn't working?
Nah, price memory means the purchasing power of money isnt a circular assumption, when we keep going back to when no money existed, then we must arrive at a point where the first good to emerge as money had an objective value for something other than being used as money. When money emerges, goods will start to be priced in money and it will stay this way, even if the medium of exchange changes. Bitcoin is a good with completley inelastic supply, so any big volatility is expected, because there isnt any mechanism to stabilise it. No good has a guaranteed fixed price/exchange rate, even if its primariliy used as a medium of exchange.Im still not satisfied with your refusal of the subjective theory of value, what value would any good have, if we didnt exist?
Let’s use the US dollar as an example of something that has a real value. [...same paragraph...] This requirement is forced at the point of a gun. The US dollar is, at its core, a type of ticket that you must give to the government to allow you to live. That makes the US dollar valuable to your life.
Fiat's currency support isn't "memory price". It's legal tender laws, tax laws, price control laws, etc. It is the gun.
Money so “valuable” that people must be forced at gunpoint to use it—such wow!
It would be otiose to speculate on whether you would preach to slaves about the “value” to them of their chains, or cook up a sophistic theory deprecating the value of a pair of bolt-cutters. Of course, when I put it that way, you will rationalize a counterargument however you want.
I was just now reading OP. Musing on an ungrounded pile of abstractions without adequate empiricism. The naïve reading of books, out of contact with reality.
OP reads as if someone decided that the U.S. dollar has value, and Bitcoin has no value—then spent some time researching ways to rationalize this conclusion. Needless to say, it is riddled with the sorts of fallacies that some of us have seen too many times to be interested in further waste of time.
I searched all three pages for the word “petrodollar”. Zero hits. My, are you in for a surprise when the scam collapses.
Please advise, why are you even here? If you seek to debate with some Bitcoiners, or maybe to preach to them under a doth-protest-too-much* username the salvation of the Almighty Dollar, then perhaps some of the folks here will enjoy the opportunity to practise answering common fallacies. But others of us are too busy for such diversions; and for my part, much though it will shock some of my friends, I actually agree with Nietzsche’s conclusions about Socrates. So as for debates.
* Although I see that it seems you are, or may purport to be affiliated with some website, it does not escape my notice that preaching to people under the name “reasonspace” is like saving souls for Jesus under the name “saintly_virtue”—or seeking no-escrow trade deals under the moniker of “honest_trader”. Cf. “RationalWiki”, a propaganda site. My own term for this: Those names doth-protest-too-much, methinks. By contrast, what may be inferred from my name? I loudly brag and declare to the world that I am nobody’s, I am of nothing—I belong to zero!
If you start to evaluate Bitcoin as money, it might help you understand this. The circularity argument has long been thought about in economics.
I'm not sure what you mean by this. Do you mean that I should have as a starting premise, "Bitcoin is money"? And do you also mean that I should not have any supporting argument(s) to prove why this as an epistemic status of "probable" or "certain"? If this is not what you mean, then perhaps you can elaborate more on what you mean.
Thank you for the quoted content. I have disagreements with the content. Here are some of them.
1. The commodity (or ornamental) value of gold ensures that there will always be a buyer of last resort. It will be the "consumer" of that gold. This means that the gold you're holding in your hands is actual wealth and not only some intermediary product that you can exchange with a willing trader for actual wealth in the future. And the fact that gold is used as a medium of exchange (in a free market) just means that the buyer of last resort is willing to forgo the gold because there is greater demand (i.e., someone willing to pay a higher price) for the gold for use as a medium of exchange.
2. Fiat's currency support isn't "memory price". It's legal tender laws, tax laws, price control laws, etc. It is the gun. I also think that loan agreements denominated in that currency also serve to motivate people to collect fiat currency. However, if the gun goes away, then I think that people will shift away from using that currency for future loan agreements. Evidence of force's support for fiat currency can be found in their disappearance from use, despite "memory prices", for countries that no longer exists (e.g., the Confederacy, South Vietnam after 1975, etc.)
3. Isn't the instability in the exchange rate for Bitcoin a good indicator that the "price memory" theory isn't working?
Maybe there isn’t even an objective way to quantify value, even tho there’s many different kinds of values. Value is never a constant, it changes over time. Even the most stable store of value in humankind, gold, doesn’t have a fixed value, not even a market cap is ever constant. So you could ask what is real value in the first place.
I think it's important to distinguish between value and price. A piece of chocolate cake from that Michelin star has a certain amount of value to you, but perhaps the price is too high for you and so you make do with an alternative that provides similar but not exactly the same value. But something must have some value for it to deserve any price. If you assign a price to something worthless (of no value) by buying it, then you will suffer the consequences if you end up being the last one to "hold the bag."
The fourth condition means it must already be considered a value before it can be used as a currency. If there isn’t independent support for its having value, the claim that Bitcoin has value is circular. See below:
1. Bitcoin is a value because it can be used as a currency.
2. Bitcoin can be used as a currency because it is a [long-term stored] value.
Second, the fact that Bitcoin is finite doesn’t by itself make it a value. Scarcity does not determine whether something is a value or not. Scarcity only determines the price of something that is already determined to be a value because of another reason. For example, certain forms of toxic waste may be scarce but that doesn’t mean the waste is a value.
It’s not circular your assumptions are just off. The two criterias for a store of value are:1. Bitcoin is a value because it can be used as a currency.
2. Bitcoin can be used as a currency because it is a [long-term stored] value.
Second, the fact that Bitcoin is finite doesn’t by itself make it a value. Scarcity does not determine whether something is a value or not. Scarcity only determines the price of something that is already determined to be a value because of another reason. For example, certain forms of toxic waste may be scarce but that doesn’t mean the waste is a value.
1. Scarcity(Supply relative to other goods).
2. Durability(No loss in functionality with repeated use).
These two alone don’t determine if the market will assign value to it, or if this will be used as money over everything else, but you can determine how good of a store of value it is with these. But to be actually used as one, it needs actual use by the market, and for this other conditions need to be met first.
We are in agreement that scarcity and durability are necessary but insufficient conditions. We don't agree that only other condition (if this is indeed your position) is for people to say that it is valuable. This is the subjective theory of value that I've refuted in my original post.
I invite you to take a look at the argument map that I created to help me write the article to see the circular loop in visual form.
https://app.reasonspace.com/arguments/693?token=845ecf75-edc9-42fc-9440-bfebe8d42072
store of value so that the whole world accept gold as an investment asset. When someone buys gold, he understands very well that anyone will recognize and accept gold, because what he buys is a metal that has value.
Conclusion from my post:
which determines whether or not there is value in the medium of exchange, not in the object being exchanged.
In other got is to determine if something have value, we must first of all understand the term value. Value talks about worth and acceptance (that’s me keeping it simple). If we are to look at it, it doesn’t need to be backed by anything as a determinant of its worth or generally accepted by the public before we can say it has value.Conclusion from my post:
which determines whether or not there is value in the medium of exchange, not in the object being exchanged.
Gold assumes a physical nature while cryptocurrencies takes an intangible nature and that’s okay. It doesn’t have to have a physical nature or be backed by something or generally accepted to have its value. The seller and buyer determines its value. When you buy programs or codes on the web, it doesn’t have a physical nature and yet you exchange your hard currency for it. Bitcoin is no difference and it’s still at its growth phase.
The multitude that accepts today or are aware of it today is far different from 10years ago. So it would continue until it attains a global acceptance.
Imagine a share of stock from a famous company if none wants to buy it the seller should decrease the price and in the end, this will be worthless because of having no buyers and there can be the opposite of this story.
If you own stock in a company, you are an owner of that company. This means the profits that the company produces belong to you. This is a value independent of whether others want to pay you money for that stock or not.
GOLD.
Gold has intrinsic value and can be used as a store of value so that the whole world accept gold as an investment asset. When someone buys gold, he understands very well that anyone will recognize and accept gold, because what he buys is a metal that has value.
Gold has intrinsic value and can be used as a store of value so that the whole world accept gold as an investment asset. When someone buys gold, he understands very well that anyone will recognize and accept gold, because what he buys is a metal that has value.
There's no such thing as intrinsic value. That is, there is no such thing as value that's independent of a valuer. That is, to say that something is a value, you must identify "to whom" and for "what purpose?" To say that something is an objective value, you must be able to identify the facts in reality (vs. feelings) as to why it serves that purpose for that individual.
Gold has multiple objective values. It has functional values in the form of conductor, tooth fillings, etc. But gold also has an aesthetic value too. For more on the aesthetic value of gold, please refer to this article. https://www.forbes.com/sites/harrybinswanger/2013/11/30/in-praise-of-gold-not-a-barbarous-relic-but-a-spiritual-value
I believe the question of real value is not as simple as it looks. Do computers have real value? To many people, they do, but there are also the elderly, for instance, who live well without computers and to them PCs are worthless. Does a smartphone have real value? It does if you know how to use it, and if you live in a place where you have stable access to electricity. Then there's food, which generally has value. But meat is of no value to vegans, and a pack of rice isn't of value if you are in a war zone, living underground and unable to cook on fire. And then no more abstract things, like securities, debt trading and stuff. Do they have value? Not really, they're too far from the physical things. And does fiat have value? It doesn't, it's just numbers on a screen or a bunch of banknotes.
My point is, value is negotiable and dependent on the people and the circumstances. There are plenty of people to whom Bitcoin has no value, but there are also at least dozens of millions who believe in its value and are ready to exchange it for a certain value, which is all that matters.
My point is, value is negotiable and dependent on the people and the circumstances. There are plenty of people to whom Bitcoin has no value, but there are also at least dozens of millions who believe in its value and are ready to exchange it for a certain value, which is all that matters.
I think that this is a great recognition of value as being dependent on a valuer. However, there is a difference between an objective value (value dependent on purpose & facts) and subjective value (value independent on facts). What this means is that just because someone considers something to be a value to them doesn't mean that it is. People can be defrauded or mistaken.
Stocks can be analyzed by looking at performance of the company, state of the market and so on, and then calculating how much should they be worth, based on expected profit, but if a company lies about the state of its operations, you will get defrauded, even though you used math to calculate "objective" value.
Math doesn't make an idea objective. Objectivity doesn't mean "using logic or math". It means "volitional adherence to reality". It means turning your mind towards reality to identify facts and use them in your evaluations. Logic (or math) is a necessary but insufficient condition for achieving objectivity.
The fact that you can be defrauded doesn't mean that facts don't exist, or you don't try to use your best judgment and perform due diligence to ensure that what you think is true actually is true. That's what it means to be objective.
Maybe there isn’t even an objective way to quantify value, even tho there’s many different kinds of values. Value is never a constant, it changes over time. Even the most stable store of value in humankind, gold, doesn’t have a fixed value, not even a market cap is ever constant. So you could ask what is real value in the first place.
Volatility indicates subjectivity, shouldn’t a „real value“ be a constant? And im not just referring to market prices here. You can write a perfect exam and get 10 different grades, depending on who evaluates you. The human mind isn’t objective, but we will be the ones to decide what has value and what not. If it wouldn’t be our subjective decisions that determine value, we wouldn’t even be here asking the question now, because we already knew.
To me Bitcoin might be priceless, to others it might be worthless. But then the sum of evalutions of all people create an average, that then determines, how much value is assigned to it at this moment in time, and from this a consensus starts to form and this thing will be chosen over things more often(the higher the average). The design behind Bitcoin is objectively superior to fiat for enabling universal trade(this is the main task of money), so we can assume more and more rational actors will deem it valuable in the future. But ofc there’s more factors on how people will evaluate it, each subjectively different and endless in variation and the sum doesn’t need to be rational.
In conclusion: it might be better to think about, if other people will find it valuable, than if the thing itself is physically valuable(even tho physical properties can influence other peoples perception), because people will form the value in the end.
The whole world can think im better than messi, but if we’re actually playing each other and he keeps beating me, this is likely to change. They can even bet money on it and loose. There is an incentive to be rational and objective, to not constantly loose. Giving trust for free can be an expensive gift, like in the housing crisis. If you trusted the market to not be easily breakable in the first place, your subjective decision was based on false assumptions.
Volatility indicates subjectivity, shouldn’t a „real value“ be a constant? And im not just referring to market prices here. You can write a perfect exam and get 10 different grades, depending on who evaluates you. The human mind isn’t objective, but we will be the ones to decide what has value and what not. If it wouldn’t be our subjective decisions that determine value, we wouldn’t even be here asking the question now, because we already knew.
To me Bitcoin might be priceless, to others it might be worthless. But then the sum of evalutions of all people create an average, that then determines, how much value is assigned to it at this moment in time, and from this a consensus starts to form and this thing will be chosen over things more often(the higher the average). The design behind Bitcoin is objectively superior to fiat for enabling universal trade(this is the main task of money), so we can assume more and more rational actors will deem it valuable in the future. But ofc there’s more factors on how people will evaluate it, each subjectively different and endless in variation and the sum doesn’t need to be rational.
In conclusion: it might be better to think about, if other people will find it valuable, than if the thing itself is physically valuable(even tho physical properties can influence other peoples perception), because people will form the value in the end.
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Fourth, the subjective theory of value is wrong. People can be defrauded. Theranos is a recent example of this. People can also be mistaken about value. The housing crash or the numerous failed investments in start-ups are clear examples of this. When people are defrauded or are mistaken, this means their belief in something being a value is wrong. Just because a lot of people believe that something is a value doesn’t make it so.
Subjective value doesn’t mean that an individual can’t overvalue something, in this case their individual subjective value was higher than the average value the market assigned to it, and they lost. Which strengthens the conclusion i made. The housing crash was also caused by assigning too much subjective value into the credibility of banks and fiat, something that wasn’t deserved. Assigning subjective value isn’t free, it has real life consequences and so individuals have to constantly reassign their evaluation for things to succeed. Because this is the basis of real life decisions in the end. The whole world can think im better than messi, but if we’re actually playing each other and he keeps beating me, this is likely to change. They can even bet money on it and loose. There is an incentive to be rational and objective, to not constantly loose. Giving trust for free can be an expensive gift, like in the housing crisis. If you trusted the market to not be easily breakable in the first place, your subjective decision was based on false assumptions.
There is both a difference, and there is also a similarities between them. First of all, Mona Lisa has a value right?
Note that there are different kinds of values. There's market value, personal value, intrinsic value, objective value that's measured with usefulness etc. Mona Lisa does have a high value, but not necessarily intrinsic or objective. On the other hand, bitcoin does have usefulness and IMO, its objective value is higher than its market value.Mona Liza and bitcoin is not a good analogy, in any case.
values and value are different categories.
I completely agree. I was talking about the economic value.think of the sentiment values(aesthetic/desire/demand/provenance) of art as the values(utility/function/features) of houses and bitcoin.
I've picked art because its economic value is questioned by many. (And Bitcoin value keeps being questioned, as you can see).I cannot argue that houses do hold economic value, but those value is not questioned (or at least not as heavily as art).
It is certainly a higher value than the paint used or the paper it was painted on, it has a value more than most other paintings I assume, don't know if it is the most expensive one, and yet it is certainly not the best painting in the world by a mile, we have seen much much better ones if we are talking about talent or how hard it is, there are paintings out there even leonardo da vinci can't paint, and yet Mona Lisa worths more than them, why? What makes it more valuable if that's the case? The answer to that, is the same as why bitcoin is this much valuable.
Fundamentally, bitcoin is not a currency
You're wrong, because it's been 2 years and I'm using it normally as a currency. And so are millions of others. Therefore, this assertion is invalid.notit scalable means of payment
That is also not true. We've developed off-chain solutions for this very purpose, such as the Lightning Network.and it is not a stable store of value
There's a big depends lying here. I'm buying bitcoin since the early 2020, and I can tell you that not only it has managed to store that value, but I'm also experiencing decent capital gains too. Someone who bought at $68,000 and wants to spend it currently has, definitely, not had the same luck.When someone buys gold, he understands very well that anyone will recognize and accept gold
This is false. I know no merchants that accept gold, except those who sell it (e.g., licensing pawnbrokers). On the other hand, bitcoin is accepted from a variety of merchants.The position of Bitcoin (crypto asset) is one level below fiat currencies, Let alone have intrinsic value, physical form alone does not exist.
It's far better than fiat currency in a number of ways, few of which I've written in this very page:I can now send money across the world, with no intermediaries, nearly instantly, with nearly zero fees in a privacy-oriented way. If you still find no value, you're willingly ignoring the benefits. The problem lies with you.
I believe the question of real value is not as simple as it looks. Do computers have real value? To many people, they do, but there are also the elderly, for instance, who live well without computers and to them PCs are worthless. Does a smartphone have real value? It does if you know how to use it, and if you live in a place where you have stable access to electricity. Then there's food, which generally has value. But meat is of no value to vegans, and a pack of rice isn't of value if you are in a war zone, living underground and unable to cook on fire. And then no more abstract things, like securities, debt trading and stuff. Do they have value? Not really, they're too far from the physical things. And does fiat have value? It doesn't, it's just numbers on a screen or a bunch of banknotes.
My point is, value is negotiable and dependent on the people and the circumstances. There are plenty of people to whom Bitcoin has no value, but there are also at least dozens of millions who believe in its value and are ready to exchange it for a certain value, which is all that matters.
My point is, value is negotiable and dependent on the people and the circumstances. There are plenty of people to whom Bitcoin has no value, but there are also at least dozens of millions who believe in its value and are ready to exchange it for a certain value, which is all that matters.
Fundamentally, bitcoin is not a currency, notit scalable means of payment, and it is not a stable store of value. If you ask Does Bitcoin have real value? I would answer Bitcoin fundamental value is ZERO.
Then the question arises again What exactly makes traders and investors believe Bitcoin has value? Here we need to explore and compare the nature of Bitcoin (crypto asset) with assets that are considered similar, such as gold and fiat currencies.
GOLD.
Gold has intrinsic value and can be used as a store of value so that the whole world accept gold as an investment asset. When someone buys gold, he understands very well that anyone will recognize and accept gold, because what he buys is a metal that has value.
FIAT CURRENCIES
Basically, fiat currencies like Bitcoin (crypto asset) has no intrinsic value. However, paper currency is believed to be a legal tender and a store of value because its existence is recognized by the state. So it's the country that makes paper currency worth it.
Conclusion from my post:
which determines whether or not there is value in the medium of exchange, not in the object being exchanged. The position of Bitcoin (crypto asset) is one level below fiat currencies, Let alone have intrinsic value, physical form alone does not exist. Bitcoin only has a digital form, recorded, and difficult to manipulate due to advanced blockchain technology.
Then the question arises again What exactly makes traders and investors believe Bitcoin has value? Here we need to explore and compare the nature of Bitcoin (crypto asset) with assets that are considered similar, such as gold and fiat currencies.
GOLD.
Gold has intrinsic value and can be used as a store of value so that the whole world accept gold as an investment asset. When someone buys gold, he understands very well that anyone will recognize and accept gold, because what he buys is a metal that has value.
FIAT CURRENCIES
Basically, fiat currencies like Bitcoin (crypto asset) has no intrinsic value. However, paper currency is believed to be a legal tender and a store of value because its existence is recognized by the state. So it's the country that makes paper currency worth it.
Conclusion from my post:
which determines whether or not there is value in the medium of exchange, not in the object being exchanged. The position of Bitcoin (crypto asset) is one level below fiat currencies, Let alone have intrinsic value, physical form alone does not exist. Bitcoin only has a digital form, recorded, and difficult to manipulate due to advanced blockchain technology.
Many people treat Bitcoin as if it’s a value. People trade a lot of money to buy Bitcoins. People spend money to manage their Bitcoins. People spend time to learn about Bitcoins. Given how much time and money are being spent to buy, manage, and learn about Bitcoins; it makes sense to get an answer to the question, “Is Bitcoin a real value?” That is, is it something that helps sustain human life and is to be pursued for that reason?
In my research, I’ve identified four reasons that people give for why they consider Bitcoin to be a value.
The first reason is it’s useful as a type of currency. In fact, Bitcoin’s biggest value proposition is that it can be used as an alternative to fiat currency. This supposedly gives users more freedom than they would otherwise have. For example, if someone in China wants to trade their yuans for dollars without having to deal with governmental control over the banking infrastructure, they can trade yuans for Bitcoins and then trade those Bitcoins for dollars.
The second reason is that it’s finite. This means users should be protected from a third-party (i.e., the government) creating an unlimited number of additional Bitcoins, thus, diluting its value.
The third reason is that it costs energy in the form of human labor and electricity to produce. This can be referred to as the labor theory of value.
The fourth reason is that people believe it’s a value. This can be referred to as the subjective theory of value.
But I’ve found these reasons to be invalid.
First, the fact that Bitcoin can be used as a type of currency cannot justify its value. For something to be useful as a type of currency, it must satisfy all the following conditions:
1. It must be fungible.
2. It must be easily divisible.
3. It must be easy to exchange.
4. It must be a long-term stored value.
Bitcoin does meet the first three conditions.
The fourth condition means it must already be considered a value before it can be used as a currency. If there isn’t independent support for its having value, the claim that Bitcoin has value is circular. See below:
1. Bitcoin is a value because it can be used as a currency.
2. Bitcoin can be used as a currency because it is a [long-term stored] value.
Second, the fact that Bitcoin is finite doesn’t by itself make it a value. Scarcity does not determine whether something is a value or not. Scarcity only determines the price of something that is already determined to be a value because of another reason. For example, certain forms of toxic waste may be scarce but that doesn’t mean the waste is a value.
Third, the labor theory of value is wrong. That is, the fact that something costs energy (human or machine) to produce doesn’t make it a value. Digging a hole and refilling it again consumes energy but doesn’t create anything of value.
Fourth, the subjective theory of value is wrong. People can be defrauded. Theranos is a recent example of this. People can also be mistaken about value. The housing crash or the numerous failed investments in start-ups are clear examples of this. When people are defrauded or are mistaken, this means their belief in something being a value is wrong. Just because a lot of people believe that something is a value doesn’t make it so.
For something to be a value, the reason(s) must be real. Let’s use the US dollar as an example of something that has a real value. The US is a society where producers specialize and trade their products with one another to get what they need to survive. The US government requires traders to give them US dollars whenever a trade occurs (i.e., taxes). This requirement is forced at the point of a gun. The US dollar is, at its core, a type of ticket that you must give to the government to allow you to live. That makes the US dollar valuable to your life.
While it’s true that the US government can dilute the purchasing power of the US dollar, that doesn’t mean that it has no real value right now. A potential is not the same thing as an actual. As of now, the US government still exists, the massive capital infrastructure under its jurisdiction still exists, and its ability to tax trades between organizations or people who use this capital infrastructure is still strong. This is the basis for the US dollar’s real value.
Bitcoin has no such basis or any other basis. Without a valid basis to justify why Bitcoin has real value, the proper default position to take is to assume that Bitcoin has no real value.
Bitcoin has more then one utility. In my research, I’ve identified four reasons that people give for why they consider Bitcoin to be a value.
The first reason is it’s useful as a type of currency. In fact, Bitcoin’s biggest value proposition is that it can be used as an alternative to fiat currency. This supposedly gives users more freedom than they would otherwise have. For example, if someone in China wants to trade their yuans for dollars without having to deal with governmental control over the banking infrastructure, they can trade yuans for Bitcoins and then trade those Bitcoins for dollars.
The second reason is that it’s finite. This means users should be protected from a third-party (i.e., the government) creating an unlimited number of additional Bitcoins, thus, diluting its value.
The third reason is that it costs energy in the form of human labor and electricity to produce. This can be referred to as the labor theory of value.
The fourth reason is that people believe it’s a value. This can be referred to as the subjective theory of value.
But I’ve found these reasons to be invalid.
First, the fact that Bitcoin can be used as a type of currency cannot justify its value. For something to be useful as a type of currency, it must satisfy all the following conditions:
1. It must be fungible.
2. It must be easily divisible.
3. It must be easy to exchange.
4. It must be a long-term stored value.
Bitcoin does meet the first three conditions.
The fourth condition means it must already be considered a value before it can be used as a currency. If there isn’t independent support for its having value, the claim that Bitcoin has value is circular. See below:
1. Bitcoin is a value because it can be used as a currency.
2. Bitcoin can be used as a currency because it is a [long-term stored] value.
Second, the fact that Bitcoin is finite doesn’t by itself make it a value. Scarcity does not determine whether something is a value or not. Scarcity only determines the price of something that is already determined to be a value because of another reason. For example, certain forms of toxic waste may be scarce but that doesn’t mean the waste is a value.
Third, the labor theory of value is wrong. That is, the fact that something costs energy (human or machine) to produce doesn’t make it a value. Digging a hole and refilling it again consumes energy but doesn’t create anything of value.
Fourth, the subjective theory of value is wrong. People can be defrauded. Theranos is a recent example of this. People can also be mistaken about value. The housing crash or the numerous failed investments in start-ups are clear examples of this. When people are defrauded or are mistaken, this means their belief in something being a value is wrong. Just because a lot of people believe that something is a value doesn’t make it so.
For something to be a value, the reason(s) must be real. Let’s use the US dollar as an example of something that has a real value. The US is a society where producers specialize and trade their products with one another to get what they need to survive. The US government requires traders to give them US dollars whenever a trade occurs (i.e., taxes). This requirement is forced at the point of a gun. The US dollar is, at its core, a type of ticket that you must give to the government to allow you to live. That makes the US dollar valuable to your life.
While it’s true that the US government can dilute the purchasing power of the US dollar, that doesn’t mean that it has no real value right now. A potential is not the same thing as an actual. As of now, the US government still exists, the massive capital infrastructure under its jurisdiction still exists, and its ability to tax trades between organizations or people who use this capital infrastructure is still strong. This is the basis for the US dollar’s real value.
Bitcoin has no such basis or any other basis. Without a valid basis to justify why Bitcoin has real value, the proper default position to take is to assume that Bitcoin has no real value.
What does the real value you mean? are you refer to the cost to mine Bitcoin? well that's complicated but you can calculate itself based on the mining rigs, the speed, the maintenance and how much the electricity you paid. However it's not the real value, the real value is decentralized, no censorship, and fast worldwide transaction.
The market law of supply and demand, and bitcoin has value because people or we use it and see it as something of value and also limited, and people use it as an investment and can also be used as a transaction tool.
If people stop using bitcoin in any form then its price will drop drastically and therefore will not earn anything.
Simple answer to that question.
If people stop using bitcoin in any form then its price will drop drastically and therefore will not earn anything.
Simple answer to that question.
That's very important to know where the real value of bitcoin comes from regardless of what kind of asset we are talking about the most important thing is supply and demand can change the value and price of everything, Imagine a share of stock from a famous company if none wants to buy it the seller should decrease the price and in the end, this will be worthless because of having no buyers and there can be the opposite of this story. Still, regarding bitcoin, because of many factors, the demand changes very fast and this can make the price a little bitcoin stable too.
However, the fact that I am anti-taxation and anti-fiat currency doesn't mean that I am oblivious to the fact that I must give the government those pieces of paper to live.
I'm not anti-taxation, you're just too gormless to understand me correctly. I'm anti-fascist, and become aggravated when I read phrases like:Quote
This requirement is forced at the point of a gun.
And:Quote
The US dollar is, at its core, a type of ticket that you must give to the government to allow you to live.
If you think the government is consisted of somewhat Gods who can enforce their sentiments unquestionably, restrict people arbitrarily and encroach every kind of civil right, then you're as anti-freedom as is humanly possible. It's justified to not see any value if you don't value freedom, privacy - human rights in general. But that's just your opinion of how this world works; and you can keep it, thanks.
There are millions of other people who don't think quite as you do. Those who value these virtues acknowledge why bitcoin is valuable. I don't gain censorship resistance whenever I use a credit card; the transaction can be reversed if the merchant is disapproved from the government. I don't gain privacy (or even pseudo-privacy) whenever I use a fiat currency online; financial institutions sell you out the sooner that is possible. I'm not protected by arbitrary inflation with fiat currency. You do get these with bitcoin; you have your rights respected.
And that's before we even begin on how it works more efficiently than the banking system. I can now send money across the world, with no intermediaries, nearly instantly, with nearly zero fees in a privacy-oriented way. If you still find no value, you're willingly ignoring the benefits. The problem lies with you.
Putting side the utility of gold (e.g., tooth fillings) and diamonds (e.g., cutting devices), art is fuel for the soul. Gold and diamonds are used to create objects that gives you motivation to do more. You enjoy art (and music) as an end to itself and not just as a means to an end. This idea of things being consumed as an end in itself applies to many things. Take for example a piece of steak. You can eat any cooked piece of meat to get protein for you body (means to an end). Yet you are willing to work more to get more money to spend on a nice piece of steak in a romantic restaurant. This is an example of fuel for the soul. Man is not just an animal. He is an animal with a *volitional* consciousness. The fuel is to give his violation to do more.
The same reasoning can easily be applied to bitcoin too, since for some people acquiring bitcoin is an end to itself and not the means to an end, such as to gain wealth in the future. People may enjoy this feeling of being able to control their money through cryptographic keys, or they may like the fact that their share in the total supply of money either stays the same or increases, that it cannot be diluted and taken away by powerful corporations.Quote
I disagree. There is the objective theory of value. That is, that which is valuable to your life is substantiated by objective fact. Take for example water. Water, in certain quantities, is objectively valuable to your life. You can pretend that it's not all you want, but you will be dead after a certain amount of time if you do not consume something that has water in it. This is an objective fact not subject to any subjective whim.
Things without which humans can't live are, by definition, objectively valuable. But they remain objectively valuable as long as in abundance. Once these objectively valuable things become scarce, humans start to value them subjectively, basing their reasoning on current circumstances. For example, water in the desert is valued more than that in places near rivers with fresh water. The objective value of water always remains the same - it helps you quench your thirst - but the subjective value fluctuates considerably.Jump to: