Topic: Does Bitcoin have real value? - page 4. (Read 1045 times)

I agree with you, because many countries that made bitcoin legalized in their various countries came to discovered that bitcoin has a great value like their fiat money. Many people has achieved a lot of income from bitcoin investment which many people are still planning to achieve more, because the price just dropped down to $20,000 for those that missed the opportunity to buy bitcoin to use this opportunity to buy more of bitcoin and hold for the price to increase higher before they can sell to make a passive income.

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.



I invite you to take a look at this argument map  that I've created to help me write this article. I look forward to feedback on additional arguments for why Bitcoin has value that is not dependent on circular logic or invalid theories of value.

https://app.reasonspace.com/maps/905?token=1e709bb0-c732-4077-85a4-e0a64af89098


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.

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Odd. I would've made the assumption that if someone wrote what I wrote that the writer is anti-taxation and anti-fiat currency. 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 am also not oblivious to the fact that ANY currency requires the sanction of the government. That is, the government can easily make that currency next to useless by banning it. This means contracts denominated in that currency is unenforceable. You cannot build large enterprises relying on unenforceable contracts. All that you can build are criminal organizations where you need to hire your own mercenaries to enforce your contracts.

Bitcoin, even if it has some value that I've yet been unable to identify, is not a solution to government force. The only solution is philosophical in nature. But that's a different matter all together.

Yes, the value is generated out of trust. If someone interested in bitcoin believe that spending certain amount on bitcoin is worthy, they'll pay for it. In general it is possible only out of the trust. The limited supply and the halving features increase the demand. This means when the supply is limited and unable to fulfill the demands the price will increase.

The usage on multiple needs too generate value for bitcoin. All it started as a giveaway token and slowly it came out through different forms to reach the present value. Here Laszlo Hanyecz have a important role in giving value to bitcoin.

you're not going to be very well received by alot of people here on the forum but you make a very well reasoned intelligent set of points. and i think they are valid. i couldn't have said them better myself.

that's until the countries start making it a crime to "launder" money and not report what you're doing. if you keep ignoring their rules then, you become a criminal.

Finite would be something that is not sub-dividable. But the thing about bitcoin is, they can keep subdividing it for as long as they want to. If need be they could oneday subdivide it into sub-satoshis. Milli, micro, pico, etc. So it really isn't finite in that sense. You can't really divide the us dollar into something less than a penny. If bitcoin couldn't be divided into anything smaller than a satoshi then it would be "finite".


What type of human labor does bitcoin need ? I'm not aware of any. But it does require electricity but not to produce it but to secure it. Not sure the electricity expense is in line with the market value of it though. I guess that's another story.

Good one! You've identified all the problems with bitcoin in a nutshell. This 4th reason is maybe the biggest problem bitcoin really has. That's why for example it used to be $60,000+ and now it is only around $20,000. it's not backed up by anything.

That's right and Theranos and similar companies cannot be compared to bitcoin. Bitcoin has no CEO, no front man to make promises. It cannot lie about its performance, we all see it and can analyze the blockchain if we went.
We weren't persuaded by anyone to invest in bitcoin, we did it because we saw value and uniqueness in it.

OP, what is "real value"?
People gave you an example of diamonds and gold, but there were many more similar cases in history. People were using seashells as a medium of exchange which proves that bitcoin doesn't have to be valuable to be used. Its use and trust in the system makes it valuable.

What persuaded me to support bitcoin was mainly decentralization. I had enough of banks deciding what I can buy and reporting my finances to various authorities. I want to be able to travel with my money without having to confess and explain myself every time. I want to be able to spend on whatever I choose to because it's my hard earned money we're talking about.

And after stating all that is contained in OP, you expect usto just dump bitcoin or cryptocurrencies and then, move on with our lives with fiat and be okay with it. By the way,

Isn't what is contained in the quote above contractive? Looking at point 4 and 2 as at above, following your introductory statement.
I think you @OP seems to attach value of to what is tangible and have got government backings. Anything other than that is banned to fail from your view point as I see it. I may be wrong and stands to be corrected but, that's what I can deduce from that and I don't seem to agree.

Intangible things have value too and the value to a commodity is largely based on acceptance by the masses. Perhaps I refuse to buy at your "Ask" price, it simply means I don't value it as much and you refused to sell at my "Bid" price simply means, you value it far more than I do value it. Yeah, demand and supply sets the price but, no government backings doesn't mean failure.

I don't think that existence of fraud disproves subjective theory of value. From the point of view of defrauded people, they are having a good deal, and if they knew the truth, they would change their evaluation.

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.

It’s not circular your assumptions are just off. The two criterias for a store of value are:

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.

There’s a good theory of what actually becomes money by carl menger, he noticed that different goods have different degrees of saleability(marketability, how easy it is to do trade with a good), the most saleable good becomes the dominant money naturally, because it will become easier and easier to exchange with it. (That’s why fiat replaced gold).

Money wasn’t founded by the state, it came into play naturally before all of this. There’s different degrees of quality of money, and if a central authority starts abusing it, it looses its beneficial function for everyone(Fiat). These are things menger predicted generations ago.

Your toxic waste is scarce and durable, but terribly hard to do trade with, so the market won’t use it as money and it doesn’t get more and more value assigned to it. Bitcoin is scarce and durable, and becomes easier and easier to do trades with over time(the more the acceptability rises), so it’s on its way to become more dominant money, and will have more value assigned to it over time. We’re still in the first stages, that’s why the price will keep exploding, until it’s relatively stable.

Bitcoin is becoming the highest quality money we have, and all that naturally, no state is needed for this. If you don’t get why it’s winning, you didn’t compare it to other forms of money yet.

The US dollar is not adherent to the gold standard anymore. There is no value to USD other than the U.S. government willing to support its usage. You can only trust USD as much as you can trust the U.S. government, which is to say very little.

Bitcoin is supported by the free market, so it isn't actually any different from USD in your example. The U.S. government has already diluted the value over 90 percent since the creation of the federal reserve some number of decades ago. If value is siphoned off so quickly with a guaranteed decrease in purchasing power yearly due to inflation, how could you articulate that USD has real value while Bitcoin doesn't?

If I can go into the market and trade my Bitcoin for goods and services, it has value.

But, it's not scarcity that makes it valuable; it's the scheduled inflation, the transparent monetary policy, part of which is scarcity. Bitcoin could, normally, operate with tail emission which would mean, it'd inflated to infinity. It's the absence of arbitrary inflation that matters.

Don't take this personally, but the way you've formed how this world works is honestly gloomy and hopeless the least. It's not a surprise you don't find value in bitcoin, because you neither find value in freedom, privacy and censorship-resistance either.

Fortunately for the rest of us, this world is consisted of people who perceive things in a different way than you do. There's an admiring number of people who disagree with your assertion. Bitcoin is, therefore, valuable for those.

With the emergence of CBDC the government will become more and more powerful in controlling us, from the CBDC they can control all the supply and track all of us. With fiat, it can be a bit more difficult to manage or control the finances of each individual but with CBDC, they have full control of our finances, what we buy, how much we hold, and where we send money...For those looking for privacy, CBDC will be much worse than fiat.

Interesting topic and arguments. To me something has value if it can help people do things that they can't do right now, or it can help people do things that they can already do now, but in a much more efficient way.

Some examples:

- the car has value. Yes, people could go around with horses before, but the car allows people to move more efficiently;

- the iPhone has value. Yes, people could make phone calls with mobile devices before, but iPhone was the first incredibly advanced device that expanded what people could do via mobile.

What about Bitcoin. Bitcoin seen at the early stage definitely had value in its electronic currency version. People at that time could transfer money online (wire transfer, maybe PayPal), but there was no way to transfer money peer to peer all around the world almost instantly. Now there are tons of apps that allow the same thing: Venmo, Revolut, etc. Yes, it's true that Bitcoin allows you to transfer money without the need to create accounts on other platform, it's true that nobody can stop you from using your Bitcoins, etc, but I would not say that this changes the transfer of money much more efficiently...quite the contrary.

Then we are left with something that definitely has a lot of potential (think about the blockchain), but we are still missing, in my opinion, a true user case that will improve how we do things more efficiently.

Your first two points muchly applies to the fiat currency economy while i so much go for the third and fourth point in which i think they are best applicable for bitcoin, what you see in bitcoin may not necessarily be what others exactly see in it but bitcoin value remains valuable, appreciative and profitable enough for everyone who key into using it the right way, it has been used for store of value, why is because anything that has the tendencies and capability to rise in due time is worth investing on, while its acceptability is global and fully decentralized.

This is the only condition that you need for something to have value and a valid basis too.OP going on giving a detailed explanation,but do you think most people will care? If so,you wouldn't have see many people try to earn,trade or invest in bitcoin.
Even if people can be mistaken about value,it doesn't change the fact that they have valued bitcoin.

I completely agree. I was talking about the economic value.


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).

NeuroticFish  i agree with your example..im just adding more context

this is more of a reply to 'reasonspace' to add more detail to NeuroticFish's  mention of art having value

Art has value(economic). the acquisition cost people wont sell below. but the next auction PRICE is not the value.
art has values(aesthetic/desire/demand/provenance) ..dont confuse the (economic) value with values(the aesthetic/desire/provenance)

values and value are different categories.

think of the sentiment values(aesthetic/desire/demand/provenance) of art as the values(utility/function/features) of houses and bitcoin.
the values. help cause some speculation of the price above the economic VALUE of something comparative on the market.

the values(aesthetics/desire/demand) of a van gogh increase the price above the value of a lesser known artist.

yes people can be duped into buying things that they see as having values(aesthetics/utility/desire/demand) and pay a premium for it. and then get slammed when they see the values are none existent. like the theranos company that faked values(utility) of diagnosing hundreds o diseases with a single drop of blood.

but the underlying value(economic) is not the same number as the price paid due to the values(sentiment of the utility/benefit/features aesthetics)

value is not found from those 4 things..
bitcoin is more then a currency.. bitcoin has function and feature of utility beyond just being a currency
bitcoin is not just the unit of account. its also the tool for the unit. a tool that can do many things


people trade houses.. but that does not mean a house is just a currency. a house does more then get traded

houses are not fungible. different houses are treated differently and not easily convertible. there is no like-for-like swap
houses are not divisible.
houses are not easy to exchange

so houses fail the first 3 rules too

..
bitcoin does condition 1
1btc is 1btc. there are mixers that swap 1btc for 1btc. every transaction 'destroy' a utxo of an amount and create a new utxo of another amount with a different owner. so it passes condition 1
yep you can easily convert 2 utxo of 0.5btc to be 1 whole btc. thats the most basic feature of the bitcoin blockchain.
so it passes condition 1

bitcoin does condition 2.. there are 8 decimals. it can be easily divided 100,000,000 times
so it passes condition 2
.
bitcoin does condition 3
its easy to exchange. every transaction on the blockchain is an exchange of ownership.
so it passes condition 3.

as for long term value
.. stop looking at the PRICE.
when you buy a house or gold. there are 2 lines you need to look at.. one is not easy to spot.

take the real estate market.
dont just look at the house price.. instead look at the houses in the region to compare.. (real estate buzzword: comps) .. and then evaluate the house price in comparison to see if the PRICE is good and near VALUE(lowest comp) or if its being sold at a premium(above/at highest comp)

a house PRICE is not the value. the regions 'comps' is the value and although you might buy a house above 'comps'(value) the store of value still exists via a underlying value everyone in the region refuses to sell below.
(the bottom line cheapest 'comps')

even in the housing market. dont expect guarantee house price profits.. because the market can rescind and return to the lowest comps of recent years. buying a house at a premium does not make it great value to get great ROI sooner.

bitcoin has a 'comp' too
take the lowest cost to mine on the planet. the cost no one else can acquire bitcoin for..
thats the 'comp' value.
then take the periodic ATL (the all time LOW.. not the high.. the LOW) of every say 2-3 years (normally 4 year cycle)
and thats the value line below the price.

you can use this line to then evaluate if the PRICE is near VALUE or if its at premium

..
if you think bitcoin has no value then you must think house prices have no value.
bitcoin is an asset. its more then a traded property. it has function it has utility it has features that make it have use.


bitcoin can do things far easier then fiat.
you can move value between addresses without needing to request a bank authorise it.
you can set up an offshore wealth store without needing lawyers, business registrations, bank account registrations
you can set up family trust funds without bank managers, lawyers and contracts with middlemen
plus many many more things you can do with bitcoin

You are wrong.

Art holds value, although many don't recognize that (remember that for some a banana duct-taped to a wall is art, remember how expensive is an original painting, when a copy looks just as good). And it's not at all easy to exchange.
Imho gold is so expensive not because its utility, but because of its scarcity and for being hoarded.
In the history people have been using shells basically in the same way as (gold) coins or bitcoin.

You seem to be praising the modern money. You know that it's only printed paper (or whatever) that has value only because the central bank of your country says so. I won't insist on the fact that they're lying and because of inflation the value you're paying for that paper (i.e. work done) is not the same as the value you receive for that paper when you spend it. But what if your country's central bank, for various reasons, cannot honor its word? I know, it's not very likely, but imho it proves my point:

something holds value if you and a big enough number of other people sees it as valuable.

As simple as that. And yeah, Bitcoin meets this condition.

You are wrong.

Certain form of waste is scarce? If scarce, that means people are demanding for it, which makes the waste useful and it will be costly because of the demand for it. But, a waste is not costly, or even not useful (have not cost) because people do not demanding for it.

If you meant this, you also meant that the law of demand and supply is wrong, which means you only want to change part of economics to your own idea of wrong.

Neither gold nor diamonds, for example, help sustain human life but they, for some reason, have maintained their value for thousands of years.

Are you talking about P2P trades between independent individuals? Because otherwise using different fiat on/off-ramps still requires interaction with the banking infrastructure controlled by governments. Bitcoin allows users to make exchanges trustlessly without asking permission or involvement of intermediaries. You can do the same with cash but only locally, whereas with bitcoin it is possible to conduct international trades.

Its finite supply is protected by a decentralized distributed consensus and this is what really matters here.


Bitcoin doesn't have value because it is mined, bitcoin is mined only because it has value.

People expect they will be able to exchange bitcoin for goods in the future because money itself is only useful when exchanged for something else.


Today, bitcoin is mostly seen as a store of value or nascent store of value that gradually accrues its value. When it is established as a store of value and its price stabilizes, it will be seen as a medium of exchange and unit of account.


Never before have we seen an asset that is both digital and scarce. The very fact that bitcoin is essentially a discovery of digital scarcity makes it more valuable than other digital assets.



I agree that the labor theory is fallacious and misleading. But again, "Bitcoin doesn't have value because it is mined, bitcoin is mined only because it has value."

You contradict yourself. If the labor theory is wrong, then the only explanation of the nature of value is that it is purely subjective.

TL;DR Bitcoin is based on proof of work, whereas the dollar is based on proof of war.