Topic: gold vs bitcoin and intrinsic value - page 2. (Read 2419 times)

You are missing the point.

An object/ thing MUST! have intrinsic value in order to be MONEY! It also needs to be all the other things: divisible, scarce etc.

You can not SEPERATE golds pretty value and the fact that we like to touch it, FROM its money value. Without the its intrinsic value it would have NO money value.

The sooner you appreciate this fact the better, as the current PRICE of bitcoin will not last.

In a stateless environment no one would use any money. They don't need money, because stateless people are self-sufficient.
Take a look in the rainforest. Still the same as 100'000 years ago. No state - no money.

So you did not get the part of Austrian economy about money value, the exchange value component of the money's value.

Gold has some intrinsic value, nobody knows how large that component is, all we know is that gold is useful directly for some purposes. For its money function, that means that it's value can not fall to zero, therefore gold will always exist in society, and be ready for use as money again should the need arise. Bitcoin does not have that, should it go to zero for some reason, it might disappear forever.

The fact that gold has intrinsic value, means that as long as it is used as money, the other uses will have to suffer. Should gold not have any exchange value, it would be less costly and we might have used it in many more applications, where its use now not can be defended. Therefore it is best that money does not have intrinsic value. Bitcoin as money is more pure, only exchange value, and its hoarding harms no one.

Im amazed at the amount of Bitcoiners i see online, similar to you, who once believed in sound (austrian) economics, sound money, how money/currency comes about, etc but now say WELL NOT ANYMORE NOW THAT I OWN BITCOIN !!... lol deluding yourself because you want your 'thing' to succeed, and flushing everything you've learned over the years down to toilet. Not smart (in the long run), imo

top notch comment.

I think bitcoin at the moment is bought because its going up in price (despite 0 value). People buy bitcoin in hope of dumping it on another guy at a higher price. To me it sounds like a pyramid.

I would say greed, misinformation and the reason you give fuel this mania. Most people here are quite deluded.

Statements like: The Bitcoin network has value because I can transfer nothing (BTC) at a cost, are applauded.

They also like to say that nothing (BTC) is something because nothing (BTC) can be exchanged for something. The elephant they seem to ignore: Why should I exchange something for nothing?

Absolutely correct, in a stateless voluntary setting no one in their right mind would use paper as money.

Likewise, in a stateless voluntary setting no one would use bitcoin either because it is literally nothing and has zero value outside of passing it on to the next person like a hot potato.

Quite ironic, that they both require a State to have any 'value'. One because it's forced on you at the point of a gun, the other having deep ideological roots in hopes of tearing down the current system.

Gold is a very special element.  It is a solid.  It is unreactive, making debasement due to environmental factors improbable.  Its rarity is appropriate for use as a store of a value for a lifetime's work.  Not nearly as plentiful as iron and much more plentiful than, say, palladium.  It also has a very low melting point, making smelting an easy process.  The only other metal that comes close to these unique characteristics is silver, but even that is reactive.  This choice of gold certainly wasn't arbitrary or limited to aesthetics.

Some people think a currency backed by an asset makes the most sense.  I used to be one of these people.  I have come to believe that this simply makes the currency a slave to whatever affects the price of the underlying asset.  A currency backed by megawatt-hours will crash if there is a leap in energy-generation technology.  A currency backed by a metal will be subject to mine output fluctuations.  I believe it makes more sense to just adopt a currency which resembles bitcoin in its inflation/stagnation characteristics, divisibility, transferability, etc.  It is backed by .. nothing .. and in this I actually see strength.

This is false. The dollar is only successful because the US government forces it upon its citizens. Otherwise we would not accept nothing (paper) for something (goods).

Gold 2.0 is valued for its cryptologic beauty as well. (cryptology; from Greek κρυπτός, "hidden, secret")
Furthermore: The external usage of Gold gives the value. There is no such thing as an intrinsic value.

This is exactly correct too. Strange, why do I feel the need to utter it?

Well unlike bitcoins gold actually does have some intrinsic value. Gold is valued for its beauty in jewelry and its conductive properties in electrical/technological applications. A bitcoin on the other hand actually has no true intrinsic value. But neither does the dollar bill, and it is still a very successful currency.

Exactly right.

Nothing has value in and of itself. Before man walked the earth... fruit hanging from trees didn't have a value, because no one was there to give it a value. We give things a value based on different circumstances. When someone says that gold is better because it has intrinsic value.... this intrinsic value they are talking about is simply the fact that it can be used for things other than money. But are those things it's used for worth the cost of gold currently? When gold broke over $1800 was the intrinsic value also 1800? Of course not. All the intrinsic value adds is a pretend price floor. All it means is that gold is less likely to be worth nothing because it can be used for things other than a store of value. I say less likely because there are no guarantees. Even gold could be worth nothing in certain circumstances. Imagine if a group of people were trapped in a cave with a limited amount of water. What do you think would be worth more a bottle of water or an ounce of gold?  When you realize that all the intrinsic value of gold does is add a psychological effect to the money and not much more you see that it's somewhat pointless. It means that although you might lose 9/10ths of your value you probably won't lose all 10/10ths. Big deal. Having that psychological effect is a slight advantage in golds favor... but bitcoin has it's own advantages that are better than just mere psychological advantages because they happen to be real and concrete. A limited supply. A predictable amount created in the future. A very transparent and open source protocol for anyone to see the inner workings of. The list goes on.  I don't necessarily dislike gold... I think at one time it had a great usefulness. When money was tied to gold that limited the creators of money to how much they could print. That was pretty invaluable. But it's also ancient history.

http://www.reddit.com/r/Bitcoin/comments/1sizg7/gold_vs_bitcoin_and_intrinsic_value/