Topic: New Bitcoin Valuation Using Experimental Economics - page 2. (Read 2496 times)

Would you be open-minded enough to here an opposing viewpoint? 4 Arguments for intrinsic value (I don't even buy all 4, just ideas):

1)
Value is the ability of a person to satisfy his or her wants. While wants are subjective it still holds that there are ideal wants, ie what a person should want. When all people value a good as they should a price is reached as it would be in any other market situation and that value is the intrinsic value of the good. What it should be worth.

This heads straight for morality. However, upon finding morality we are still constrained by the human condition: The imperfect ability to ascertain, process, retain and act upon information.

If we had perfect morality, information and ability inside of a normalized market system (the hypothesis goes) we would be able to attain the ideal intrinsic value of a good. As evidence I submit that any economy with superior information, ability or morality results in superior economic performance.

2)
Value may be personally subjective but a market value is an objective phenomena in a free market because no person directly determines it. Over time market values approach a long-term equilibrium. That long-term equilibrium is determined entirely by objective economic law. In this sense it is objective.

3) Intrinsic value literally means what the thing itself is worth. While we say that a person's preference for something is subjective, we may also say that a person's opinion of the value of a thing is that person's appraisal of the good's intrinsic value.

4) Finally, are preferences ever really subjective or are they simply predetermined by complicated interactions of nature? In other words, does free will really exist? Personally I think it does but it is worth bringing up because many people who believe in "free markets" have no reason to think that free will really exists. If free will does not exist then all prices are non-subjective ie objective because even what we perceive as our own preference is really determined objectively.

Just food for thought. Let me know what you think.

nice conclusion op, I like your approach.  I did a little thought experiment and some back of the napkin calculations led me to think that if the equivalent of only 1% of the NASDAQ trillion dollar market cap were invested in bitcoin each would be worth something north of 10,000 usd.

Only to those who use it in those industries.

unlike bitcoin gold has an intrinsic value because it is used in several industries and this use and consumption of the raw metal give it that intrinsic value.  bitcoin, on the other hand is only worth the paper it's printed upon.

i wasnt going to say it....

Intrinsic value is nonexistent. All value is subjective.

Value in-itself.

what is intrinsic value?

The Mineforman website (http://mineforeman.com) was kind enough to allow me to write a blog using an experimental economic method. The article is called "Bitcoin Valuation as a Fiat Hedge With Information and Substitution Effects" and can be found below:

http://mineforeman.com/2013/05/14/bitcoin-valuation-as-a-fiat-hedge-with-information-and-substitution-effects/

For my calculations I did some new research that no one else has done on the rate of dilution of BTC value from competition and some other stuff. Unfortunately the data pickings were slim so the projection has a fairly wide confidence interval but I'm still proud of the fact that it covers new territory. The article links to another article with a highly detailed breakdown of the methodology, even including a downloadable copy of the spreadsheet I used! What do yall think?