Topic: Regression theorem & Bitcoin revisited (Read 5448 times)

The idea is that Bitcoin is a proof-of-work token using the same protocol as Hashcash ( https://en.wikipedia.org/wiki/Hashcash ) which itself is/was a scheme for limiting spam, wherein inclusion of the Hashcash token would cost the user something (CPU time).  Individual emails would be cheap to send, but mass emails would be expensive.  Under this system, email receivers could dismiss email that included no POW tokens, and senders would thereby be required to include them. 

In other words, you would not be able to get an email through without the token... you would need them in order to send email.  (Also, most users would not find it convenient to generate these tokens on their own.  They would prefer to buy the tokens from a producer.)  This is the pre-existing commodity value of the tokens, that they are a necessity, or have a real-world utility, as tokens that legitimize email.

This is a cost, not a value.
But, maybe, it could be interpreted as a "direct use value".

If instead of asking "what is the direct use value of bitcoin" we ask "what is the direct use value of a Proof of Work" we could be on something.

The direct use value of a proof of work is the knowledge the work needed limit the output of the proves offered.

https://en.bitcoin.it/wiki/Proof_of_work

This is the "pre-existing commodity value" of Bitcoin.

If the direct use is small enough, for humans, it is like it is zero.
For example, the exchange value of a crumb of bread is zero, because no one would sell it or buy it, because the value is too small to care.

2) No, because Direct Exchange Use is to exchange something I have with something someone have to consume it (strawberries would be eaten, an hammer would be owned and used to hammer, etc.). I exchange my fishes for strawberries because I want eat strawberries and I value the fishes I exchange for strawberries less than the strawberries I obtain in exchange (the guy selling strawberries prefer the fishes he receive over the strawberries he part).

1)A> There is no Direct Use satisfied by me if I give you a BTC and you give me a BTC in exchange. If the direct use is simply the exchange, then exchanging anything would satisfy it; the value of the things exchanged and what would be exchanged would be irrelevant.

1)B> If you only give me a BTC, this is a gift, not an exchange, and gifts could have any or no value for the giver or the receiver.

I think that exchange value is the only value for a bitcoin. If you can find some direct use value, it's going to be small.

Same for a dollar bill. Mostly exchange value, miniscule direct use value.

Gold has some direct use value in jewelry and electronics. Probably more exchange value.

Minimal direct use value is a plus for money, as saving doesn't harm any direct use.

So how do you deal with situations where the direct need that is satisfied in 1) is its use in exchange in 2) like in bitcoin?
Can you separate these concepts in bitcoin?

Stuff could have:
1) "Direct Use" (it is valued because I could use it to directly satisfy my needs/wants) --> The first ten fishes have direct use value because I can eat it
2) "Direct Exchange Use" (it is valued because can be exchange for something I can consume) --> The second ten fishes have direct exchange value because I could exchange them for strawberries).
3) "Indirect Exchange Use" (it is valued because I could exchange it for something I'm not interested per se but I could later exchange for something I really want) The third ten fishes have indirect exchange value because I can exchange them for gold and the I can exchange gold for eggs - the guys with eggs (are they guys?  ) don't want my fishes but want gold.

I think our definitions are close.
Does the difference matter?

"Intrinsic value: What the money stuff is useful for to you directly
Exchange value: The added value the money stuff has because it can be exchanged for useful things."

But now consider bitcoin.
Bitcoin is a means of exchange.
So i am tempted to call the exchangebility of bitcoin an intrinsic feature.
But that is called exchange value, not intrinsic value.

I decided in the end that exchengeability is not part of intrinsic value because the exchangeability is based on some other intrinsic value.
Bread feeds you. That is intrinsic to bread.
The fact that you can use bread in a barter is because it has this intrinsic quality.
So far ok. This is what you said before.

But now take a system like bitcoin.
It is an information system designed to be a currency.
So you can say the currency aspect (and all its properties) are somehow intrinsic to bitcoin.

The question i have is, how do you separate the intrinsic value of bitcoin from its exchange value?

And here is another.
Let's assume you look at a recipe on your screen.
It is a recipe for beer and you value it for that.
Can you call that intrinsic value?
And to what do you assign the intrinsic value then?

Can you even assign intrinsic value to pure information and what are the implications?

Please use the correct definition of intrinsic in the realm of money. You find it upthread.

I want to know what you were arguing.
I want this because it is not trivial to define such a word and i may be wrong.
The easiest way to get to the bottom is to mash up different viewpoints and see what survives.

But you gave yours and for argument's sake I agreed with it. What more do you want?

How can i ever understand your standpoint if you don't want to give me a definition?

You want to actually discuss this but you don't want to give the definition of a word you use despite me asking for it several times?

You seem to really appreciate the semantic stuff but you fail to address even the definition.

Really? So what's the point in doing that if you don't assign any value to it? Random acts of your brain?

BTW you are starting to make more and more absurd arguments about semantics and I'm starting to really lose interest discussing this with you.

For arguments sake, let's use your definition.

I regularily explore mathematical spaces through graphic representation.
I calculate the hell out of things and then i throw away the results without assigning value to them.

How do you define Intrinsic in an economic context?

Ok, and how does mining bitcoins when only a small group of programmers ran Bitcoin back in 2009 and 2010 not fit that definition? They weren't trading those bitcoins for anything and yet they were actively spending labor to acquire them. Are you going to tell me they didn't see some sort of value in them even though they couldn't trade them for nothing?

Gold is special in this respect.
Gold is scarce (used to be a lot more scarce than now).
That, combined with it being shiny means you get social status from owning it.
This is a 'need' that is hard to satisfy.