This is an interesting view on things. A philosophical thing really.
Does water have its actual use, intrinsic value - well, yes, but it is valued much less then it's worth.
Does gold have its actual use? Yes, as an electrical conductor and for luxury.
Does paper money have its actual use? Yes as a legal tender for payments.
Does Bitcoin money have its actual use? Yes, as a store of value and sometimes as a payment instrument.
We could speculate that Bitcoin or any other money is different because they don't have a physical representation. Where.... they actually have... if you know how transistors function...
Hence, I actually agree with you, I think that in the 21st century we should really be way past the discussions whether we should value only the things that we can touch.
Topic: What is Bitcoin,paper money and Money has intrinsic value (Read 127 times)
Does it have intrinsic value? People ask me what Bitcoin is backed by. The answer is it’s only valuable because people value it. What is gold backed by? The answer is the same. It’s only valuable because people value it. There is no central planner proclaiming that Bitcoin is valuable. It’s backed by itself, and that’s what intrinsic value means. Some people value it for the potential anonymity, others because it can be transferred over the internet without fees, others for the peace of mind that their account can’t be frozen by central planners. Whatever reason people value Bitcoin, it is for characteristics inherent to its design, not outside it.
Bitcoin easily satisfies, satisfies one that could be disputed, and doesn’t satisfy one. And the one it fails to satisfy is the one I’d argue is an unnecessary requirement.
What if we compare that with paper money? Paper money is not metal or food. Because of inflation it is not durable, but devalues over time. Its value is not intrinsic, but comes from legal tender laws that obligate its use. Its price is not determined by supply and demand, but set by central planners. Paper money only fulfills two of these requirements. It is abundant, and it functions as a medium of exchange, and even then only because it is required by secular law.
Bitcoin is a digital currency that is circulated within a world-wide peer-to-peer network. The network contains a public ledger of all transactions called the Blockchain, and private balances associated with user created accounts. While processing transactions Bitcoin minors attempt to solve a difficult math problem. When the solution is discovered a new block is created in the Blockchain and the minor is rewarded with new Bitcoins, which they distribute into circulation by transacting with other users. The production of Bitcoins decreases over time at a fixed rate, and can never by design, but more importantly it can’t be manipulated by central planners.
Each public transaction has a corresponding private key so only the recipient can make the next transaction. Transactions are broadcast to the network, recorded in the ledger, and a new key is created giving the recipient effective ownership of the Bitcoin even though the information technically exists on every computer in the network.
The result is that Bitcoins can be exchanged freely by anyone in the network, even through national sanctions. This can be done without any central bank or government. It can be done from anywhere in the world that has access to the network. And it can potentially be done anonymously.
Bitcoin easily satisfies, satisfies one that could be disputed, and doesn’t satisfy one. And the one it fails to satisfy is the one I’d argue is an unnecessary requirement.
What if we compare that with paper money? Paper money is not metal or food. Because of inflation it is not durable, but devalues over time. Its value is not intrinsic, but comes from legal tender laws that obligate its use. Its price is not determined by supply and demand, but set by central planners. Paper money only fulfills two of these requirements. It is abundant, and it functions as a medium of exchange, and even then only because it is required by secular law.
Bitcoin is a digital currency that is circulated within a world-wide peer-to-peer network. The network contains a public ledger of all transactions called the Blockchain, and private balances associated with user created accounts. While processing transactions Bitcoin minors attempt to solve a difficult math problem. When the solution is discovered a new block is created in the Blockchain and the minor is rewarded with new Bitcoins, which they distribute into circulation by transacting with other users. The production of Bitcoins decreases over time at a fixed rate, and can never by design, but more importantly it can’t be manipulated by central planners.
Each public transaction has a corresponding private key so only the recipient can make the next transaction. Transactions are broadcast to the network, recorded in the ledger, and a new key is created giving the recipient effective ownership of the Bitcoin even though the information technically exists on every computer in the network.
The result is that Bitcoins can be exchanged freely by anyone in the network, even through national sanctions. This can be done without any central bank or government. It can be done from anywhere in the world that has access to the network. And it can potentially be done anonymously.
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