If bitcoin has no value, and it is pure product of imagination, you should be able to change it at your will ... BUT as far as I know you cant change the hash, blockchain, the encryptions and on and on
So ...
Topic: Why Bitcoin cant be Money. (Read 3747 times)
1) Properties/ Requirements of Money
Money: intrinsic value (aka utility of the commodity), divisible, fungible, scarce.
Money: intrinsic value (aka utility of the commodity), divisible, fungible, scarce.
Stopped here. Money doesn't have to have any intrinsic value.
5 euros have no value if not the value that derives from its ability to purchase things. The same ability that also bitcoin has.
Best regards,
ilpirata79
If my guess is wrong, then why you kept silence all that time and all of a sudden came back arguing with and trolling everybody around here with that nonsense? Have you been walked out on or just fired?
No. I have recently but some thought into what bitcoin is and if I want to buy it. I shared my conclusions with this board. Apparently having anything but a bullish opinion on bitcoin is trolling. So be it.
You seem to have completely ignored my recent note (in another thread you created in this forum) that even if bitcoin didn't have value at all as you say, but nevertheless actually helped you earn some dollars through speculation (by "dumping it on the next guy"), would you consider it as having been useful to you?
Starting to see the value?
No. Even if you transfer nothing from peer to peer, anonymously (not possible with bitcoin), at a (low) cost and instantly, its still nothing. I cant do ANYTHING with Bitcoin except dumping it on the next guy. you should tell this to that guy who bought a sport car in the lamborghini dealership last week
porc got stuck in the longs with gold and silver. And now he tries to persuade people from using bitcoins because they would attract dollars that otherwise might have flown into precious metals. So don't take his bursts of anger too serious..
If I would be convinced of the idea behind bitcoin, I would have transferred some of my wealth to it. The fact is, that I am not convinced. Now you can pretend like, the only reason I am not convinced, is because I am angry. Quite the opposite. I looked at it totally unemotionally with the question if I need to buy some, if it is a viable alternative. My conclusion is just different from yours. I dont feel threatend if you dont like my silver.
If my guess is wrong, then why you kept silence all that time and all of a sudden came back arguing with and trolling everybody around here with that nonsense? Have you been walked out on or just fired?
No. I have recently but some thought into what bitcoin is and if I want to buy it. I shared my conclusions with this board. Apparently having anything but a bullish opinion on bitcoin is trolling. So be it.
it's a very nice post and obviously a lot of thought went into it, but the bottom line is, bitcoin is money. People will call it money and use it as such, best thing to do is accept it.
Starting to see the value?
No. Even if you transfer nothing from peer to peer, anonymously (not possible with bitcoin), at a (low) cost and instantly, its still nothing. I cant do ANYTHING with Bitcoin except dumping it on the next guy. you should tell this to that guy who bought a sport car in the lamborghini dealership last week
porc got stuck in the longs with gold and silver. And now he tries to persuade people from using bitcoins because they would attract dollars that otherwise might have flown into precious metals. So don't take his bursts of anger too serious..
If I would be convinced of the idea behind bitcoin, I would have transferred some of my wealth to it. The fact is, that I am not convinced. Now you can pretend like, the only reason I am not convinced, is because I am angry. Quite the opposite. I looked at it totally unemotionally with the question if I need to buy some, if it is a viable alternative. My conclusion is just different from yours. I dont feel threatend if you dont like my silver.
If my guess is wrong, then why you kept silence all that time and all of a sudden came back arguing with and trolling everybody around here with that nonsense? Have you been walked out on or just fired?
Starting to see the value?
No. Even if you transfer nothing from peer to peer, anonymously (not possible with bitcoin), at a (low) cost and instantly, its still nothing. I cant do ANYTHING with Bitcoin except dumping it on the next guy. you should tell this to that guy who bought a sport car in the lamborghini dealership last week
porc got stuck in the longs with gold and silver. And now he tries to persuade people from using bitcoins because they would attract dollars that otherwise might have flown into precious metals. So don't take his bursts of anger too serious..
If I would be convinced of the idea behind bitcoin, I would have transferred some of my wealth to it. The fact is, that I am not convinced. Now you can pretend like, the only reason I am not convinced, is because I am angry. Quite the opposite. I looked at it totally unemotionally with the question if I need to buy some, if it is a viable alternative (after all I want to store my wealth in great assets, if bitcoin would fit I would have bought it.) My conclusion is just different from yours. I dont feel threatend if you dont like my silver.
Starting to see the value?
No. Even if you transfer nothing from peer to peer, anonymously (not possible with bitcoin), at a (low) cost and instantly, its still nothing. I cant do ANYTHING with Bitcoin except dumping it on the next guy. you should tell this to that guy who bought a sport car in the lamborghini dealership last week
porc got stuck in the longs with gold and silver. And now he tries to persuade people from using bitcoins because they would attract dollars that otherwise might have flown into precious metals. So don't take his bursts of anger too serious...
Starting to see the value?
No. Even if you transfer nothing from peer to peer, anonymously (not possible with bitcoin), at a (low) cost and instantly, its still nothing. I cant do ANYTHING with Bitcoin except dumping it on the next guy.
you should tell this to that guy who bought a sport car in the lamborghini dealership last week
Starting to see the value?
No. Even if you transfer nothing from peer to peer, anonymously (not possible with bitcoin), at a (low) cost and instantly, its still nothing. I cant do ANYTHING with Bitcoin except dumping it on the next guy. Again, I can only refer to the post above yours: Money has intrinsic value, its essential for its functions.
However I do find it interesting, that you you try SO HARD rationalizing the fact that you are transferring NOTHING. You yourself know deep down, that accepting NOTHING for SOMETHING is unacceptable and that NOTHING cant be money. I dont want to repeat myself so I will refer to the post above yours I made.
Why is Bitcoin valuable?
This is perhaps the most important topic to address, as nothing else matters if Bitcoin has no value. What makes Bitcoin worth anything? Isn't it just "fake"? Isn't it just a made-up pretend virtual currency? Many say, "I can't hold it, I can't see it, and thus it's artificial and not worth my time." Let's challenge this understandable initial reaction. Let's demonstrate why Bitcoin is valuable, and very much worth one's time.
Financial privacy has long been symbolized by the notorious "Swiss bank account." Yet, anyone with a Swiss bank account has to trust that bank, and as we've seen in the last couple years, "bank privacy" even in Switzerland is a myth - banks there have been bending over for the US government and divulging customer information. So imagine having a private, numbered Swiss bank account, but without having to bother with the Swiss bank itself. That is Bitcoin. Instead of placing your trust in a regulated bank governed by fallible humans, Bitcoin enables you to place your trust in an unregulated cryptographic environment governed by infallible mathematics. 2+2 will always equal 4, no matter how many guns the government points at the equation.
Bitcoin is thus the only currency and money system in the world which has no counter-party risk to hold and to transfer. This is absolutely revolutionary and you should read the preceding sentence again. Gold advocates will point out that physical gold bullion has no counter-party risk, but that is only true for storage in your own home. Store it in a vault or bank and you have counter-party risk. And sending gold? You have to trust all sorts of people if you wish to transfer your gold somewhere else or spend it across distance.
Bitcoin means complete ownership of money both in storage and transfer. Nobody can prevent you from having it. Nobody can prevent you from spending it. Even if one's home is broken into, or even if the government issues a "confiscation order" (as they did with gold in 1933), one's Bitcoins are perfectly safe. Try fleeing a country with $1,000,000 in bullion without the government knowing about it. Easier said than done. With Bitcoin, it's almost easier done than said - you could put $1,000,000 of Bitcoin on a USB drive, or even write the private key on a piece of paper, or just email the wallet file to yourself to be retrieved outside the country.
Starting to see the value? Never in the history of the world has an individual had this ability. It is unprecedented.
No really, WHY is Bitcoin valuable???
At this point, skeptics should say, "okay fine, you can store and spend Bitcoins without interference, but what gives them initial value? Why do they have a price?" It's a very good question, and even expert economists have struggled with the answer.
But really, the answer is simple. Bitcoins have value because A) they are useful and B) they are scarce. Combine those two attributes in any asset and you will discover it has a price. The moment the first Bitcoin was traded to someone in exchange for something else, an exchange rate (market price) was established. Subsequent exchangers agreed or disagreed with that rate, and made further trades accordingly. Bitcoin thus spontaneously developed a price, as do all things in an open market if they are sufficiently useful and sufficiently scarce.
Let's look at value a little further, because it's a contentious issue with Bitcoin. There are many (including Paul Krugman) who believe Bitcoin isn't worth anything and is no more than a speculative bubble fad.
I wouldn't expect Krugman to "get it," but wiser/real economists need only observe metals to start understanding why Bitcoins have value. After all, any strong advocate of gold or silver as money should hopefully understand why these metals should be money. The answer is that these metals tend to be chosen in an open marketplace as money, because their specific properties make them useful as a means of exchange. It is the properties of gold and silver—unique to these metals—which make them excellent money. They are scarce, fungible, uniform, transportable, have a high value-to-weight ratio, are easily identifiable, are highly durable, and their supplies are relatively steady and predictable. Contrast other goods like chickens, or seashells, or sand, and you discover that none of them are as good on the above attributes as precious metals. Chickens can't well be cut in half or recombined, seashells are not uniform, and sand is too plentiful to be used as money. Why not other metals... why don't we use iron as money? It's not scarce enough - you'd need carts of it at the store to go shopping.
As any Austrian economist can tell you, money is merely that commodity in an open market which best satisfies the properties necessary for useful exchange. Gold and silver take the cake every time a violent government doesn't get in the way... or at least, this is true historically. But, this doesn't mean that gold and silver are "perfect, infallible money." Indeed, there are practical problems. One can't easily divide and combine silver coins to make change. One can't easily send large values of gold across distance without hiring security and waiting for transport. One must pay storage fees, or risk theft at home. And, while difficult, it is possible to make fake gold and silver ingots and pass them off in trade as real.
So then it follows that if gold and silver are not perfect money (though admittedly the best we've had), perhaps mankind could discover or invent something that was even better. This is the Bitcoin experiment - the question of whether Bitcoin, with its specific attributes, is an even better form of money than what the marketplace currently enjoys (or in the case of state fiat, is forced to use). If the Austrians are right, and a marketplace tends to chose the medium of exchange which best works as money, and Bitcoin's specific attributes make it excellent money, then perhaps the marketplace will, over time, increasingly use it for such.
The answer so far, is yes. Bitcoin is finding more and more niches for early adoption, which further supports its market price, providing confidence to holders that it will retain value, and this further lends Bitcoin to be used for still more purposes. It's an organic and messy process, full of trial and error, potholes, brilliant innovations and terrible failures. But that's what an open marketplace is, no? Every day a more resilient economy is being built, and not at the point of a gun, but voluntarily - not by decree of Bernanke, but by spontaneous, self-interested private order.
Many have made the argument that "nothing backs Bitcoin." And this is true. Bitcoin cannot be redeemed for any fixed value, nor is it tied to any existing currency or commodity. But, neither is gold. Gold is not backed by anything - it is valuable because it's useful and scarce. Cars are not backed by anything, they are merely useful as cars and thus have value. Food is not backed, nor are computers. All these goods have value in proportion to their usefulness and scarcity, and one merely needs to see the usefulness of Bitcoin to understand why, without backing from any government nor corporation, without being tied to any fiat currency or existing commodity, it commands a price on the market and rightly so.
http://evoorhees.blogspot.com/2012/04/bitcoin-libertarian-introduction.html
This is perhaps the most important topic to address, as nothing else matters if Bitcoin has no value. What makes Bitcoin worth anything? Isn't it just "fake"? Isn't it just a made-up pretend virtual currency? Many say, "I can't hold it, I can't see it, and thus it's artificial and not worth my time." Let's challenge this understandable initial reaction. Let's demonstrate why Bitcoin is valuable, and very much worth one's time.
Financial privacy has long been symbolized by the notorious "Swiss bank account." Yet, anyone with a Swiss bank account has to trust that bank, and as we've seen in the last couple years, "bank privacy" even in Switzerland is a myth - banks there have been bending over for the US government and divulging customer information. So imagine having a private, numbered Swiss bank account, but without having to bother with the Swiss bank itself. That is Bitcoin. Instead of placing your trust in a regulated bank governed by fallible humans, Bitcoin enables you to place your trust in an unregulated cryptographic environment governed by infallible mathematics. 2+2 will always equal 4, no matter how many guns the government points at the equation.
Bitcoin is thus the only currency and money system in the world which has no counter-party risk to hold and to transfer. This is absolutely revolutionary and you should read the preceding sentence again. Gold advocates will point out that physical gold bullion has no counter-party risk, but that is only true for storage in your own home. Store it in a vault or bank and you have counter-party risk. And sending gold? You have to trust all sorts of people if you wish to transfer your gold somewhere else or spend it across distance.
Bitcoin means complete ownership of money both in storage and transfer. Nobody can prevent you from having it. Nobody can prevent you from spending it. Even if one's home is broken into, or even if the government issues a "confiscation order" (as they did with gold in 1933), one's Bitcoins are perfectly safe. Try fleeing a country with $1,000,000 in bullion without the government knowing about it. Easier said than done. With Bitcoin, it's almost easier done than said - you could put $1,000,000 of Bitcoin on a USB drive, or even write the private key on a piece of paper, or just email the wallet file to yourself to be retrieved outside the country.
Starting to see the value? Never in the history of the world has an individual had this ability. It is unprecedented.
No really, WHY is Bitcoin valuable???
At this point, skeptics should say, "okay fine, you can store and spend Bitcoins without interference, but what gives them initial value? Why do they have a price?" It's a very good question, and even expert economists have struggled with the answer.
But really, the answer is simple. Bitcoins have value because A) they are useful and B) they are scarce. Combine those two attributes in any asset and you will discover it has a price. The moment the first Bitcoin was traded to someone in exchange for something else, an exchange rate (market price) was established. Subsequent exchangers agreed or disagreed with that rate, and made further trades accordingly. Bitcoin thus spontaneously developed a price, as do all things in an open market if they are sufficiently useful and sufficiently scarce.
Let's look at value a little further, because it's a contentious issue with Bitcoin. There are many (including Paul Krugman) who believe Bitcoin isn't worth anything and is no more than a speculative bubble fad.
I wouldn't expect Krugman to "get it," but wiser/real economists need only observe metals to start understanding why Bitcoins have value. After all, any strong advocate of gold or silver as money should hopefully understand why these metals should be money. The answer is that these metals tend to be chosen in an open marketplace as money, because their specific properties make them useful as a means of exchange. It is the properties of gold and silver—unique to these metals—which make them excellent money. They are scarce, fungible, uniform, transportable, have a high value-to-weight ratio, are easily identifiable, are highly durable, and their supplies are relatively steady and predictable. Contrast other goods like chickens, or seashells, or sand, and you discover that none of them are as good on the above attributes as precious metals. Chickens can't well be cut in half or recombined, seashells are not uniform, and sand is too plentiful to be used as money. Why not other metals... why don't we use iron as money? It's not scarce enough - you'd need carts of it at the store to go shopping.
As any Austrian economist can tell you, money is merely that commodity in an open market which best satisfies the properties necessary for useful exchange. Gold and silver take the cake every time a violent government doesn't get in the way... or at least, this is true historically. But, this doesn't mean that gold and silver are "perfect, infallible money." Indeed, there are practical problems. One can't easily divide and combine silver coins to make change. One can't easily send large values of gold across distance without hiring security and waiting for transport. One must pay storage fees, or risk theft at home. And, while difficult, it is possible to make fake gold and silver ingots and pass them off in trade as real.
So then it follows that if gold and silver are not perfect money (though admittedly the best we've had), perhaps mankind could discover or invent something that was even better. This is the Bitcoin experiment - the question of whether Bitcoin, with its specific attributes, is an even better form of money than what the marketplace currently enjoys (or in the case of state fiat, is forced to use). If the Austrians are right, and a marketplace tends to chose the medium of exchange which best works as money, and Bitcoin's specific attributes make it excellent money, then perhaps the marketplace will, over time, increasingly use it for such.
The answer so far, is yes. Bitcoin is finding more and more niches for early adoption, which further supports its market price, providing confidence to holders that it will retain value, and this further lends Bitcoin to be used for still more purposes. It's an organic and messy process, full of trial and error, potholes, brilliant innovations and terrible failures. But that's what an open marketplace is, no? Every day a more resilient economy is being built, and not at the point of a gun, but voluntarily - not by decree of Bernanke, but by spontaneous, self-interested private order.
Many have made the argument that "nothing backs Bitcoin." And this is true. Bitcoin cannot be redeemed for any fixed value, nor is it tied to any existing currency or commodity. But, neither is gold. Gold is not backed by anything - it is valuable because it's useful and scarce. Cars are not backed by anything, they are merely useful as cars and thus have value. Food is not backed, nor are computers. All these goods have value in proportion to their usefulness and scarcity, and one merely needs to see the usefulness of Bitcoin to understand why, without backing from any government nor corporation, without being tied to any fiat currency or existing commodity, it commands a price on the market and rightly so.
http://evoorhees.blogspot.com/2012/04/bitcoin-libertarian-introduction.html
A shorter explanation, for anybody still having difficulties understanding my position. (argument between me and bitcoiner).
As I said, as I understand it, the regression theorem requires any potential thing to have value to people outside of being money for it to become valued as money in the future. This would be a great argument, pre-bitcoin adoption, as to why bitcoin would never grow to function as money. Now that bitcoin exists and has grown to be used as money at least in some limited capacity, we have some empirical evidence that contradicts the deductions made by Mises to create this theorem.
So let's step back the discussion and hear anything you have that explains why money must have be valued for traits outside of being money to have value as money. The best I've heard you come up with so far is that you trust the longevity of physical traits more than you do virtual ones, but that sounds like more your problem than a problem with bitcoin itself. Others with your line of thinking have and will likely continue to slow Bitcoin's rate of adoption and growth (by not adopting it due this dogmatic belief), but I don't see it invalidating all the value placed on it by others.
It appears to come down to you feeling more comfortable with a money that possesses a long-standing physical trait that is valued that you believe should give your money a psuedo floor price in case of speculative value collapse. You are free to value an oz of Gold that has a fraction of it's price very unlikely to go away due to a "utility" value trait more than an amount of bitcoin with equal exchange price, but that doesn't mean they are fundamentally different actors as money to those that use them.
Isn't the assertion that, bitcoin has no value because money must have value outside of being money to have value and bitcoin doesn't have value outside of being money, circular reasoning?
No its not circular reasoning. Remember: Intrinsic value is one of the essential properties of money, that allows it to fulfill its functions. Without intrinsic value, gold could not fulfill its monetary role. You want to seperate golds intrinsic value from its monetary value, however that is impossible, as without intrinsic value gold has NO monetary value. The reason you insist on seperating these two aspects of gold, is because you want to believe that bitcoin can function as money despite its lack of intrinsic value.
Now lets look at the functions of money, in order to appreciate, why it HAS to have intrinsic value.
1) Store of value.
To act as a store of value, these forms must be able to be saved and retrieved at a later time, and be predictably useful when retrieved.
Now what would happen, if in future nobody would accept my gold as payment for goods and services. Well, I could make jewelry out of it and wear that jewelry or I could decorate my house with it.
What happens when nobody accepts my BTCs? Well, I could do ABSOLUTELY NOTHING with my BTCs in this case. So already we see, that bitcoin actually has enormous counterparty risk, as it is only worth what somebody is willing to pay for it. If nobody wants my BTCs I am left with ABSOLUTELY NOTHING (i.e. bitcoin).
Now obviously I want to have a high degree of certainty, that somebody will want to exchange my store of value with other valuable things, as otherwise I would have an excess of one resource, that I would be stuck with.
What is golds guarantee in this regard? Well, it says: I am beautiful, people have loved my look since dawn of man, and have thus always been willing to accept me as payment for other valuable goods and services. Thats REAL backing.
What is BTC guarantee in this regard? Well it says: I am worth nothing, but people have agreed to exchange me for something, because they want to save transaction costs, and because they like exchanging me peer to peer (no third party or bank). Now without reading futher how convincing does that sound to you (pretend like you have never heard of BTC, or that BTC has collapsed in price)? Lets continue: In future people might not accept nothing for something. In future they might switch to a different coin, that is technologically superior (thus my wealth is stored in myspace and suddenly facebook comes along). In future the transaction costs might explode due to prohibitive regulation, so that the artificial agreement to exchange something for nothing collapses. In future, maybe people will prefer real backing over backed by nothing, especially if real backing can be transferred electronically (digital gold). In future people might think that it was crazy to accept nothing as payment, just to safe on transaction costs. In future there might be reputable trustees, and people might regain trust with third parties. In future maybe people decide that instant payment is not that important to them, as money is fungible. In future people might realize that its bitcoin is not anonymous and that it is not internet or gold 2.0. Bitcoin might stay highly volatile as the believe in an artificial agreement (with huge counterpary risk) is extremly volatile.
Now from my perspective the situation is even worse: Right now people are ONLY accepting nothing for something, because they strongly believe that nothing will go up in price (after all it has been going up in price in the past, so it must be true for the future
). Eventually some early adopter will want to cash out, and if there is nobody there to take his position, the price will fall through the floor.
So I believe, that bitcoin because it has no intrinsic value, cant be relied upon as a store of value. It is entirely dependent on the counterparty honoring an pseudo agreement. So bitcoin actually has enormous counterparty risk. Gold is a great store of value, as people will always accept it because it is beautiful. It is burnt into our brain. It has no counterparty risk, because the counterparty cant help but love and accept it (like with food and water).
Thus intrinsic value is ESSENTIAL for one of moneys core functions: store of value. Money value cant be seperated from intrinsic value, as it is DEPENDENT on it.
2) Medium of exchange
Same arguments apply. Right now people exchange something for nothing, due to an artificial pseudo agreement (transaction costs, peer to peer if you ask bitcoiners). I believe its even worse: Right now people ONLY accept it because it is going up in price. As soon as it crashes, people will stop accepting it, as it is irrational to agree to exchange something of no utility for something of utility in order to save transaction costs.
Be safe and take care.
1) You already assume that the person holding something will accept nothing in return and thus say that nothing is something because it can be exchanged for something...
No I reject your premise that bitcoin is "nothing". The problem I have with your argument is that you begin it with the assumption that for money to be something (have "value") it must have useful, valued traits outside of being money. It's this assumption I'd like to debate, not all the conclusions you arrive at after that assumption is made.As I said, as I understand it, the regression theorem requires any potential thing to have value to people outside of being money for it to become valued as money in the future. This would be a great argument, pre-bitcoin adoption, as to why bitcoin would never grow to function as money. Now that bitcoin exists and has grown to be used as money at least in some limited capacity, we have some empirical evidence that contradicts the deductions made by Mises to create this theorem.
So let's step back the discussion and hear anything you have that explains why money must have be valued for traits outside of being money to have value as money. The best I've heard you come up with so far is that you trust the longevity of physical traits more than you do virtual ones, but that sounds like more your problem than a problem with bitcoin itself. Others with your line of thinking have and will likely continue to slow Bitcoin's rate of adoption and growth (by not adopting it due this dogmatic belief), but I don't see it invalidating all the value placed on it by others.
It appears to come down to you feeling more comfortable with a money that possesses a long-standing physical trait that is valued that you believe should give your money a psuedo floor price in case of speculative value collapse. You are free to value an oz of Gold that has a fraction of it's price very unlikely to go away due to a "utility" value trait more than an amount of bitcoin with equal exchange price, but that doesn't mean they are fundamentally different actors as money to those that use them.
Isn't the assertion that, bitcoin has no value because money must have value outside of being money to have value and bitcoin doesn't have value outside of being money, circular reasoning?
No its not circular reasoning. Remember: Intrinsic value is one of the essential properties of money, that allows it to fulfill its functions. Without intrinsic value, gold could not fulfill its monetary role. You want to seperate golds intrinsic value from its monetary value, however that is impossible, as without intrinsic value gold has NO monetary value. The reason you insist on seperating these two aspects of gold, is because you want to believe that bitcoin can function as money despite its lack of intrinsic value.
Now lets look at the functions of money, in order to appreciate, why it HAS to have intrinsic value.
1) Store of value.
To act as a store of value, these forms must be able to be saved and retrieved at a later time, and be predictably useful when retrieved.
Now what would happen, if in future nobody would accept my gold as payment for goods and services. Well, I could make jewelry out of it and wear that jewelry or I could decorate my house with it.
What happens when nobody accepts my BTCs? Well, I could do ABSOLUTELY NOTHING with my BTCs in this case. So already we see, that bitcoin actually has enormous counterparty risk, as it is only worth what somebody is willing to pay for it. If nobody wants my BTCs I am left with ABSOLUTELY NOTHING (i.e. bitcoin).
Now obviously I want to have a high degree of certainty, that somebody will want to exchange my store of value with other valuable things, as otherwise I would have an excess of one resource, that I would be stuck with.
What is golds guarantee in this regard? Well, it says: I am beautiful, people have loved my look since dawn of man, and have thus always been willing to accept me as payment for other valuable goods and services. Thats REAL backing.
What is BTC guarantee in this regard? Well it says: I am worth nothing, but people have agreed to exchange me for something, because they want to save transaction costs, and because they like exchanging me peer to peer (no third party or bank). Now without reading futher how convincing does that sound to you (pretend like you have never heard of BTC, or that BTC has collapsed in price)? Lets continue: In future people might not accept nothing for something. In future they might switch to a different coin, that is technologically superior (thus my wealth is stored in myspace and suddenly facebook comes along). In future the transaction costs might explode due to prohibitive regulation, so that the artificial agreement to exchange something for nothing collapses. In future, maybe people will prefer real backing over backed by nothing, especially if real backing can be transferred electronically (digital gold). In future people might think that it was crazy to accept nothing as payment, just to safe on transaction costs. In future there might be reputable trustees, and people might regain trust with third parties. In future maybe people decide that instant payment is not that important to them, as money is fungible. In future people might realize that its bitcoin is not anonymous and that it is not internet or gold 2.0. Bitcoin might stay highly volatile as the believe in an artificial agreement (with huge counterpary risk) is extremly volatile.
Now from my perspective the situation is even worse: Right now people are ONLY accepting nothing for something, because they strongly believe that nothing will go up in price (after all it has been going up in price in the past, so it must be true for the future
). Eventually some early adopter will want to cash out, and if there is nobody there to take his position, the price will fall through the floor. So I believe, that bitcoin because it has no intrinsic value, cant be relied upon as a store of value. It is entirely dependent on the counterparty honoring an pseudo agreement. So bitcoin actually has enormous counterparty risk. Gold is a great store of value, as people will always accept it because it is beautiful. It is burnt into our brain. It has no counterparty risk, because the counterparty cant help but love and accept it (like with food and water).
Thus intrinsic value is ESSENTIAL for one of moneys core functions: store of value. Money value cant be seperated from intrinsic value, as it is DEPENDENT on it.
2) Medium of exchange
Same arguments apply. Right now people exchange something for nothing, due to an artificial pseudo agreement (transaction costs, peer to peer if you ask bitcoiners). I believe its even worse: Right now people ONLY accept it because it is going up in price. As soon as it crashes, people will stop accepting it, as it is irrational to agree to exchange something of no utility for something of utility in order to save transaction costs.
Be safe and take care.
porc you started a similar thread yesterday. you are a very tiresome troll. If you hate bitcoin then please go back to fiatland and live there. You are like someone going to a party, standing there and saying "this party is crap". GTFO
Hi porc,
let me switch to this thread since your ideas are much more clearly explained here.
Your arguments maybe valid (sorry I don't have time to argue the details), but that is with the premise that everybody sticks with your textbook requirements of money.
I guess the main difference between bitcoiners and you is that bitcoiners (including me) think that this definition of money is arbitrary, false or outdated.
I would replace "intrinsic value" by "intrinsic value or service". After all, a service also has utility.
I think money does not require any intrinsic value whatsoever.
In the case of USD, intrinsic value is replaced by at least two things: intrinsic service and government-enforced.
In the case of BTC, intrinsic value is replaced by at least two things: intrinsic service and network effect-backed.
The two main reasons why I advocate bitcoin is:
1. it has much more potential than fiat in terms of intrinsic service.
2. Of course both government and network effect can fail (completely or partially), but History shows that failure of a network effect is less probable than failure of a government.
When I say failure, that can be complete failure (100%) or partial failuree (1% inflation rate annually).
As for most of the people on this thread, stfu and gtfo are not very convincing arguments. And I don't think porc is a troll, since he is carefully reading our points and counter-arguing, albeit with some essential but debatable flaws.
let me switch to this thread since your ideas are much more clearly explained here.
Your arguments maybe valid (sorry I don't have time to argue the details), but that is with the premise that everybody sticks with your textbook requirements of money.
Quote
1) Properties/ Requirements of Money
Money: intrinsic value (aka utility of the commodity), divisible, fungible, scarce.
Money: intrinsic value (aka utility of the commodity), divisible, fungible, scarce.
I guess the main difference between bitcoiners and you is that bitcoiners (including me) think that this definition of money is arbitrary, false or outdated.
I would replace "intrinsic value" by "intrinsic value or service". After all, a service also has utility.
I think money does not require any intrinsic value whatsoever.
In the case of USD, intrinsic value is replaced by at least two things: intrinsic service and government-enforced.
In the case of BTC, intrinsic value is replaced by at least two things: intrinsic service and network effect-backed.
The two main reasons why I advocate bitcoin is:
1. it has much more potential than fiat in terms of intrinsic service.
2. Of course both government and network effect can fail (completely or partially), but History shows that failure of a network effect is less probable than failure of a government.
When I say failure, that can be complete failure (100%) or partial failuree (1% inflation rate annually).
As for most of the people on this thread, stfu and gtfo are not very convincing arguments. And I don't think porc is a troll, since he is carefully reading our points and counter-arguing, albeit with some essential but debatable flaws.
Utility Theory dose not demand that every individual experience the exact SAME utility from a commodity, not even over time. Again this is MARGINAL UTILITY THEORY. You people are revealing that you know absolutely NOTHING about the basics of utility theory when you make these posts.
Guys who oppose OP say right things about marginal utility which represents subjective value, though in layman's terms. Their naive understanding is correct nevertheless. If you want to discuss the theory of marginal utility in particular or subjective theory of value in general, you can do it with me...
Oh, wait... We already had a debate recently where you failed to show real understanding what these theories are about
MARGINAL UNITY THEORY it's 200 years old, learn some Econ 101 before you post such drivel.
We didn't go over "MARGINAL UNITY THEORY" in my classes. What is it an acronym for?
He talks about the theory of marginal utility, which is not a theory by itself strictly speaking. The notion of marginal utility is one of the cornerstones of the subjective theory of value, which was independently developed by an Austrian economist, Carl Menger (hence the Austrian school of economics), and other guys in the second half of the 19th century. Though the roots of this theory can be traced back to the Middle Ages...
porc, you spend an awful lot of time hanging around a bitcoin discussion forum when you've already admitted to having nothing good to say about bitcoin. How many more of these threads do you plan on making per day?
bankers who control the modern system cant get their heads around it
they wont be in control forever ,i watched a program on "financial experts"
talking about why bitcoin cant be money and none of them were able to understand it
maybe someone will post the link cause i forgot the name of it but there was a guy
who was trying to buy a coin but couldnt figure out how to do so and an older gentleman
in a bow tie and a suit from the 1960s and he was shaking his head saying no ,never ever
but the younger generation will embrace buying stuff with their android phones and transacting
for free and doing all the cool stuff thats just now becoming possible
BTC is new tech and the adoption curve will be slow ,teenagers have no problem undertanding it
because they grew up in the digital age as well as people in the 20,30s 40s etc
try explaining it to someone who is an old aged pensioner and its a differnt world ,they get lost at the mining stage
because anyone with a computer can create money ??
its funny to watch their disbelief because btc is such a revolutionary invention they simply cannt comprehend it
they wont be in control forever ,i watched a program on "financial experts"
talking about why bitcoin cant be money and none of them were able to understand it
maybe someone will post the link cause i forgot the name of it but there was a guy
who was trying to buy a coin but couldnt figure out how to do so and an older gentleman
in a bow tie and a suit from the 1960s and he was shaking his head saying no ,never ever
but the younger generation will embrace buying stuff with their android phones and transacting
for free and doing all the cool stuff thats just now becoming possible
BTC is new tech and the adoption curve will be slow ,teenagers have no problem undertanding it
because they grew up in the digital age as well as people in the 20,30s 40s etc
try explaining it to someone who is an old aged pensioner and its a differnt world ,they get lost at the mining stage
because anyone with a computer can create money ??
its funny to watch their disbelief because btc is such a revolutionary invention they simply cannt comprehend it
Beauty is entirely subjective. There is no way to agree on the beauty of something, and there is no way to agree on the value of that beauty. It cannot be used as a basis for intrinsic value.
Personally, I see no beauty in gold. It's just a rock. If the beauty of gold is the basis of its intrinsic value, then gold has no intrinsic value.
Personally, I see no beauty in gold. It's just a rock. If the beauty of gold is the basis of its intrinsic value, then gold has no intrinsic value.
Utility Theory dose not demand that every individual experience the exact SAME utility from a commodity, not even over time. Again this is MARGINAL UTILITY THEORY. You people are revealing that you know absolutely NOTHING about the basics of utility theory when you make these posts.
Guys talks about how intrinsic value is related directly to utility.
Does he realize how much utility water has over gold? If his ideas were true, a bottle of water should be worth $100m each because you need water to survive and provides you with such epic utility whereas diamonds aren't as useful utility-wise in comparison.
Does he realize how much utility water has over gold? If his ideas were true, a bottle of water should be worth $100m each because you need water to survive and provides you with such epic utility whereas diamonds aren't as useful utility-wise in comparison.
MARGINAL UNITY THEORY it's 200 years old, learn some Econ 101 before you post such drivel.
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