Topic: Why Bitcoin Fails as Currency of the Future - page 4. (Read 4642 times)
Blah Blah Blah and 32 posts is > 5 posts how?
Blah blah blah another new guy with under five posts predicting the end of the bitcoin.
Come back to this forum in five years and then you can say 'I told you so'...assuming bitcoin isn't around then.
Come back to this forum in five years and then you can say 'I told you so'...assuming bitcoin isn't around then.
Here's a current problem I'm having with the Bitcoin model.
We all know, or have a basic understanding of, the fallacies of the current economic model that Bitcoin is designed to address. But, one issue that I argue Bitcoin does not resolve is the idea of 'intrinsic value.' I have read on these forums where others argue Bitcoin has intrinsic value, yet I fail to understand how this is so. Why is it so important for a currency to have intrinsic value? The answer is simple; without intrinsic value, a currency has absolutely zero value unless some external subject recognizes value in it. In the past, this problem has attempted to be solved by 'pinning' the value of a currency to something else (e.g. USD to gold; Bitcoins to USD). In any of these 'pinning' attempts, the value of the currency becomes increasingly abstracted from that which is valuable to humans. So, what is valuable to humans? I would argue two of the most fundamental values are the value of living, and the value of happiness. Philosophically speaking, living and happiness are 'ends' in and of themselves; quantitatively, living fulfills the purpose of life (to live), and qualitatively, happiness relates to the quality of that life. I propose that a currency worthy of continuance into the future must be 'pinned' as closely as possible to these intrinsic human values. In this way, the currency must always retain some value because it would be entwined with that which is fundamentally valuable to humans. Let's use crop seeds as an example. Crop seeds, if used as currency, address both fundamental human values. If you plant the seeds, you will reap food which immediately provides quantitative value (you get to continue to live and not starve to death) as well as qualitative value (satisfaction/content in being full). Now, while a very hungry man may ascribe the seeds a higher value than a full man, the seeds never relinquish their value absolutely. Even if every person on Earth were temporarily 'full,' the seeds retain future value as someone will eventually become hungry. Gold and USD do not retain value in the same way. All that is required for gold and USD to absolutely lose all value is for all persons to agree they have no value. Try picking up some gold and eating it and see how valuable it is. Try the same with paper currency, or roll yourself a Bitcoin Burrito.
But, even a currency like crop seeds fails ultimately for one reason: ANY attempt to establish a globally-recognized currency leads to an overextension of relative value. Nobody will want crop seeds for a new car since the person owning the new car would obviously have satisfied any immediate threat to quantitative human value. This applies to any other global currency. The poor will stay poor, the rich will stay rich.
What is the solution? Well, I think it's already been done. Straight bartering. Bartering incorporates both quantitative/qualitative value as well as absolute/relative value. Since the process of bartering is distributed globally, the process itself has absolute value, but it also allows for each person to set their own relative quantitative/qualitative value on each bartered object. Isn't this what Bitcoin does? Wouldn't bitcoin operate in this way if it were to be globally accepted as a currency? NO. Global acceptance of a valued currency is much different than global acceptance of the process of exchange. Think of the difference between cognition and meta-cognition. Cognition as a process is absolutely valuable to anybody and anyone. My ideas allow me to function and navigate life how I please. Does this mean that another person values the product of my cognition? Again, NO. Through meta-cognition, I place my own relative value on the product of my cognition. Similarly, one values the process of bartering, but may place relative values on the bartered objects. Bitcoin, along with all other global currencies, fail in that they are the product of some other process, and thus have relative value only. Were all bitcoins, gold, USD, etc. to be eliminated, there are still other ways to satisfy intrinsic quantitative/qualitative value requirements. In a social world, bartering and exchange can never be eliminated.
My conclusion-
Any attempt to establish a global currency (centralized or decentralized) fails as people rely on the absolute value of the product when it has none. I think the only way for a successful economic future is to place absolute value on the process of exchange, leaving relative value to be decided between exchanging parties. This also seems like a way of escaping the "poor will stay poor, rich will stay rich" problem. Where absolute value is placed on the process, then the distinction between poor/rich becomes relative, not absolute. Hence, this also solves the problem of overextension of relative value since relative value is defined by the exchanging parties and not globally.
We all know, or have a basic understanding of, the fallacies of the current economic model that Bitcoin is designed to address. But, one issue that I argue Bitcoin does not resolve is the idea of 'intrinsic value.' I have read on these forums where others argue Bitcoin has intrinsic value, yet I fail to understand how this is so. Why is it so important for a currency to have intrinsic value? The answer is simple; without intrinsic value, a currency has absolutely zero value unless some external subject recognizes value in it. In the past, this problem has attempted to be solved by 'pinning' the value of a currency to something else (e.g. USD to gold; Bitcoins to USD). In any of these 'pinning' attempts, the value of the currency becomes increasingly abstracted from that which is valuable to humans. So, what is valuable to humans? I would argue two of the most fundamental values are the value of living, and the value of happiness. Philosophically speaking, living and happiness are 'ends' in and of themselves; quantitatively, living fulfills the purpose of life (to live), and qualitatively, happiness relates to the quality of that life. I propose that a currency worthy of continuance into the future must be 'pinned' as closely as possible to these intrinsic human values. In this way, the currency must always retain some value because it would be entwined with that which is fundamentally valuable to humans. Let's use crop seeds as an example. Crop seeds, if used as currency, address both fundamental human values. If you plant the seeds, you will reap food which immediately provides quantitative value (you get to continue to live and not starve to death) as well as qualitative value (satisfaction/content in being full). Now, while a very hungry man may ascribe the seeds a higher value than a full man, the seeds never relinquish their value absolutely. Even if every person on Earth were temporarily 'full,' the seeds retain future value as someone will eventually become hungry. Gold and USD do not retain value in the same way. All that is required for gold and USD to absolutely lose all value is for all persons to agree they have no value. Try picking up some gold and eating it and see how valuable it is. Try the same with paper currency, or roll yourself a Bitcoin Burrito.
But, even a currency like crop seeds fails ultimately for one reason: ANY attempt to establish a globally-recognized currency leads to an overextension of relative value. Nobody will want crop seeds for a new car since the person owning the new car would obviously have satisfied any immediate threat to quantitative human value. This applies to any other global currency. The poor will stay poor, the rich will stay rich.
What is the solution? Well, I think it's already been done. Straight bartering. Bartering incorporates both quantitative/qualitative value as well as absolute/relative value. Since the process of bartering is distributed globally, the process itself has absolute value, but it also allows for each person to set their own relative quantitative/qualitative value on each bartered object. Isn't this what Bitcoin does? Wouldn't bitcoin operate in this way if it were to be globally accepted as a currency? NO. Global acceptance of a valued currency is much different than global acceptance of the process of exchange. Think of the difference between cognition and meta-cognition. Cognition as a process is absolutely valuable to anybody and anyone. My ideas allow me to function and navigate life how I please. Does this mean that another person values the product of my cognition? Again, NO. Through meta-cognition, I place my own relative value on the product of my cognition. Similarly, one values the process of bartering, but may place relative values on the bartered objects. Bitcoin, along with all other global currencies, fail in that they are the product of some other process, and thus have relative value only. Were all bitcoins, gold, USD, etc. to be eliminated, there are still other ways to satisfy intrinsic quantitative/qualitative value requirements. In a social world, bartering and exchange can never be eliminated.
My conclusion-
Any attempt to establish a global currency (centralized or decentralized) fails as people rely on the absolute value of the product when it has none. I think the only way for a successful economic future is to place absolute value on the process of exchange, leaving relative value to be decided between exchanging parties. This also seems like a way of escaping the "poor will stay poor, rich will stay rich" problem. Where absolute value is placed on the process, then the distinction between poor/rich becomes relative, not absolute. Hence, this also solves the problem of overextension of relative value since relative value is defined by the exchanging parties and not globally.
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