What are your thoughts on BitCoin?

Something something, Karl Marx, exchange value and use value, something something

Cryptocurrencies have no use value whatsoever
 
Like I said, it's best compared to a drawing. Both bitcoins and drawings can have owners. They're both potentially pretty. They can be transferred. Bitcoin contains a history of its transactions.

As more contracts are written in bitcoin, the more its intrinsic value will be. The fewer contracts? Well, it becomes more like the drawings on your fridge.
 
Like I said, it's best compared to a drawing. Both bitcoins and drawings can have owners. They're both potentially pretty. They can be transferred. Bitcoin contains a history of its transactions.

As more contracts are written in bitcoin, the more its intrinsic value will be. The fewer contracts? Well, it becomes more like the drawings on your fridge.
*sigh*

It isn't possible for Bitcoin to have intrinsic value.
 
But lots of stuff works like that? Food actually works very much like that, it has its own supply/demand/price curves. It roughly follows a normalish supply/demand curve when there is adequate supply. However, when there isn't enough, it's worth everything. When there is so much that you can't eat it all before it spoils, it's worth nothing. Less than nothing, in fact, because you have to figure out what to do with too much of it after it spoils. If you can't figure out a way to usefully compost it, it becomes a detriment.

If something can have value because it enables a useful action, does not commerce have to be an action? It's why coins are. It's why currency is. It's why cash is valuable in ways that digital currency cannot duplicate. Otherwise, my dog is intrinsically worth ~30 lbs of protein.
 
*sigh*

It isn't possible for Bitcoin to have intrinsic value.

No, it can. Once a contract is written in bitcoin, it has intrinsic value. Just like a deadbolt protects your property, the bitcoin becomes the cheapest thing that protects your collateral. That value really exists, in the same way a deadbolt is useful as a lock.

Sure, if you don't need a lock, it's a paperweight. But if you need a lock, it has value.

Outside of mathematical beauty or the literal storage media, I cannot think of any value to a bitcoin when no contracts are written
 
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But lots of stuff works like that? Food actually works very much like that, it has its own supply/demand/price curves. It roughly follows a normalish supply/demand curve when there is adequate supply. However, when there isn't enough, it's worth everything. When there is so much that you can't eat it all before it spoils, it's worth nothing. Less than nothing, in fact, because you have to figure out what to do with too much of it after it spoils. If you can't figure out a way to usefully compost it, it becomes a detriment.

If something can have value because it enables a useful action, does not commerce have to be an action? It's why coins are. It's why currency is. It's why cash is valuable in ways that digital currency cannot duplicate. Otherwise, my dog is intrinsically worth ~30 lbs of protein.
I think you're over thinking it, food has intrinsic value because you can eat it. Yes you can run into problems with spoilage, but that doesn't mean that food doesn't have value (once it spoils it does become worthless)

Think of it this way: is it something you'd have at the end of your purchase? Is it something you could see yourself never selling or trading? And I'm not talking about could-you-possibly-be-a-wholesaler or something, I mean is there theoretically a final-link in the purchase chain kind of thing for it?

Currency can never be your "end purchase," because the entire point of getting currency (of any type) is to later trade it for something else. Currency has trade value, but it doesn't have any value for itself as an end product.

@El_Machinae I think you're still having difficulty with this concept ... a deadbolt does have intrinsic value, because like you said it physically protects your property, it does something itself. It doesn't matter if you personally need a lock at this time, you're still confusing market value (your need to own one decides how much you'll pay, if you don't need one at all then its market value is completely worthless to you) But a lock is still something that can be used for something other than trade, which is what intrinsic means. A contract is nothing more than a promissory note, again you're only using your currency there as a trade value.

I think the big thing here is you're confusing terms, you seem to be describing market/trade value, which is different than intrinsic value (which is something having value for its own sake outside of trade) Using something as collateral isn't intrinsic value, that's market value.
 
Potential energy is energy. Commerce is a useful purpose.
 
I think you're over thinking it, food has intrinsic value because you can eat it. Yes you can run into problems with spoilage, but that doesn't mean that food doesn't have value (once it spoils it does become worthless)

Think of it this way: is it something you'd have at the end of your purchase? Is it something you could see yourself never selling or trading? And I'm not talking about could-you-possibly-be-a-wholesaler or something, I mean is there theoretically a final-link in the purchase chain kind of thing for it?

Currency can never be your "end purchase," because the entire point of getting currency (of any type) is to later trade it for something else. Currency has trade value, but it doesn't have any value for itself as an end product.

@El_Machinae I think you're still having difficulty with this concept ... a deadbolt does have intrinsic value, because like you said it physically protects your property, it does something itself. It doesn't matter if you personally need a lock at this time, you're still confusing market value (your need to own one decides how much you'll pay, if you don't need one at all then its market value is completely worthless to you) But a lock is still something that can be used for something other than trade, which is what intrinsic means. A contract is nothing more than a promissory note, again you're only using your currency there as a trade value.

I think the big thing here is you're confusing terms, you seem to be describing market/trade value, which is different than intrinsic value (which is something having value for its own sake outside of trade) Using something as collateral isn't intrinsic value, that's market value.
I am sure we are talking past each other somehow. From my economic intrinsic value link, for example paypal has intrinsic value. However it does not produce anything that "you'd have at the end of your purchase", nothing that "you could see yourself never selling or trading", no "final-link in the purchase chain". However it has value because it facilitates commerce.

I would agree that paypal does not have any value in a philosophical point of view, it may well be pointless in a post-scarcity economy for example. But in the world we live it paypal shares have intrinsic value.
 
Using something as collateral isn't intrinsic value, that's market value.
Hmmmn, it's protecting collateral, like a deadbolt does. Or, more like how taping your name to the tupperware in the company fridge protects your property. But if you're distinguishing 'social utility' from 'intrinsic value', I'll grant you. A deadbolt will protect property regardless of the underlying laws, though a bitcoin cannot.

I'm not sure you doing much other than using the caveman test: A naked caveman couldn't use a bitcoin for anything, though he'd be able to use a deadbolt as a hammer or something. But once you're in a society, things have value based on how society uses them. Once you have a contract in bitcoin, they become the easiest way to protect your property. Sure, the value depends on the existence of contracts, but the value of hugs also depends on the existence of other people.

You mentioned how the intrinsic value of food depended on a combination of your need to eat and its spoilage. The value of bitcoins grows as contracts are written and decreases as they shrink. That's the more 'real' value of bitcoin, separate from what it's actually trading at today.

I don't think we're arguing about anything. I am just pointing out what the underlying source of value for Bitcoin would be outside of simple demand.
 
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I am sure we are talking past each other somehow. From my economic intrinsic value link, for example paypal has intrinsic value. However it does not produce anything that "you'd have at the end of your purchase", nothing that "you could see yourself never selling or trading", no "final-link in the purchase chain". However it has value because it facilitates commerce.

I would agree that paypal does not have any value in a philosophical point of view, it may well be pointless in a post-scarcity economy for example. But in the world we live it paypal shares have intrinsic value.
PayPal does have value, it generates revenue. You can "buy" PayPal by purchasing shares in that company. You'd never have to sell your shares and simply collect your share of profit, because as a company PayPal has value and earnings.

Hmmmn, it's protecting collateral, like a deadbolt does. Or, more like how taping your name to the tupperware in the company fridge protects your property. But if you're distinguishing 'social utility' from 'intrinsic value', I'll grant you. A deadbolt will protect property regardless of the underlying laws, though a bitcoin cannot.

I'm not sure you doing much other than using the caveman test: A naked caveman couldn't use a bitcoin for anything, though he'd be able to use a deadbolt as a hammer or something. But once you're in a society, things have value based on how society uses them. Once you have a contract in bitcoin, they become the easiest way to protect your property. Sure, the value depends on the existence of contracts, but the value of hugs also depends on the existence of other people.

You mentioned how the intrinsic value of food depended on a combination of your need to eat and its spoilage. The value of bitcoins grows as contracts are written and decreases as they shrink. That's the more 'real' value of bitcoin, separate from what it's actually trading at today.

I don't think we're arguing about anything. I am just pointing out what the underlying source of value for Bitcoin would be outside of simple demand.
You're still confused about market value versus intrinsic value. I don't think you're really reading what I'm saying? Your caveman analogy is nonsensical to what I said previously: I said you don't personally have to need a deadbolt lock to mean it has value. You're explaining market value: something can have intrinsic value but no market value, or vice versa.

I did not say that about the intrinsic value of food, I said that about its market value (if you don't need it, then it has no market/trade value) There's a difference between the intrinsic value of fresh food (something) versus the intrinsic value of spoiled food (nothing) That food's intrinsic value didn't change because of market conditions or demand, it changed because it had an actual physical change. Just like food no longer has any intrinsic value once you eat it.

Before responding again, I'd really appreciate it if you could go back and reread this conversation, and really try to understand the difference between market value and intrinsic value.
 
I think there's a point to be made about lubricants.
 
I'm reading what you're writing, I'm pointing out that a simple binary description doesn't really capture the ways in which Bitcoin might have value. It's not like we disagree that Bitcoin is basically pointless.
 
Bitcoin has market value, but not intrinsic value, that's what I've been saying all along. If something's market value is higher than its intrinsic value, it's a bubble investment.
 
You're still confused about market value versus intrinsic value.

I say you are the one being confused through oversimplification. Intrinsic value in the stock market is loose estimation/projection of current asset value and future cash flows. It’s a philosophical concept in finance, as been pointed to you above. Intrinsic value doesn’t exist in reality, because future cash flows are well.. in the future and no one can see it. Now, that’s just One concept of intrinsic value employed by financiers. There are many of those, tailored for a specific need and taste. The goal of analyzing intrinsic value from different angles is to know if there’s any real and potential value.

Ethereum contract has real value. It’s an automated program, which releases funds from escrow and sends them to the recipient upon presentation of proof that set conditions are fulfilled. The value in that is palpable. You gain in automation, cut on accounting/law costs and have ease of access for future reference. Nothing is eaten, nothing is spoiled, but value is still there, created through saving in costs and accessibility. On top of having useful fintech functions Ethereum is a currency. And that’s a whole another plane of discussion.
 
Umm, intrinsic value does exist in reality. Commodities for example have intrinsic value, you don't know what you're talking about. Again, you're talking about market/trade value.
 
Umm, intrinsic value does exist in reality. Commodities for example have intrinsic value, you don't know what you're talking about. Again, you're talking about market/trade value.

I am talking about different technologies associated with crypto, which are actually and potentially valuable. You, seem to be forever stuck on the level of figuring out generalised correlations between intrinsic, market and such.
 
Ok maybe this isn’t clear but no one is saying the market value of bitcoin as a speculative pyramid scheme of musical chairs is the part that has intrinsic value.

If you don’t think institutions and software can have intrinsic value then enjoy thinking that way. Enjoy defining it thusly.

But if you recognize that the ability for humans to exchange itself has intrinsic value, then you will find it easy to see how bitcoin, an institution that facilitates exchange in a way previously unfeasible, has intrinsic value in what it allows you to do.

You say gold because jewelry? At any moment, by magic, humans could deem jewelry not even a thing. You can’t eat it. Ah but because humans seem to innately like beautiful creations of lustrous wearable geometry, that’s the intrinsic value. Similarly, humans trade. Similarly, humans eat things tractors help with. We “could” stop. But we won’t because we are right now what we are right now and right now we are a species that engages in exchange of goods and services and cryptocurrency (the institution and technology, I don’t specify which) as an institution gives intrinsic advantages, regardless of its speculative market situation, to the exchange of goods and services. Which is intrinsically valuable by a useable and useful use of the term in any context with which to discuss bitcoin or other crypto currencies in a preapocalyptic world.
 
You're still talking about market value.

Take what you say about gold: that you can make jewelry from it is its intrinsic value. Whether or not you want said jewelry is market value.
 
When trying to figure out what my dog is worth, I've always kind of wondered how many calories I'd get from eating him.
To me your dog is not worth anything, but I
'm sure that you can value him in other ways besides potential calories. :p

Surely the point is that when evaluating the value of a company, you consider how much profit it can make by continuing to function, rather than the value of the physical things it owns. In the same way you could evaluate bitcoins value you consider how much commerce it allows, rather than just the value of the bits it is composed of.
Evaluating the value of a company is usually related to some kind of market value connected to buying or selling it. An asset purchase simply looks at the value of company assets; a stock purchase (if public) looks at earnings and other things; a stock purchase (private) will often focus on cash flow. A valuation is tightly tied to the context at hand.

BTC has some relatively fixed value as a physical coin (Are those real? Can I actually buy one?*). It also has potential value as a medium of exchange, but that value is not fixed nor is the scope of its reach fixed. Then it has some value as an investment option. This is not fixed or known. Maybe "usefulness" should be introduced into the conversation.

For the most part, I'd say BTC has potential value that is dependent upon one's goals.

* https://www.coindesk.com/10-physical-bitcoins-good-bad-ugly
 
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@MaryKB

I think what the intrinsic value supporters are presenting is that once people have started making commitments to future payments in Bitcoin then bitcoin does have an intrinsic value in that those people will need it and will therefore always have to trade for it. Contracted future payments mean that current bitcoin won't be completely devalued, hence it has intrinsic value. Much like paper currency has no actual utility, but knowing that the nation of issue will not accept payment of taxes in any other form ensures that it will always be in demand.
 
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