
Tinkerbell Effect - abvr
https://en.wikipedia.org/wiki/Tinkerbell_effect
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WantonQuantum
Some asset classes trade at values above their intrinsic worth.

Gold has value for jewellery and for its properties as a metal in, for
example, electronics. However, it also has a status as a store of value (a
"safe" one at that) and therefore its current market price is, at least in
part, a result of the Tinkerbell effect.

It's arguable that cryptocurrencies are similar to gold with respect to the
Tinkerbell effect. They undoubtedly have economic value as a de-centralised
and trusted ledger of transactions. Whether any individual cryptocurrencies
have intrinsic value is a different question. Many people believe that the use
of cryptocurrencies will increase over time and so it is rational to buy and
hold it because it will increase in value. Actually I think I've just
convinced myself that the value of cryptocurrencies is not due to the
Tinkerbell effect; it's just plain old speculation.

~~~
LeoTinnitus
Precious metals unlike cryptocurrencies are physically tangible. In the event
of a massive economic crash that causes policy to swing back to gold backed
currencies, you can easily use it as a valid form of currency and is
borderline a universally understood currency beyond culture, race, language,
region. Cryptocurrencies aren't like that.

Look at Argentina's crash in the 90s or 00s (can't remember exactly when). The
middle class was literally wiped out. It's why people don't save, they just
buy assets with value in preparation for the next collapse cause the
perception is the government will inevitably lead it to ruin again.

Anthony Bourdain's episode of parts unknown in Argentina really showed the
mentality really well.

~~~
WantonQuantum
Ahh but that's the point! It's "a universally understood currency" because it
has had that status for a long time.

Gold has a status that is different from other metals and other expensive
jewellery (e.g., diamonds).

Why gold though? The physical properties of gold make it nice to look at and
touch. It's somewhat rare but not too rare (platinum would be a rubbish
currency).

So without anyone really thinking about it, gold has become not just something
that is valued for itself but something with an established trading value that
includes a premium that derives from its status as universally accepted and
valued.

That premium derived from its status as universally accepted and valued is
exactly the proportion of its value that is the Tinkerbell effect. In a
collapsed economy, gold is extremely useful and valuable because everyone
agrees that it is.

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ncmncm
This has the same meaning as the "eye in the pyramid" symbol that appears on
US currency. Money is the most pervasive example of such a phenomenon.

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puttycat
I wonder if language is also an instance of this.

~~~
ac42
[https://en.m.wikipedia.org/wiki/Subjectivism](https://en.m.wikipedia.org/wiki/Subjectivism)

