
Yes, Bitcoin Has No Intrinsic Value. Neither Does a $1 Bill - kensai
https://www.wired.com/story/bitcoin-has-no-intrinsic-value-neither-does-a-dollar1-bill
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nwellnhof
You hear this argument so often from fiat money critics, but it's plain wrong.
The US dollar has an intrinsic value because it's the only currency that the
US government accepts when collecting taxes. Since most people and companies
have to pay taxes when working or operating in the US, there will be always
demand for dollars. The same goes for all other state-issued currencies in the
world.

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kensai
But you actually prove the point of the article author by what you say. The
fiat has this value because somebody simply decided it. There is no inherent
value or use for the notes otherwise. They would not even worth the cost of
the paper to print them. With unlimited renewable energy, in a few years, we
could even transmute a "worthless" element to gold. Gold would have lost any
value by scarcity. Bitcoin, on the other hand, once recognised by some
governments, it is as good as fiat.

The whole point of the intrinsic value of a currency is that it is stupid,
unless it is something that has practical use or value. Under this aspect,
perhaps the last real currency with intrinsic value has probably been "salt"
in the Middle Ages. Super expensive and used for a real reason: to make a
miserable meal a little bit more palatable. ;)

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vannevar
You can make the same argument about IOUs, or contracts, or your bank account
balance, whatever currency it's denominated in. All of these things are
symbolic, yet there _is_ value in symbols if they mean something to someone,
regardless of whether a government agency is involved. Bitcoin's problem isn't
that it has no intrinsic value, it's that for the most part it's a vehicle for
pure speculation. It's a terrible currency as a result.

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kensai
Bitcoins apparently mean something to someone. Including the exchanges that
exchange them to fiat. So stop using this circular argument.

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vannevar
Did you mean this as a response to my comment or someone else's? I was
agreeing that Bitcoins mean something to someone, so I don't get the 'circular
argument' reference.

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kensai
I misread your comment indeed. And I agree that it has not the best currency
characteristics. But indeed, I concur with you, if something means something
to someone (even if it just were fancy pebbles), then it can be put to a price
higher than its real price. A symbolic price might actually be a powerful one.

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peterisza
I think that Bitcoin's intrinsic value lies in its system that can securely,
verifiably, transferably and trustlessly store numbers, assign them to
password-protected wallets and keep the sum of those numbers below a constant
(21M). Due to these traits, such a system is suitable for representing value
just like gold (but BTC is more easily transferable). It is pretty hard to
create such a system, therefore it is valueable.

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dpiers
It may be very hard to create such a system, but it is extremely easy to copy
it. Bitcoin is a proof-of-concept for a new technology, but that doesn't mean
it has value. I used to work at BitTorrent, and the extreme popularity of the
protocol did not translate into revenue for the company. There is nothing
special about the BTC blockchain that makes it any more valuable than any
other chain.

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peterisza
Good point. Maybe just the consensus around it and its history make it more
valuable than its copies.

However, almost the same applies to gold, as there are other scarce metals
that could become an alternative to it. If that happens, those will also be
worth more than just their industrial value (which is now the case I believe).

