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> Bitcoins have no value It's money (a currency). Money has value because someone says it has value and someone else agrees. Congrats, bitcoin has value! The

> Bitcoins have no value It's money (a currency). Money has value because someone says it has value and someone else agrees. Congrats, bitcoin has value! The nature of that value may be volatile and doomed to drop severely or go away entirely in the future, but that doesn't make it non-existent now.

Ologn 10y ago
> It's money (a currency). Money has value because someone says it has value and someone else agrees. Congrats, bitcoin has value! Commodities have value. Until 1971 in the US, US currency had implied value because it could be exchanged for a commodity - gold, which the US has thousands of tons of in Fort Knox and other places. Then in 1971, Nixon stopped the exchange of currency for that gold. But the tons of gold are still in Fort Knox. Why? Why store thousands of tons of gold? Obviously it is still backing the currency. Any currency panic can be ended by starting the conversion back up. US currency went from an implied conversion to an implication of an implication. It is still backed by those thousands of tons of gold though, although not explicitly. Bitcoin is backed neither explicitly nor implicitly by an useful commodity.
- tomsthumb 10y ago
  Your second paragraph seems to be heading in the direction that bitcoin doesn't have value because it lacks the robustness of being backed by a useful commodity. This is only vaguely less than orthogonal though. The robustness of a currencies value, while related, is not the same thing as the value of said currency. If the gold disappears tomorrow dollars would not become worthless. People would still use them as value stores which can be exchanged for goods and services (despite a lot of questions about where the gold went). Similarly, Bitcoin is (now) exchanged for goods and services which have value. Then comes the interesting question of "why is gold valuable?". If we assume the apocalypse and you have gold and I have guns, bullets, and canteens you could bet your boots I'm not interested in trading. If you're certain bitcoin is valueless AND you're right I urge you to continue convincing me. This could be one of the best short opportunities since the housing crisis of 2006.
  - Ologn 10y ago
    Gold is a commodity has value because it can conduct electricity, fill teeth and so forth. Historically it has been used as a currency because it is portable, uniform, divisible and durable. It has had value for thousands of years, through many of the calamities of history. Guns tend to have many laws with regards to them, and lose value over time - the muskets of the late 18th century are near worthless except as collector's items. Commodities have value due to their utility. Dollars were useles in 1968, but you could exchange them for a useful commodity. The value was implied. With the exchange cut off, it is an implication of an implication. It possibly could survive even more indirection. The US government could begin emptying Fort Knox gold ton by ton, implying it would tax or somehow get commodities from taxpayers or traders if necessary to back the currency. Then it becomes even more abstract. Right now a currency panic could be stemmed by simply turning gold convertibility back on. Gold has no magic properties, it just has the qualities of a good currency (portable, divisible, durable...) Germany used to keep the majority of its gold reserves outside Germany. In 2013 it began pulling this gold back to Germany. Why? Why bring it back now? Why have gold reserves at all? In the industrial countries, paper currency was exchangable for a useful commodity until around 1971 when the US closed the window, which is around when all countries closed the window. Also, currencies have what is probably a 10,000 year history, perhaps even longer in some form. What is called fiat money has existed for at least 900 years. Other financial mechanisms of this type have been around longer. The desire of governments to go into debt, to run printing presses and have the paper which comes out have a price, is not new. Our current system has existed for less than half a century, and in my view won't outlast panics, wars and such. Which has a simple meaning - at some point in the future, the US or Germany or some major industrial economy will be forced to open its gold window again to stem some future panic.
    - tomsthumb 10y ago
      > Dollars were useless in 1968, Hmmm. Go on.... > but you could exchange them for a useful commodity. That sounds useful though. That sounds like dollars have (or represent or store) utility. Really, it sounds like you're making the point that Bitcoin isn't a commodity and is therefore valueless, which I have a tough time agreeing with (the marketplace also currently disagrees with the idea). Neither real-estate nor services are a commodity and they both have economic value. If that's not your point it seems that there is a misunderstanding of what "useless" and "has no value" mean in the context of describing Bitcoin (and dollars?), and that we've not come to terms on what those phrases exactly mean so that we ensure we're examining the same set of thoughts built with the same set of words.

Ologn 10y ago

> It's money (a currency). Money has value because someone says it has value and someone else agrees. Congrats, bitcoin has value! Commodities have value. Until 1971 in the US, US currency had implied value because it could be exchanged for a commodity - gold, which the US has thousands of tons of in Fort Knox and other places. Then in 1971, Nixon stopped the exchange of currency for that gold. But the tons of gold are still in Fort Knox. Why? Why store thousands of tons of gold? Obviously it is still backing the currency. Any currency panic can be ended by starting the conversion back up. US currency went from an implied conversion to an implication of an implication. It is still backed by those thousands of tons of gold though, although not explicitly. Bitcoin is backed neither explicitly nor implicitly by an useful commodity.

tomsthumb 10y ago
Your second paragraph seems to be heading in the direction that bitcoin doesn't have value because it lacks the robustness of being backed by a useful commodity. This is only vaguely less than orthogonal though. The robustness of a currencies value, while related, is not the same thing as the value of said currency. If the gold disappears tomorrow dollars would not become worthless. People would still use them as value stores which can be exchanged for goods and services (despite a lot of questions about where the gold went). Similarly, Bitcoin is (now) exchanged for goods and services which have value. Then comes the interesting question of "why is gold valuable?". If we assume the apocalypse and you have gold and I have guns, bullets, and canteens you could bet your boots I'm not interested in trading. If you're certain bitcoin is valueless AND you're right I urge you to continue convincing me. This could be one of the best short opportunities since the housing crisis of 2006.
- Ologn 10y ago
  Gold is a commodity has value because it can conduct electricity, fill teeth and so forth. Historically it has been used as a currency because it is portable, uniform, divisible and durable. It has had value for thousands of years, through many of the calamities of history. Guns tend to have many laws with regards to them, and lose value over time - the muskets of the late 18th century are near worthless except as collector's items. Commodities have value due to their utility. Dollars were useles in 1968, but you could exchange them for a useful commodity. The value was implied. With the exchange cut off, it is an implication of an implication. It possibly could survive even more indirection. The US government could begin emptying Fort Knox gold ton by ton, implying it would tax or somehow get commodities from taxpayers or traders if necessary to back the currency. Then it becomes even more abstract. Right now a currency panic could be stemmed by simply turning gold convertibility back on. Gold has no magic properties, it just has the qualities of a good currency (portable, divisible, durable...) Germany used to keep the majority of its gold reserves outside Germany. In 2013 it began pulling this gold back to Germany. Why? Why bring it back now? Why have gold reserves at all? In the industrial countries, paper currency was exchangable for a useful commodity until around 1971 when the US closed the window, which is around when all countries closed the window. Also, currencies have what is probably a 10,000 year history, perhaps even longer in some form. What is called fiat money has existed for at least 900 years. Other financial mechanisms of this type have been around longer. The desire of governments to go into debt, to run printing presses and have the paper which comes out have a price, is not new. Our current system has existed for less than half a century, and in my view won't outlast panics, wars and such. Which has a simple meaning - at some point in the future, the US or Germany or some major industrial economy will be forced to open its gold window again to stem some future panic.
  - tomsthumb 10y ago
    > Dollars were useless in 1968, Hmmm. Go on.... > but you could exchange them for a useful commodity. That sounds useful though. That sounds like dollars have (or represent or store) utility. Really, it sounds like you're making the point that Bitcoin isn't a commodity and is therefore valueless, which I have a tough time agreeing with (the marketplace also currently disagrees with the idea). Neither real-estate nor services are a commodity and they both have economic value. If that's not your point it seems that there is a misunderstanding of what "useless" and "has no value" mean in the context of describing Bitcoin (and dollars?), and that we've not come to terms on what those phrases exactly mean so that we ensure we're examining the same set of thoughts built with the same set of words.