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Prices continually rising is an argument for how this _is_ tulips. The valid counterargument would be that the tulips are largely being used for something othe

by avaer 9y ago

Prices continually rising is an argument for how this _is_ tulips. The valid counterargument would be that the tulips are largely being used for something other than trading tulips.

brianwawok 9y ago
Tulips have SOME intrinsic value. If doomsday comes, the world is over.. a toolip can be planted outside your house and it looks a little bit more pretty. Or maybe you can eat it. Gold has SOME intrinsic value. It is very good for certain applications, I believe trace amounts are used in compute parts. Worst case you can make something shiny to look at, that will be rust proof and easy to shape. What is the intrinsic value of ETH or Bitcoin? It literally has nothing to back it.
- komaromy 9y ago
  For ETH, that's not really true: you can use it to pay for computation on the Ethereum blockchain. The value you assign to that computation may not be very significant, but it's hard to justify the notion that it's zero.
  - avaer 9y ago
    I'd argue the value of the computation is strictly less than zero, because I could do it cheaper without using Ethereum at all.
    - wayn3 9y ago
      thats like saying that the value of gasoline is less than zero because you could just walk the distance without polluting the environment. computing power is inherently valuable. the value of AWS is less than zero because you could just buy a computer and do the computation cheaper at home. duh.
      - avaer 9y ago
        The value of the trickle of gasoline to get me to my kitchen is less than zero. To use it I would have to waste considerable money architecting a way to get my car indoors. The value of AWS is greater than zero because spending my day monitoring my server would be exponentially more costly than paying Amazon to do it at scale. And Ether is worth less than zero (as a computation engine) because I could develop and run the computation in less time by opening vim, even if the Ether was free.
      - AstralStorm 9y ago
        Not if you factor in support costs you wouldn't. (Or sunk equipment costs for small scales.) Gasoline allows one to use large amounts of power at the same time, say, to run a generator, start a power plant or run power tools for construction. Bitcoin is not useful in and of itself as the current system of transactions is perfectly workable. On the other hand, try running power tools on solar power... (including making the huge batteries and plastics)
- 52-6F-62 9y ago
  Except a large number of companies committed to development and experimentation with the ETH blockchain. See: https://entethalliance.org/members/ https://entethalliance.org/members/
- jerf 9y ago
  "Tulips have SOME intrinsic value. If doomsday comes, the world is over.. a toolip can be planted outside your house and it looks a little bit more pretty. Or maybe you can eat it." That's an argument that they don't have intrinsic value, but only value contingent on their ability to look pretty or eat them, both things which themselves will depend on where you are on the Maslow hierarchy and your needs for food vs. decoration. Same for your argument about gold. Intrinsic value is not contingent on your needs, and, well, this is why it does not exist and there isn't anything that has intrinsic value and indeed the very concept is incoherent when you try to nail it down. Nothing has intrinsic value; it is all relative to some entity's desires or needs.
- drtillberg 9y ago
  Gold glitters like pyrite, but the latter is not scarce and therefore not valuable. For both gold and ETH, it is scarcity, in combination with the network effect, that is critical. For gold, scarcity is enforced by laws of nature, which encourages networks to treat it as valuable. For BTC, is there a similar constraint? I'm pretty sure the tokens can be reverse-transmutated by the software that counts it. This is true for all cryptocurrencies. Gold today and pyrite (or worse) tomorrow, which would make all of them unsuitable as long-term stores of value.
- njarboe 9y ago
  People want to have something as "a formal token of delayed reciprocal altruism (Richard Dawkins)" and these tokens have probably existed as long as language (~100k years) first starting as shells of a specific size and species. The first DDG hit of this phrase[1] brings up an essay that looks interesting, although I have not had time to read it yet. Gold and silver (and credit based on them) have been that token for most societies since around 600BC. Fiat currencies have been used but flame out spectacularly. I don't think one has lasted more than 100 years. Private gold was made illegal in the US in 1933 and the dollar debased. State exchanges of gold and currency at a fixed rate ended in 1971 with the dollar going full fiat. People are looking for the new token. [1] http://nakamotoinstitute.org/reciprocal-altruism-in-the-theory-of-money/ http://nakamotoinstitute.org/reciprocal-altruism-in-the-theo...
- someSven 9y ago
  > What is the intrinsic value of ETH or Bitcoin? It literally has nothing to back it. The brand and the places where you can pay or donate with it, or exchange it. The fact that it can't be seized by the authorities, the limit on inflation wired into the software and system. And thats most likely not all of it.

by avaer 9y ago

Prices continually rising is an argument for how this _is_ tulips. The valid counterargument would be that the tulips are largely being used for something other than trading tulips.

brianwawok 9y ago

Tulips have SOME intrinsic value. If doomsday comes, the world is over.. a toolip can be planted outside your house and it looks a little bit more pretty. Or maybe you can eat it. Gold has SOME intrinsic value. It is very good for certain applications, I believe trace amounts are used in compute parts. Worst case you can make something shiny to look at, that will be rust proof and easy to shape. What is the intrinsic value of ETH or Bitcoin? It literally has nothing to back it.

komaromy 9y ago
For ETH, that's not really true: you can use it to pay for computation on the Ethereum blockchain. The value you assign to that computation may not be very significant, but it's hard to justify the notion that it's zero.
- avaer 9y ago
  I'd argue the value of the computation is strictly less than zero, because I could do it cheaper without using Ethereum at all.
  - wayn3 9y ago
    thats like saying that the value of gasoline is less than zero because you could just walk the distance without polluting the environment. computing power is inherently valuable. the value of AWS is less than zero because you could just buy a computer and do the computation cheaper at home. duh.
    - avaer 9y ago
      The value of the trickle of gasoline to get me to my kitchen is less than zero. To use it I would have to waste considerable money architecting a way to get my car indoors. The value of AWS is greater than zero because spending my day monitoring my server would be exponentially more costly than paying Amazon to do it at scale. And Ether is worth less than zero (as a computation engine) because I could develop and run the computation in less time by opening vim, even if the Ether was free.
    - AstralStorm 9y ago
      Not if you factor in support costs you wouldn't. (Or sunk equipment costs for small scales.) Gasoline allows one to use large amounts of power at the same time, say, to run a generator, start a power plant or run power tools for construction. Bitcoin is not useful in and of itself as the current system of transactions is perfectly workable. On the other hand, try running power tools on solar power... (including making the huge batteries and plastics)
52-6F-62 9y ago
Except a large number of companies committed to development and experimentation with the ETH blockchain. See: https://entethalliance.org/members/ https://entethalliance.org/members/
jerf 9y ago
"Tulips have SOME intrinsic value. If doomsday comes, the world is over.. a toolip can be planted outside your house and it looks a little bit more pretty. Or maybe you can eat it." That's an argument that they don't have intrinsic value, but only value contingent on their ability to look pretty or eat them, both things which themselves will depend on where you are on the Maslow hierarchy and your needs for food vs. decoration. Same for your argument about gold. Intrinsic value is not contingent on your needs, and, well, this is why it does not exist and there isn't anything that has intrinsic value and indeed the very concept is incoherent when you try to nail it down. Nothing has intrinsic value; it is all relative to some entity's desires or needs.
drtillberg 9y ago
Gold glitters like pyrite, but the latter is not scarce and therefore not valuable. For both gold and ETH, it is scarcity, in combination with the network effect, that is critical. For gold, scarcity is enforced by laws of nature, which encourages networks to treat it as valuable. For BTC, is there a similar constraint? I'm pretty sure the tokens can be reverse-transmutated by the software that counts it. This is true for all cryptocurrencies. Gold today and pyrite (or worse) tomorrow, which would make all of them unsuitable as long-term stores of value.
njarboe 9y ago
People want to have something as "a formal token of delayed reciprocal altruism (Richard Dawkins)" and these tokens have probably existed as long as language (~100k years) first starting as shells of a specific size and species. The first DDG hit of this phrase[1] brings up an essay that looks interesting, although I have not had time to read it yet. Gold and silver (and credit based on them) have been that token for most societies since around 600BC. Fiat currencies have been used but flame out spectacularly. I don't think one has lasted more than 100 years. Private gold was made illegal in the US in 1933 and the dollar debased. State exchanges of gold and currency at a fixed rate ended in 1971 with the dollar going full fiat. People are looking for the new token. [1] http://nakamotoinstitute.org/reciprocal-altruism-in-the-theory-of-money/ http://nakamotoinstitute.org/reciprocal-altruism-in-the-theo...
someSven 9y ago
> What is the intrinsic value of ETH or Bitcoin? It literally has nothing to back it. The brand and the places where you can pay or donate with it, or exchange it. The fact that it can't be seized by the authorities, the limit on inflation wired into the software and system. And thats most likely not all of it.