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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 g
by nwellnhof 9y ago
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.
- kensai 9y agoBut 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. ;)
- vannevar 9y agoYou 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.
- kensai 9y agoBitcoins apparently mean something to someone. Including the exchanges that exchange them to fiat. So stop using this circular argument.
- vannevar 9y agoDid 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.
- kensai 9y agoI 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.
- kensai 9y agoNow here is another "currency" with intrinsic value! :D https://www.facebook.com/greatbigstory/videos/1723932011242558/ https://www.facebook.com/greatbigstory/videos/17239320112425...
- dpiers 9y agoExcept the 'people' that decided the dollar is worth something control the world's most powerful economy and military, and can throw you in prison or seize your assets if you break their laws. The people who decided bitcoin is worth something control... private keys?
- kensai 9y agoAnd yet we already see SEC taking steps to consider Bitcoins as formal investments. So yes... even the world's most powerful blah blah blah is taking notice and wants piece of the pie.
- planteen 9y agoTransmutating bismuth from gold is not a trivial task, even given unlimited energy. You need a particle accelerator and your customers have to be OK with getting a bunch of radioactive gold along with their stable gold.
- kensai 9y agoWe will find a solution. Don't worry. The point here was that once something is not anymore scarse, it loses apparent value.
- paulddraper 9y agoSame with quantum Bitcoin mining as long as we are stringing words together.
- equalunique 9y agoLet's also not forget that the IRS primarily accepts tax payments electronically and not with bills.