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The same thing holds true for gold, diamonds, art paintings and fiat currencies.

bandrami 9y ago
Gold and diamonds have industrial uses and so some inherent value (even if a seller's cartel in both cases overinflates them). Fiat currencies are backed by big militaries, which, again, is an inherent value.
- bdamm 9y ago
  Bitcoin can be transferred from anywhere to anywhere, with almost no interference. That is its inherent value.
  - foepys 9y ago
    Western Union can do this, too. Even into a lot of regions where nearly nobody has internet access. Depending on the state of the Bitcoin network, sometimes also cheaper than Bitcoin.
    - bdamm 9y ago
      As someone who has used Western Union and ended up in money-trail hell, I can tell you with complete confidence that Western Union and their ilk are huge pains in the butt and charge too much for their overly complex "service". Sure, you need to get money into bitcoin and then out in order to take advantage of that property, but the ability to do that is getting easier and cheaper all the time.
- syntex 9y ago
  You must be from the past, as blockchain creates value by lowering cost of operations. Bitcoin, Litecoin - money transfer IOTA - micro transactions without fee ( Internet of Things ) Ethereum - contracts Monero - private, non-traceable transactions the list is long. 99% percent of these projects will fail, but 1% will create added value to the world.
  - billmalarky 9y ago
    Hey now don't sell Ethereum so short. IMO it's the real transformative platform for blockchains. It isn't just the features of Ethereum, which can be easily cloned, it's the massive and growing community around it already building exciting new products/services.
- billmalarky 9y ago
  Bitcoin already has proven valuable properties. The question now is whether or not the future flushed out value it brings is higher, or lower, than the current market price. There's a lot of unknowns which is why at this time it is a speculative investment. Make no mistake though, bitcoin is already valuable as a value store, especially for wealthy individuals who live in countries not quite as stable as the US. It also has a place as a convenient high risk investment at the high risk end of any investors portfolio who is looking to increase their risk adjusted return.
- joshontheweb 9y ago
  Bitcoins inherent value is utility. It facilitates things that were difficult or impossible before it existed. It allows you to transact online without middleman businesses. It allows quick, easy, and cheap international transactions. It allows you to not need a bank. It allows you to transact anonymously (if you do it right). Plus many more applications that have yet to be revealed.
zanny 9y ago
The stock trading value of gold is a pyramid scheme, of course. Gold, the metal, is not. Since bitcoin is just the currency, it has no intrinsic value besides its pyramid scheme. Fiat money isn't a pyramid scheme. You don't buy in on the assumption of future market growth that will drive up the value of what you have. You expect your fiat to become worth less, not more, over time. And Bitcoin is more "pyramidy" than other things because of how its coin creation algorithm worked. It halves every four years, so 16.5m of 21m bitcoin total ever to be made already exist. Early adopters got huge sums of cheap coin, while later entrants find the coin creation rates are slower and the price is magnitudes higher. Nothing precludes us having "breakout" means to increase the total market supply of things thought scarce right now. We could discover a way to synthesize gold cheaply that crashes the market, or we find space mining is a really lucrative source of gold. Suddenly the world gold supply gets a lot larger, and the price drops a lot in response. Bitcoin would require a major breaking and forking change to the algorithm to change the coin payout algorithm. And that kind of change hurts the people who have the bitcoin now, whose voice is what determines the canonical blockchain. They would never accept it unless the pyramid behavior of the current algorithm crashes the bitcoin economy.
- pantaril 9y ago
  >Fiat money isn't a pyramid scheme. You don't buy in on the assumption of future market growth that will drive up the value of what you have. You expect your fiat to become worth less, not more, over time. Wow, so if bitcoin is or isn't pyramid scheme depends on your assumption when you buy it? That's a new one. Than i guess I'm safe because i bought it to buy goods with it, never expected that price will soar so much.
  - zanny 9y ago
    You buy goods with bitcoin by converting it to usd. Nothing is priced (at least for extended lengths of time) in bitcoin, because of the price voltaility, because of the pyramid scheme. And yes, your perception of the value of something does influence whether or not it is a pyramid scheme. If you buy 10,000 scented soaps because you want a ton of scented soap that isn't a pyramid scheme. If you buy 10,000 scented soaps thinking you can find 1,000 people to buy them off you at more than you paid for them, then you are dealing with a pyramid scheme. Fundamentally, the price growth most bitcoin users (you would be in the minority) want depends on a definitional pyramid scheme of attracting new money to drive up the price of bitcoin. It isn't even debatable - the coin minting model of btc that declines over time directly maps to how to run a pyramid scheme on it, where early adopters get the most return. Most IPOs are pyramid schemes. The stock traded price of gold is a pyramid scheme. Any system where you participate on the assumption of scarcity going up, and thus your piece becoming more valuable on the backs of new entrants to the market is a pyramid scheme.

Gold and diamonds have industrial uses and so some inherent value (even if a seller's cartel in both cases overinflates them). Fiat currencies are backed by big militaries, which, again, is an inherent value.

bdamm 9y ago
Bitcoin can be transferred from anywhere to anywhere, with almost no interference. That is its inherent value.
- foepys 9y ago
  Western Union can do this, too. Even into a lot of regions where nearly nobody has internet access. Depending on the state of the Bitcoin network, sometimes also cheaper than Bitcoin.
  - bdamm 9y ago
    As someone who has used Western Union and ended up in money-trail hell, I can tell you with complete confidence that Western Union and their ilk are huge pains in the butt and charge too much for their overly complex "service". Sure, you need to get money into bitcoin and then out in order to take advantage of that property, but the ability to do that is getting easier and cheaper all the time.
syntex 9y ago
You must be from the past, as blockchain creates value by lowering cost of operations. Bitcoin, Litecoin - money transfer IOTA - micro transactions without fee ( Internet of Things ) Ethereum - contracts Monero - private, non-traceable transactions the list is long. 99% percent of these projects will fail, but 1% will create added value to the world.
- billmalarky 9y ago
  Hey now don't sell Ethereum so short. IMO it's the real transformative platform for blockchains. It isn't just the features of Ethereum, which can be easily cloned, it's the massive and growing community around it already building exciting new products/services.
billmalarky 9y ago
Bitcoin already has proven valuable properties. The question now is whether or not the future flushed out value it brings is higher, or lower, than the current market price. There's a lot of unknowns which is why at this time it is a speculative investment. Make no mistake though, bitcoin is already valuable as a value store, especially for wealthy individuals who live in countries not quite as stable as the US. It also has a place as a convenient high risk investment at the high risk end of any investors portfolio who is looking to increase their risk adjusted return.
joshontheweb 9y ago
Bitcoins inherent value is utility. It facilitates things that were difficult or impossible before it existed. It allows you to transact online without middleman businesses. It allows quick, easy, and cheap international transactions. It allows you to not need a bank. It allows you to transact anonymously (if you do it right). Plus many more applications that have yet to be revealed.

zanny 9y ago

The stock trading value of gold is a pyramid scheme, of course. Gold, the metal, is not. Since bitcoin is just the currency, it has no intrinsic value besides its pyramid scheme. Fiat money isn't a pyramid scheme. You don't buy in on the assumption of future market growth that will drive up the value of what you have. You expect your fiat to become worth less, not more, over time. And Bitcoin is more "pyramidy" than other things because of how its coin creation algorithm worked. It halves every four years, so 16.5m of 21m bitcoin total ever to be made already exist. Early adopters got huge sums of cheap coin, while later entrants find the coin creation rates are slower and the price is magnitudes higher. Nothing precludes us having "breakout" means to increase the total market supply of things thought scarce right now. We could discover a way to synthesize gold cheaply that crashes the market, or we find space mining is a really lucrative source of gold. Suddenly the world gold supply gets a lot larger, and the price drops a lot in response. Bitcoin would require a major breaking and forking change to the algorithm to change the coin payout algorithm. And that kind of change hurts the people who have the bitcoin now, whose voice is what determines the canonical blockchain. They would never accept it unless the pyramid behavior of the current algorithm crashes the bitcoin economy.

pantaril 9y ago
>Fiat money isn't a pyramid scheme. You don't buy in on the assumption of future market growth that will drive up the value of what you have. You expect your fiat to become worth less, not more, over time. Wow, so if bitcoin is or isn't pyramid scheme depends on your assumption when you buy it? That's a new one. Than i guess I'm safe because i bought it to buy goods with it, never expected that price will soar so much.
- zanny 9y ago
  You buy goods with bitcoin by converting it to usd. Nothing is priced (at least for extended lengths of time) in bitcoin, because of the price voltaility, because of the pyramid scheme. And yes, your perception of the value of something does influence whether or not it is a pyramid scheme. If you buy 10,000 scented soaps because you want a ton of scented soap that isn't a pyramid scheme. If you buy 10,000 scented soaps thinking you can find 1,000 people to buy them off you at more than you paid for them, then you are dealing with a pyramid scheme. Fundamentally, the price growth most bitcoin users (you would be in the minority) want depends on a definitional pyramid scheme of attracting new money to drive up the price of bitcoin. It isn't even debatable - the coin minting model of btc that declines over time directly maps to how to run a pyramid scheme on it, where early adopters get the most return. Most IPOs are pyramid schemes. The stock traded price of gold is a pyramid scheme. Any system where you participate on the assumption of scarcity going up, and thus your piece becoming more valuable on the backs of new entrants to the market is a pyramid scheme.