3 ms·

It has a lot with it to do, because a lot of today's asset value is based on pure emotions of investors and their feelings and if something is actually physical

It has a lot with it to do, because a lot of today's asset value is based on pure emotions of investors and their feelings and if something is actually physical, which you can see, hold in your hands, which has a very shiny appearance, is being worn by rich people around their necks and is used in the most sophisticated electronics (which itself is required for the world to function nowadays) influences one's feelings a lot - so yes, the fact that gold has these attributes plays a huge role IMHO. On the other hand a BTC is literally just a made up hashsum which is not only extremely volatile on the markets, but could also very easily just physically disappear through loss, theft or just malfunction.

baddox 9y ago
But if you’re going to use emotions to explain a significant portion of gold’s value, surely the emotions of Bitcoin traders should provide an equally legitimate explanation of Bitcoin’s value. I don’t really like appeals to “inherent value,” except for assets that can be expected to be desirable to almost any individual in almost any conceivable scenario (like food). Even then, there is some level of social or “network” effect, because in order to trade food you need your trade partner to have confidence that your assets are genuine (e.g. it’s not fake cans of beans) and that there is some fundamental protection of property rights (e.g. you’re not going to trade your canned beans for their eggs, only to immediately steal back their eggs using the threat of force). In that sense, all “inherent value” is just an abstraction based on your confidence in your ability to predict the future behavior of other humans, which isn’t so different than your decision today to trade fiat currency for cryptocurrency (or even to trade your labor for fiat currency, like most of us do in traditional jobs).

baddox 9y ago

But if you’re going to use emotions to explain a significant portion of gold’s value, surely the emotions of Bitcoin traders should provide an equally legitimate explanation of Bitcoin’s value. I don’t really like appeals to “inherent value,” except for assets that can be expected to be desirable to almost any individual in almost any conceivable scenario (like food). Even then, there is some level of social or “network” effect, because in order to trade food you need your trade partner to have confidence that your assets are genuine (e.g. it’s not fake cans of beans) and that there is some fundamental protection of property rights (e.g. you’re not going to trade your canned beans for their eggs, only to immediately steal back their eggs using the threat of force). In that sense, all “inherent value” is just an abstraction based on your confidence in your ability to predict the future behavior of other humans, which isn’t so different than your decision today to trade fiat currency for cryptocurrency (or even to trade your labor for fiat currency, like most of us do in traditional jobs).