4 ms·

I have a hard time believing the intrinsic value of anything is zero. Think of the contrast between “value for use” and “value for exchange”. A gold coin, eve

by sethg 15y ago

I have a hard time believing the intrinsic value of anything is zero. Think of the contrast between “value for use” and “value for exchange”. A gold coin, even if you have no interest in exchanging it, can be pretty to look at, or melted down for jewelry. A share of stock, even if it is not being traded, gives you voting rights and possibly dividends. Fiat currency has damn close to zero use-value, but at least you can use it to pay taxes to the country that issue it. By contrast, without a market for bitcoins, a bitcoin is just a record of spent CPU power.

weavejester 15y ago
Not quite. The CPU power spent on a bitcoin guarantees that a certain level of work must be performed to reverse an existing transaction. In other words, an inherent property of a bitcoin is that it is hard to double-spend. Creating a token of information that cannot be spent more than once is hard to achieve without relying on a central trusted authority, so I'd argue this inherent property of bitcoins is useful and valuable.
- sethg 15y ago
  Those factors affect a bitcoin’s exchange value: for the purpose of exchange, a bitcoin is arguably more valuable than, say, an original haiku. But the difficulty in double-spending bitcoins is irrelevant if there is nothing to spend one on in the first place. (On the flip side, there are things whose use-value exceeds their exchange-value. If, for example, I am hungry and I have one fresh fish, I would derive benefit from cooking the fish and eating it, but if I’m not standing in a fish market, it’s probably not worth the effort for me to sell it.) The overall bitcoin protocol has some use-value: even if people stopped trading bitcoins, the protocol for running the system would be a worthy object of study for cryptologists. But you can derive that kind of benefit from the protocol without owning a single bitcoin.
  - weavejester 15y ago
    If we can agree that the protocol has value, then the only question is whether or not an individual bitcoin exists outside the protocol. I'd argue it doesn't. You can't point to a sequence of bytes and say "that's a bitcoin". Instead, a bitcoin exists only as an agreement between the CPU-majority in the network. They agree that user A solved a block, and therefore is entitled to new coins, and they agree that user A transferred that coin to user B, and so forth. But there's no piece of data that specifically represents a bitcoin. Outside of the bitcoin network, bitcoins don't exist, and therefore it's meaningless to talk about them in isolation.

by sethg 15y ago

weavejester 15y ago

Not quite. The CPU power spent on a bitcoin guarantees that a certain level of work must be performed to reverse an existing transaction. In other words, an inherent property of a bitcoin is that it is hard to double-spend. Creating a token of information that cannot be spent more than once is hard to achieve without relying on a central trusted authority, so I'd argue this inherent property of bitcoins is useful and valuable.

sethg 15y ago
Those factors affect a bitcoin’s exchange value: for the purpose of exchange, a bitcoin is arguably more valuable than, say, an original haiku. But the difficulty in double-spending bitcoins is irrelevant if there is nothing to spend one on in the first place. (On the flip side, there are things whose use-value exceeds their exchange-value. If, for example, I am hungry and I have one fresh fish, I would derive benefit from cooking the fish and eating it, but if I’m not standing in a fish market, it’s probably not worth the effort for me to sell it.) The overall bitcoin protocol has some use-value: even if people stopped trading bitcoins, the protocol for running the system would be a worthy object of study for cryptologists. But you can derive that kind of benefit from the protocol without owning a single bitcoin.
- weavejester 15y ago
  If we can agree that the protocol has value, then the only question is whether or not an individual bitcoin exists outside the protocol. I'd argue it doesn't. You can't point to a sequence of bytes and say "that's a bitcoin". Instead, a bitcoin exists only as an agreement between the CPU-majority in the network. They agree that user A solved a block, and therefore is entitled to new coins, and they agree that user A transferred that coin to user B, and so forth. But there's no piece of data that specifically represents a bitcoin. Outside of the bitcoin network, bitcoins don't exist, and therefore it's meaningless to talk about them in isolation.