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The point of a currency is to trade it. If you disallow that then you might as well ask about food that I'm not allowed to eat, art I can't look at, or a langua

by Rule35 6y ago

The point of a currency is to trade it. If you disallow that then you might as well ask about food that I'm not allowed to eat, art I can't look at, or a language I'm not allowed to speak. > If you redefine "intrinsic value" to include "trade value", you have just made the word "intrinsic" meaningless. Is there any type of asset that does not have intrinsic value, using this new definition? The value of cryptocurrency in the abstract over regular currency is that it's provably tied to a transaction which is a program, and that transactions cannot be reversed - any revocation mechanisms like escrow, timeouts, etc, need to be part of the contract and thus transparent. This has a ton of value if you want your software to be able to do things that involve real value, from topping-up your API limits on a website to trading Pounds against a falling Euro. That can't be recreated by any centralized entity, such as the USA with dollars, or Ethereum and Eth, because of their ability to blacklist or roll back anything they don't approve of.

rspeele 6y ago
> The point of a currency is to trade it. If you disallow that then you might as well ask about food that I'm not allowed to eat, art I can't look at, or a language I'm not allowed to speak. Yes! You get it. Currencies normally don't and shouldn't have intrinsic value. The gold coins of the distant past had some intrinsic value since they could be melted down and used for jewelry or corrosion resistant coatings etc, but all modern currencies have near-zero intrinsic value and there is nothing wrong with that.
- Rule35 6y ago
  I don't agree with your conclusion though, in that I don't think it's a meaningful statement. All value is dependent on the use. Food is useful for sustenance, but less useful for shelter. Currency is worthless to eat, but useful to facilitate trade for shelter, etc. There's no objective intrinsic value to anything. If the Genie was to offer two intangible things, useless in isolation, such as a cryptocurrency (not a unit of that currency, but the system itself) or a new human language, neither would interest me. Both only have network value. But if I was allowed to use them as intended I would feel happy to have either.
  - rspeele 6y ago
    Do you agree that some things have value in isolation, in addition to their trade or network value? If so, perhaps you can also agree that making that distinction might be useful, at least in certain situations. In particular, the post that started this thread compared banning bitcoin to banning heroin. I believe heroin's value is driven almost entirely by its ability to get you high. The end users don't care if it's white, blue, red, or covered in Louis Vuitton logos as long as they are confident that it gets them high in that particularly lovely heroin way. When you ban it, you don't interfere at all with the fact that heroin gets you high. Heroin does that job as well as ever. By banning it, you make it harder to obtain, but you don't make having it any less desirable for the addict. On the other hand, when you ban bitcoin, you do interfere with the thing that's useful about Bitcoin: trading it. Not only do you make it harder for somebody to obtain BTC, you make having BTC less desirable, because it's harder to redeem it for a product or another currency. Maybe just speaking for myself here, but it wouldn't be as valuable to me if I couldn't go to a "legit" company like Coinbase to facilitate turning it into something I can use to buy a car or a house. I suspect a lot of people feel the same way so overall that lack of buying interest would be pretty strong downward pressure on the market price.
    - Rule35 6y ago
      > Maybe just speaking for myself here, but it wouldn't be as valuable to me if I couldn't go to a "legit" company like Coinbase to facilitate turning it into something I can use to buy a car or a house. Well, I've never used a centralized blockchain service. But then again, I've also transacted for foreign cash while in a bar. Obviously for you though, the value is based on those services. As it's a network effect, you not using it does hurt me a tiny bit multiplied by the number of people like you. But it's not like it has to be the currency to be almost as useful. Euros aren't taken everywhere yet nobody trades them at a discount in those areas. As long as cryptocurrency works for what I want it to, I don't much care that it's a bit harder to use at the grocery store. And of course, what's the consequence of the law? Do they shoot you, or do they just treat it as foreign cash or something and tax you at the least favorable rate? A totally ineffective ban could actually help. If you drove it underground enough that nobody declared it (or paid taxes on it) the increased value might help a burgeoning underground economy and help create money-laundering opportunities. And the ban has to be relevant to the use. If the USA banned bitcoin it might actually help other countries more than the diminished value of bitcoin hurt them and that disproportionate benefit could be the catalyst to make the system more useful overall. Already the USA has effectively banned most cryptocurrency by limiting what Americans can invest in and who they can invest through, but because of the halo effect Americans can buy BTC and ride the general wave despite not participating in some of the other opportunities directly. The limited ban did almost nothing despite your logic being fairly sound.

by Rule35 6y ago

rspeele 6y ago

> The point of a currency is to trade it. If you disallow that then you might as well ask about food that I'm not allowed to eat, art I can't look at, or a language I'm not allowed to speak. Yes! You get it. Currencies normally don't and shouldn't have intrinsic value. The gold coins of the distant past had some intrinsic value since they could be melted down and used for jewelry or corrosion resistant coatings etc, but all modern currencies have near-zero intrinsic value and there is nothing wrong with that.

Rule35 6y ago
I don't agree with your conclusion though, in that I don't think it's a meaningful statement. All value is dependent on the use. Food is useful for sustenance, but less useful for shelter. Currency is worthless to eat, but useful to facilitate trade for shelter, etc. There's no objective intrinsic value to anything. If the Genie was to offer two intangible things, useless in isolation, such as a cryptocurrency (not a unit of that currency, but the system itself) or a new human language, neither would interest me. Both only have network value. But if I was allowed to use them as intended I would feel happy to have either.
- rspeele 6y ago
  Do you agree that some things have value in isolation, in addition to their trade or network value? If so, perhaps you can also agree that making that distinction might be useful, at least in certain situations. In particular, the post that started this thread compared banning bitcoin to banning heroin. I believe heroin's value is driven almost entirely by its ability to get you high. The end users don't care if it's white, blue, red, or covered in Louis Vuitton logos as long as they are confident that it gets them high in that particularly lovely heroin way. When you ban it, you don't interfere at all with the fact that heroin gets you high. Heroin does that job as well as ever. By banning it, you make it harder to obtain, but you don't make having it any less desirable for the addict. On the other hand, when you ban bitcoin, you do interfere with the thing that's useful about Bitcoin: trading it. Not only do you make it harder for somebody to obtain BTC, you make having BTC less desirable, because it's harder to redeem it for a product or another currency. Maybe just speaking for myself here, but it wouldn't be as valuable to me if I couldn't go to a "legit" company like Coinbase to facilitate turning it into something I can use to buy a car or a house. I suspect a lot of people feel the same way so overall that lack of buying interest would be pretty strong downward pressure on the market price.
  - Rule35 6y ago
    > Maybe just speaking for myself here, but it wouldn't be as valuable to me if I couldn't go to a "legit" company like Coinbase to facilitate turning it into something I can use to buy a car or a house. Well, I've never used a centralized blockchain service. But then again, I've also transacted for foreign cash while in a bar. Obviously for you though, the value is based on those services. As it's a network effect, you not using it does hurt me a tiny bit multiplied by the number of people like you. But it's not like it has to be the currency to be almost as useful. Euros aren't taken everywhere yet nobody trades them at a discount in those areas. As long as cryptocurrency works for what I want it to, I don't much care that it's a bit harder to use at the grocery store. And of course, what's the consequence of the law? Do they shoot you, or do they just treat it as foreign cash or something and tax you at the least favorable rate? A totally ineffective ban could actually help. If you drove it underground enough that nobody declared it (or paid taxes on it) the increased value might help a burgeoning underground economy and help create money-laundering opportunities. And the ban has to be relevant to the use. If the USA banned bitcoin it might actually help other countries more than the diminished value of bitcoin hurt them and that disproportionate benefit could be the catalyst to make the system more useful overall. Already the USA has effectively banned most cryptocurrency by limiting what Americans can invest in and who they can invest through, but because of the halo effect Americans can buy BTC and ride the general wave despite not participating in some of the other opportunities directly. The limited ban did almost nothing despite your logic being fairly sound.