4 ms·

Well it dramatically decreases the efficiency of the monetary system (requiring 60 days of electricity and 1 iPad of e-waste to scribble a few bytes into the le

Well it dramatically decreases the efficiency of the monetary system (requiring 60 days of electricity and 1 iPad of e-waste to scribble a few bytes into the ledger every 10 minutes), and only one of the other assets you pointed out create value, the others are unproductive. Real estate is not a monetary asset, it's a productive asset - because people need a place to live and you can either live in a house yourself or you can rent it to others. This demand doesn't go away through the introduction of Bitcoin. Gold is a commodity, not a monetary asset. While a large amount of its value is attributable to speculation it has myriad industrial uses, and jewelry use. Some of this demand may go away as there's a large overlap between goldbuggery and bitcoin maxis. Dollars have no intrinsic value, but instead their value is derived from demand which is created for them when they enter circulation. They're created via fractional reserve lending meaning that when a loan is issued, new dollars are created but also a debt is recorded - creating demand for those same dollars. That means dollars are 100% backed by demand for those dollars. This demand doesn't go away through the introduction of Bitcoin. Bitcoin is nothing. It has no intrinsic value, it has no demand, it's simply a speculative number-go-up machine. It's not money, that's for sure. You could try and use it as money but that would be an utter disaster from a macroeconomic perspective. So yeah, parent is right, its roughly a pyramid shaped MLM with a negative-sum component - the $60,000,000 per day you have to pay to miners to keep the music playing. [edit] Also note that gold and real estate are not classically defined as "monetary assets" - those are for instance cash, bank deposits, investments in debt capital markets and lease investments. Monetary assets need to have a prescribed value in exact dollar terms.

wyager 5y ago
This post is riddled with misconceptions, but I’m just going to focus on these because they’re probably the most productive places for you to start: > Real estate is not a monetary asset, it's a productive asset… Gold is a commodity, not a monetary asset. This is wrong. Any asset with monetary properties can (and will, in the right environments) be monetized. When the primary medium of exchange is inflationary, people will use whatever non-inflationary value stores they can find with sufficient liquidity. Most of the value of gold, and much of the value of real estate, lie in their capacity as a wealth storage mechanism. They are monetized. Bitcoin does a better job of this and will likely subsume their monetization value. > It has no intrinsic value Invocation of “intrinsic value” is a 100% surefire sign of a dysfunctional economic mental model.
- arcticbull 5y ago
  > This is wrong. Any asset with monetary properties can (and will, in the right environments) be monetized. That is not the definition of a monetary asset. "A monetary item is an asset or liability carrying a value in dollars that will not change in the future. These items have a fixed numerical value in dollars, and a dollar is always worth a dollar. The numbers do not change even though the purchasing power of a dollar can potentially change." [1] Words have meaning, so I guess I'm not 100% sure what you're talking about. > Invocation of “intrinsic value” is a 100% surefire sign of a dysfunctional economic mental model. [citation needed] [1] https://www.investopedia.com/terms/m/monetary-item.asp https://www.investopedia.com/terms/m/monetary-item.asp
  - deleted 5y ago
    [deleted]
  - wyager 5y ago
    I used the phrase “monetary asset” once to mean “an asset which behaves and is treated like money”, but it would have been less ambiguous for me to use the phrase “monetized asset”. > citation needed Give me a minute to find a copy of the Official Rules of Economic Epistemology. If you’d like to put forward any particular theory that assigns “intrinsic value” to objects I could address it specifically.
    - arcticbull 5y ago
      > I used the phrase “monetary asset” once to mean “an asset which behaves and is treated like money”, but it would have been less ambiguous for me to use the phrase “monetized asset”. Real estate is a productive asset and gold is a commodity. I'm not sure in what way they "behave like money" - their prices float with respect to a currency and have roughly zero of the attributes of money [1] - but monetization just means to find ways to make money off an unproductive asset, rather than transmuting it into something that's basically money. > Give me a minute to find a copy of the Official Rules of Economic Epistemology. I'll wait. If you're going to accuse someone of a "dysfunctional mental economic model" it's best to have a case made. I'm referring to intrinsic value in the economic sense not in the epistemological sense. Economic intrinsic value is an independent mathematical derivation of the market value of an asset - based on its qualities and attributes - divorced from the price at which it trades. For instance, the intrinsic value of a SPAC is the cash on hand, and its extrinsic value is whatever its trading at on the hopes of an acquisition. [1] https://www.stlouisfed.org/education/economic-lowdown-podcast-series/episode-9-functions-of-money#:~:text=The%20characteristics%20of%20money%20are,%2C%20limited%20supply%2C%20and%20acceptability https://www.stlouisfed.org/education/economic-lowdown-podcas....

wyager 5y ago

This post is riddled with misconceptions, but I’m just going to focus on these because they’re probably the most productive places for you to start: > Real estate is not a monetary asset, it's a productive asset… Gold is a commodity, not a monetary asset. This is wrong. Any asset with monetary properties can (and will, in the right environments) be monetized. When the primary medium of exchange is inflationary, people will use whatever non-inflationary value stores they can find with sufficient liquidity. Most of the value of gold, and much of the value of real estate, lie in their capacity as a wealth storage mechanism. They are monetized. Bitcoin does a better job of this and will likely subsume their monetization value. > It has no intrinsic value Invocation of “intrinsic value” is a 100% surefire sign of a dysfunctional economic mental model.

arcticbull 5y ago
> This is wrong. Any asset with monetary properties can (and will, in the right environments) be monetized. That is not the definition of a monetary asset. "A monetary item is an asset or liability carrying a value in dollars that will not change in the future. These items have a fixed numerical value in dollars, and a dollar is always worth a dollar. The numbers do not change even though the purchasing power of a dollar can potentially change." [1] Words have meaning, so I guess I'm not 100% sure what you're talking about. > Invocation of “intrinsic value” is a 100% surefire sign of a dysfunctional economic mental model. [citation needed] [1] https://www.investopedia.com/terms/m/monetary-item.asp https://www.investopedia.com/terms/m/monetary-item.asp
- deleted 5y ago
  [deleted]
- wyager 5y ago
  I used the phrase “monetary asset” once to mean “an asset which behaves and is treated like money”, but it would have been less ambiguous for me to use the phrase “monetized asset”. > citation needed Give me a minute to find a copy of the Official Rules of Economic Epistemology. If you’d like to put forward any particular theory that assigns “intrinsic value” to objects I could address it specifically.
  - arcticbull 5y ago
    > I used the phrase “monetary asset” once to mean “an asset which behaves and is treated like money”, but it would have been less ambiguous for me to use the phrase “monetized asset”. Real estate is a productive asset and gold is a commodity. I'm not sure in what way they "behave like money" - their prices float with respect to a currency and have roughly zero of the attributes of money [1] - but monetization just means to find ways to make money off an unproductive asset, rather than transmuting it into something that's basically money. > Give me a minute to find a copy of the Official Rules of Economic Epistemology. I'll wait. If you're going to accuse someone of a "dysfunctional mental economic model" it's best to have a case made. I'm referring to intrinsic value in the economic sense not in the epistemological sense. Economic intrinsic value is an independent mathematical derivation of the market value of an asset - based on its qualities and attributes - divorced from the price at which it trades. For instance, the intrinsic value of a SPAC is the cash on hand, and its extrinsic value is whatever its trading at on the hopes of an acquisition. [1] https://www.stlouisfed.org/education/economic-lowdown-podcast-series/episode-9-functions-of-money#:~:text=The%20characteristics%20of%20money%20are,%2C%20limited%20supply%2C%20and%20acceptability https://www.stlouisfed.org/education/economic-lowdown-podcas....