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In the same logic: investing in Van Gogh art is a ponzi scheme. Indeed, “People invest into it because they expect good profits, and that expectation is sustain

by plank 5y ago

In the same logic: investing in Van Gogh art is a ponzi scheme. Indeed, “People invest into it because they expect good profits, and that expectation is sustained by such profits being paid to those who choose to cash out. However, there is no external source of revenue for those payoffs. Instead, the payoffs come entirely from new investment money, while the operators take away a large portion of this money.” Yes, the Sotheby’s and Christie’s take away a portion of the money. Any rebuke to this will work for bitcoin as well: yes, there are people who like a. Van Gogh painting, as well as there are people who like to have weird crypto money. Off course, this does not mean that I would recommend buying bitcoin. But I would not recommend anyone investing in Van Gogh either.

loceng 5y ago
With apples to oranges comparisons often made like you have, I'd urge people to brainstorm the longest list they can of similarities and differences between the two.
Tepix 5y ago
This is covered in the essay. An art piece is creating value by providing entertainment to those who view it. You can even put it in an exhibition and people will pay you to see it. This does not apply to Bitcoin. However, i slightly disagree with the author because Bitcoin does provide some value: The ability to digitally facilitate transactions (albeit rather slowly, with huge environmental damage and with high fees - clearly if this attribute were to be seen as the major contribution to its value, more advanced coins ought to be more far more valuable).
- mam4 5y ago
  You think Bitcoin doesnt not provide some form of entertainement to the milions od crypto enthusiasts ? Personally i think 50% of the interest of peopne invested in cypto, especially early investoes' is because they are nerds who love the appeal of the techbology. For them, crypto is as close as art as van gogh. P.s. thz 50% other is speculation.
- Valakas_ 5y ago
  It provides value though. It's a great medium to store value. Throughout history there have been stores of value which had little intrinsic value except their scarcity and tradeability - rai stones, certain sea shells, (...). Just like Bitcoin. Gold is just another of those. It has some industrial value, but it's current value FAR surpasses the value that comes from there. Most of gold's current price/market cap comes from being a good store of value. Now you have Bitcoin which has exactly the same characteristics as every other store of value humanity has ever used, but two more that we never had before: 1- it's immaterial. This can be seen as good or bad. But the fact that it's immaterial means you can trade it with anyone in the world, at lightning fast speed (with layer 2 at least), you don't carry weights if you want to "carry" it with you, and you can split into millions of pieces. 2- it's scarcity is hardcoded. Every single store of value that stopped being one, at some point stopped being scarce. And thus lost it its ability to store value. Caravel sailors used their huge ships to transport the heavy Rai stones much more easily than by the previous method the tribes that used it (by hand through a laborious process) and were able to transport dozens of them at a time. Sea shells either had to be found, and those they used were rare, or in other places they had to be minted in a special way to make them "worthy". Kind of proof of work. Suffice to say, explorers started using nets to get hundreds of them from high depths and immediately they lost their value. Now we can only have 21M BTC and that's it. There's no way around it, for now at least.
  - beardyw 5y ago
    The scarcity argument explains why high value art is almost invariably by dead artists.
- tarsinge 5y ago
  The entertainment value is insignificant compared to the cost of the piece. To me it looks like Bitcoin just put an uncomfortable fact in plain light: humans are irrational and sometimes like to arbitrarily give value to some things and not to others, for a variable amount of time. That's why these discussions about intrinsic value usually go nowhere, but it's hard to bear because for it clashes with common fundamental economic assumptions/beliefs. I'm an engineer, so sure I would find a rational and efficient free market beautiful, but let's face it, it's wishful thinking and is not the reality.
  - hansel_der 5y ago
    > The entertainment value is insignificant compared to the cost of the piece. that is your (and my) oppinion, it may well be different for someone with a lot of money.
    - tarsinge 5y ago
      And who is right? This kind of illustrate my point: there is no universal natural intrinsic value, it can differ a lot from a person to another. Bitcoin or Van Gogh pieces have value for those who chose to see value in them, no matter the rationality of the decision.
      - hansel_der 5y ago
        exactly! they are both right
    - RealityVoid 5y ago
      I think you can just as well be entertained by a VanGogh printed poster and have about 10 million to spare.
    - medvezhenok 5y ago
      If it were solely due to the entertainment value then an exact replica (made by someone else) would have the same value as the original. But it doesn't. Art (and most collectibles) are a type of social signaling (kind of like peacock feathers). In the end they are done for the same reason that someone buys a Ferrari or McLauren: to show to other people that they have achieved material success and to attract a better mate (in the end almost everything comes down to genetic incentives, whether conscious or not). As long as there is a contingent of people who believe that art is a social signifier and it will help people in the mating game, it will continue to be valuable (also tax evasion - but that's a different story).
- newacc9 5y ago
  >>An art piece is creating value by providing entertainment Its a bad faith argument. Art does not create $100m worth of "entertainment value". Its a store of value asset with some social cachet.
mutatio 5y ago
I guess for the Van Gogh, the argument could be made that it could generate revenue by selling access to see it.
- newacc9 5y ago
  More likely the art is in a vault somewhere at significant cost to the owner (armed guards/fireproof/bomb-proof/climate-controlled cost $$).

by plank 5y ago

loceng 5y ago

With apples to oranges comparisons often made like you have, I'd urge people to brainstorm the longest list they can of similarities and differences between the two.

Tepix 5y ago

This is covered in the essay. An art piece is creating value by providing entertainment to those who view it. You can even put it in an exhibition and people will pay you to see it. This does not apply to Bitcoin. However, i slightly disagree with the author because Bitcoin does provide some value: The ability to digitally facilitate transactions (albeit rather slowly, with huge environmental damage and with high fees - clearly if this attribute were to be seen as the major contribution to its value, more advanced coins ought to be more far more valuable).

mam4 5y ago
You think Bitcoin doesnt not provide some form of entertainement to the milions od crypto enthusiasts ? Personally i think 50% of the interest of peopne invested in cypto, especially early investoes' is because they are nerds who love the appeal of the techbology. For them, crypto is as close as art as van gogh. P.s. thz 50% other is speculation.
Valakas_ 5y ago
It provides value though. It's a great medium to store value. Throughout history there have been stores of value which had little intrinsic value except their scarcity and tradeability - rai stones, certain sea shells, (...). Just like Bitcoin. Gold is just another of those. It has some industrial value, but it's current value FAR surpasses the value that comes from there. Most of gold's current price/market cap comes from being a good store of value. Now you have Bitcoin which has exactly the same characteristics as every other store of value humanity has ever used, but two more that we never had before: 1- it's immaterial. This can be seen as good or bad. But the fact that it's immaterial means you can trade it with anyone in the world, at lightning fast speed (with layer 2 at least), you don't carry weights if you want to "carry" it with you, and you can split into millions of pieces. 2- it's scarcity is hardcoded. Every single store of value that stopped being one, at some point stopped being scarce. And thus lost it its ability to store value. Caravel sailors used their huge ships to transport the heavy Rai stones much more easily than by the previous method the tribes that used it (by hand through a laborious process) and were able to transport dozens of them at a time. Sea shells either had to be found, and those they used were rare, or in other places they had to be minted in a special way to make them "worthy". Kind of proof of work. Suffice to say, explorers started using nets to get hundreds of them from high depths and immediately they lost their value. Now we can only have 21M BTC and that's it. There's no way around it, for now at least.
- beardyw 5y ago
  The scarcity argument explains why high value art is almost invariably by dead artists.
tarsinge 5y ago
The entertainment value is insignificant compared to the cost of the piece. To me it looks like Bitcoin just put an uncomfortable fact in plain light: humans are irrational and sometimes like to arbitrarily give value to some things and not to others, for a variable amount of time. That's why these discussions about intrinsic value usually go nowhere, but it's hard to bear because for it clashes with common fundamental economic assumptions/beliefs. I'm an engineer, so sure I would find a rational and efficient free market beautiful, but let's face it, it's wishful thinking and is not the reality.
- hansel_der 5y ago
  > The entertainment value is insignificant compared to the cost of the piece. that is your (and my) oppinion, it may well be different for someone with a lot of money.
  - tarsinge 5y ago
    And who is right? This kind of illustrate my point: there is no universal natural intrinsic value, it can differ a lot from a person to another. Bitcoin or Van Gogh pieces have value for those who chose to see value in them, no matter the rationality of the decision.
    - hansel_der 5y ago
      exactly! they are both right
  - RealityVoid 5y ago
    I think you can just as well be entertained by a VanGogh printed poster and have about 10 million to spare.
  - medvezhenok 5y ago
    If it were solely due to the entertainment value then an exact replica (made by someone else) would have the same value as the original. But it doesn't. Art (and most collectibles) are a type of social signaling (kind of like peacock feathers). In the end they are done for the same reason that someone buys a Ferrari or McLauren: to show to other people that they have achieved material success and to attract a better mate (in the end almost everything comes down to genetic incentives, whether conscious or not). As long as there is a contingent of people who believe that art is a social signifier and it will help people in the mating game, it will continue to be valuable (also tax evasion - but that's a different story).
newacc9 5y ago
>>An art piece is creating value by providing entertainment Its a bad faith argument. Art does not create $100m worth of "entertainment value". Its a store of value asset with some social cachet.

mutatio 5y ago

I guess for the Van Gogh, the argument could be made that it could generate revenue by selling access to see it.

newacc9 5y ago
More likely the art is in a vault somewhere at significant cost to the owner (armed guards/fireproof/bomb-proof/climate-controlled cost $$).