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I am on the author's side. Still in the end, it just comes down to whether you think Bitcoin has any value. You can take any other investment and do the same co

I am on the author's side. Still in the end, it just comes down to whether you think Bitcoin has any value. You can take any other investment and do the same comparisons: When you buy assets like a house, you are speculating, that someone else will buy it at a higher price or pay rent to you, because they think it has value. All 5 points apply here, too. I would say rent is basically the same instrument as buying a house (for a short period of time), but even if you think of it as something different, as some external source of inherent value: You can rent out Bitcoin as well. When you buy stocks, you are speculating, that someone is going to buy the stocks at a higher price from you. You can base that speculation on the fact, that the company behind it is using your money [1] to buy something from a third person [2], that some fourth person [3] is going to buy back from them. And since they have done it in the past successfully and overall companies are doing that, you call that inherent value. I would call it the same, but in the end, "inherent value" is just a concept created through abstraction. It is turtles all the way down. There is no difference. Some investments are just a bit more complex, but in the end it comes down to whether you think something has value or not. It comes down to whether human nature makes enough people feel the thing you are ultimately betting on has value. There are many businesses, whose value really depends on similiar mechanisms as Bitcoin. E.g. you might think Bitcoin is a scam, but companies like Adidas or Nike are serious established businesses solving problems for humanity and are therefor inherently valuable. Well, those two companies can sell shoes at their prices, not because of the desire of people to go running, but really because of their desire to own a shoe with these brands printed on them. And who is to say that the desire to go running is something better than the desire to own something called "Nike" or "Bitcoin"? I know where I want to base my retirement on, [1] simplification, only true at IPOs, reality adds a layer of abstraction here [2] employees, business partners, a government [3] customers

marticode 5y ago
I would disagree with your analogy: you buy a stock because it gives you a claim to the profits of the underlying company. Even if it became impossible to find a buyer for the stock you own, so long as they pay dividend, you still have something of value. And the company has tangible assets (factories, offices) and intangible (patents, the skills of its employees, brand) that allow it to produce things of general value. Same applies to houses (they provide shelter) or gold (industrial applications or jewelry). Speculative value is only one part of their value. Bitcoin by comparison has no value beyond speculative. You can't build anything with a Bitcoin, and it won't ever give you a revenue stream, or shelter, or make pretty jewelry. It's just a bunch of numbers recorded on some computers. If nobody think those numbers have values then they are as good as some old JPEG ad in your browser cache.
- allendoerfer 5y ago
  I want to clearify again: I am not into crypto currencies. > I would disagree with your analogy: you buy a stock because it gives you a claim to the profits of the underlying company. Even if it became impossible to find a buyer for the stock you own, so long as they pay dividend, you still have something of value. And the company has tangible assets (factories, offices) and intangible (patents, the skills of its employees, brand) that allow it to produce things of general value. What is general value? Those dividends are based on selling products and services. As I tried to explain: There are companies, which are about putting names on things. People seem to find value in that. With Bitcoin you are controlling part of a list. I do not think that is very valuable, but OPs arguments can be applied to everything. > Same applies to houses (they provide shelter) or gold (industrial applications or jewelry). Speculative value is only one part of their value. If gold was about the industrial applications, its price would be way lower. It is really mostly about people thinking it has value. And with houses: Yop, we generally think these have value. But a house in London has way more value than a house in Sibiria. Just as Bitcoin has way more value than if I would start my own distributed list and sell entries. > You can't build anything with a Bitcoin As I said, just an abstraction. If something is valuable, because you can build something valuable with it, you have to follow the path. You will end up at some human desire or just simple believe in value. I don't get many of those desires, so how do I know being part of a blockchain isn't also one of them? As I said, I doubt it. I am just making a technical argument, that the authors analogies can be applied to everything.
danaris 5y ago
> in the end, "inherent value" is just a concept created through abstraction This is only true if you look only at things through an economic lens—which is a mistake, because inherent value is, fundamentally, what something is worth separate from its economic/trade value. Remove the economy from the equation entirely, and you will see which things have true inherent value. Gold has value because it can be used to manufacture electronics, and because it is pretty and people like to look at it. Art has value because it is a medium of expression, and again, because people like to look at it. Stocks, at least in their earliest form (before they became primarily an economic engine), have value because they give you part-ownership in—ie, part-control of—a company. Remove the economy from the equation, and Bitcoin has nothing. It is purely an economic construct. Thus, it has no inherent value.

marticode 5y ago

I would disagree with your analogy: you buy a stock because it gives you a claim to the profits of the underlying company. Even if it became impossible to find a buyer for the stock you own, so long as they pay dividend, you still have something of value. And the company has tangible assets (factories, offices) and intangible (patents, the skills of its employees, brand) that allow it to produce things of general value. Same applies to houses (they provide shelter) or gold (industrial applications or jewelry). Speculative value is only one part of their value. Bitcoin by comparison has no value beyond speculative. You can't build anything with a Bitcoin, and it won't ever give you a revenue stream, or shelter, or make pretty jewelry. It's just a bunch of numbers recorded on some computers. If nobody think those numbers have values then they are as good as some old JPEG ad in your browser cache.

allendoerfer 5y ago
I want to clearify again: I am not into crypto currencies. > I would disagree with your analogy: you buy a stock because it gives you a claim to the profits of the underlying company. Even if it became impossible to find a buyer for the stock you own, so long as they pay dividend, you still have something of value. And the company has tangible assets (factories, offices) and intangible (patents, the skills of its employees, brand) that allow it to produce things of general value. What is general value? Those dividends are based on selling products and services. As I tried to explain: There are companies, which are about putting names on things. People seem to find value in that. With Bitcoin you are controlling part of a list. I do not think that is very valuable, but OPs arguments can be applied to everything. > Same applies to houses (they provide shelter) or gold (industrial applications or jewelry). Speculative value is only one part of their value. If gold was about the industrial applications, its price would be way lower. It is really mostly about people thinking it has value. And with houses: Yop, we generally think these have value. But a house in London has way more value than a house in Sibiria. Just as Bitcoin has way more value than if I would start my own distributed list and sell entries. > You can't build anything with a Bitcoin As I said, just an abstraction. If something is valuable, because you can build something valuable with it, you have to follow the path. You will end up at some human desire or just simple believe in value. I don't get many of those desires, so how do I know being part of a blockchain isn't also one of them? As I said, I doubt it. I am just making a technical argument, that the authors analogies can be applied to everything.

danaris 5y ago

> in the end, "inherent value" is just a concept created through abstraction This is only true if you look only at things through an economic lens—which is a mistake, because inherent value is, fundamentally, what something is worth separate from its economic/trade value. Remove the economy from the equation entirely, and you will see which things have true inherent value. Gold has value because it can be used to manufacture electronics, and because it is pretty and people like to look at it. Art has value because it is a medium of expression, and again, because people like to look at it. Stocks, at least in their earliest form (before they became primarily an economic engine), have value because they give you part-ownership in—ie, part-control of—a company. Remove the economy from the equation, and Bitcoin has nothing. It is purely an economic construct. Thus, it has no inherent value.