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> The only way to refute it is to show that yes, such a valuation model exists. Ah, a rational person. Yes, I thought that argument would be unbeatable, but

> The only way to refute it is to show that yes, such a valuation model exists. Ah, a rational person. Yes, I thought that argument would be unbeatable, but the counter-argument goes like this: "Valuation models are worthless because all money is imaginary anyway." It's really hard to refute someone who says that, like it's hard to refute someone who believes the world is entirely imaginary.

jw1224 5y ago
If we didn’t have currency, our only means of exchange would be through bartering: I have food, you have clothes. I need clothes, and you need food. I’ll swap you 5 bags of corn for 3 pairs of socks. Do we have a deal? >> The only way to refute it is to show that yes, such a valuation model exists. It’s complex and inconvenient to barter all day long. So, “we” (society) created a “token” (e.g. USD) to represent the value of our economic goods. I believe 5 bags of corn is worth about $10. You believe 3 pairs of socks is also worth about $10. Now we have a deal, unambiguously, because we have a mutually-agreed asset from which we can both continue to derive value in other markets. So, both statements are true: “all money is imaginary” — because it has no inherent value (OK… I guess I can wipe my ass with it, or light a fire… but I can’t feed or clothe myself with a $10 bill). But, at the same time, it’s not worthless — as we mutually agree to assign it worth, on the basis that others are willing to do so too. > It's really hard to refute someone who says that There’s a good reason it’s hard to refute this… because it’s a fundamental economic principle! As more and more people “agree” that Bitcoin has value, its value grows. A mutually-agreed representation of value (i.e. a “valuation model”), therefore, exists.

3 ms·

> The only way to refute it is to show that yes, such a valuation model exists. Ah, a rational person. Yes, I thought that argument would be unbeatable, but

by TomSwirly 5y ago

jw1224 5y ago
If we didn’t have currency, our only means of exchange would be through bartering: I have food, you have clothes. I need clothes, and you need food. I’ll swap you 5 bags of corn for 3 pairs of socks. Do we have a deal? >> The only way to refute it is to show that yes, such a valuation model exists. It’s complex and inconvenient to barter all day long. So, “we” (society) created a “token” (e.g. USD) to represent the value of our economic goods. I believe 5 bags of corn is worth about $10. You believe 3 pairs of socks is also worth about $10. Now we have a deal, unambiguously, because we have a mutually-agreed asset from which we can both continue to derive value in other markets. So, both statements are true: “all money is imaginary” — because it has no inherent value (OK… I guess I can wipe my ass with it, or light a fire… but I can’t feed or clothe myself with a $10 bill). But, at the same time, it’s not worthless — as we mutually agree to assign it worth, on the basis that others are willing to do so too. > It's really hard to refute someone who says that There’s a good reason it’s hard to refute this… because it’s a fundamental economic principle! As more and more people “agree” that Bitcoin has value, its value grows. A mutually-agreed representation of value (i.e. a “valuation model”), therefore, exists.