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Cryptocurrencies have inherent value. Would you say there is value in having the capability to transact with someone else? There is some value there, no matter
by douglaswlance 4y ago
Cryptocurrencies have inherent value.
Would you say there is value in having the capability to transact with someone else? There is some value there, no matter how many alternatives and how little that value is. That value scales exponentially with the number of potential transactional partners because each additional partner gives all other partners a new potential transactional partner.
So at scale, even if the value of having the option to trade is minuscule, it balloons into real value when every single person on earth is a potential trade partner. That is the inherent value of a cryptocurrency network.
- mjburgess 4y agoWell that's the total addressable market: all possible users of any currency. Likewise, that's the same market for any currency proposal -- including all the coins currently trading at 0 USD. Money's job is not to have inherent use-value, as then people would use it up. Its value is relational, it tracks the economic exchanges with actual inherent value. But not perfectly, since you can eg., have hyperinflation, etc. So money has a life of its own above the economic transactions, but this is unsustainable, hence inflation which is "money falling back to earth". There is no earth for crypto to fall to, ie., no place of actual economic productivity.
- douglaswlance 4y agoIt's not all possible users. It's all actual users. Facebook isn't valuable because anyone on Earth could use it. It is valuable because people do use it and its value has the network effects. Coins trading at 0 USD have no users, thus their value is 0. Money must have inherent value (at least the capability of being traded) for it to be money.