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> If your fork somehow became well known and replaced the original, then yeah, your fork would have some intrinsic value as a medium of exchange and a store of
by jboy55 4y ago
> If your fork somehow became well known and replaced the original, then yeah, your fork would have some intrinsic value as a medium of exchange and a store of value.
Intrinsic value is a value outside of perceived value. A can of soup is calories, which we need to survive, as long as it is edible, it will always be worth something to a human. Farm land has intrinsic value because it can produce food. Diesel has intrinsic value because farmers need this to produce food. Bitcoin9890812895, my fork of Bitcoin9890812894 has no intrinsic value to anyone.
- tshaddox 4y ago> Intrinsic value is a value outside of perceived value. Yes, and we're not talking about perceived value. We're talking about intrinsic value from a peer-to-peer network that's used by many people.
- throwaheyy 4y agoIt has value only from being accepted by a network of people. That’s not intrinsic value. That’s the very definition of perceived value.
- tshaddox 4y agoNo, I'm not saying that the current market price of bitcoin is the same as its intrinsic value. I'm saying that you can calculate a value of bitcoin using objective measures rather than the current market price of bitcoin. Those objective measures can include things like the capabilities of the bitcoin network, the number of types of people using it, etc.
- throwaheyy 4y agoThe value of Bitcoin is the sum of its intrinsic and perceived value. Consider a hypothetical Bitcoin, without the objective measures you describe. Without the capabilities of the network, people willing to accept it as payment for goods/services —- it is a coin that nobody has a use or want for, i.e. an unadopted shitcoin. The value of unadopted shitcoins approaches zero as fewer and fewer people use it. Therefore, the value of Bitcoin is entirely comprised of perceived, and not intrinsic value. Another way: Compare a Bitcoin with a banknote. A banknote has perceived value (it represents one, or several, dollars, which have a stable value and are accepted universally) and intrinsic value (it is piece of paper that you could burn to provide a small amount of heat, in a pinch). The Bitcoin doesn’t even have that tiny amount of intrinsic value that the banknote has. During the Weimar Republic, people burned paper money because it was cheaper than wood. In that situation hyperinflation led to the perceived value falling so low that it was below the paper money’s intrinsic value. If everyone stopped accepting Bitcoin and its perceived value evaporated, that Bitcoin would not even have the intrinsic value remaining, of heat from a single burning banknote.
- tshaddox 4y agoBut you're using a far too narrow definition of "intrinsic value" that is not at all the definition used in economics in finance. It doesn't just mean something like "the value it would have to me if I were the only person alive on Earth." Computer networks, protocols, and other technological systems can still have intrinsic value even when they require many people to use them.