2 ms·
> It has value insofar as someone believes they can trade "X units of $TRUMP" for a Subway Footlong or a "Y units of $MELANAIA" for an ounce of Gold. No belief
by Terr_ 2y ago
> It has value insofar as someone believes they can trade "X units of $TRUMP" for a Subway Footlong or a "Y units of $MELANAIA" for an ounce of Gold. No belief = no value.
I disagree, there's a very important important difference here compared to the rest, because there's an off-market utility.
People know they can purchase it from a particularly crooked politician to bribe him for government power, influence, and access. Even afterwards, possessing a large collection of coins becomes a way to get favors compared to those who don't.
- PaulHoule 2y agoThere's a reality of that and then there's a perception. That is, the politician doesn't have any obligation to return the favor. There's the problem that, when supply is limited, auctions clear at a price set by the person who thinks the object is worth the most, whose opinion is likely to be wrong. (Radio advertising, a business that I've hovered around the periphery of for years, is like that in my mind. The owner of all the car dealerships in my city feels a little squee every time he hears his name on the radio, which distorts his judgement. People who do direct-to-consumer advertising on YouTube, however, have an excellent model of how much value an ad contributes to their business, which is why radio advertising impression rates are on an an entirely different planet than online ads.)
- themacguffinman 2y agoIf the politician doesn't return the favor, the briber can dump their coin and depress the coin price. Other coin traders can also affect this but the general principle still holds that you can add and remove fiat value from the market.