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"Value is not the market price" Who said it was? "the value of something to a given person is the maximum price the person is willing to pay" Which is depend

"Value is not the market price" Who said it was? "the value of something to a given person is the maximum price the person is willing to pay" Which is dependent on the supply and demand of that "something." "BTC's unique feature is the instantaneity and anonymity of transactions." "Instant" in the "10-30 minutes" sense, and anonymous in the "you can be tracked" sense...

endoself 14y ago
The maximum price that people are willing to pay isn't "dependent on" demand, it is demand. In particular, it has nothing to do with supply; if something is available for much less than the maximum price someone is willing to pay, then that just means that they get it for a lot less, it doesn't change how much they are willing to pay in principle. (There are a few subtleties here, such as that willingness to pay should be measured in terms of opportunity costs rather than dollars, but all this stuff can be found in an economics textbook.)
- betterunix 14y ago
  "The maximum price that people are willing to pay isn't "dependent on" demand, it is demand. In particular, it has nothing to do with supply" What the is maximum you willing to pay for breathable air? How much would you be willing to pay if you could not find free air everywhere you went? Demand is not "the maximum price people are willing to pay," it is "the willingness and ability to pay a given price."
argonaut 14y ago
Endoself is correct. That's the problem with HN. It is clear when someone's arguments have no foundation in modern economic theory and practice, yet these arguments get thrown around with a false sense of certitude. I cited the textbook definition for "value," and yet you argue that it's dependent on supply and demand, which ignored the fact that the definition of value that I cited is precisely what makes up demand. Person A is willing to pay $200 for a watch. Yet the market price of that watch is $20. Just because that person saved $180 does not mean that value of the watch to person A suddenly and magically fell by $180. Clearly this person found $200 worth of utility in that watch, or else s/he wouldn't have been willing to pay for it at that price. > "Instant" in the "10-30 minutes" sense, and anonymous in the "you can be tracked" sense... Now your arguments are focusing on semantics. EDITS: clarity and less snark.
- betterunix 14y ago
  "I cited the textbook definition for "value," and yet you argue that it's dependent on supply and demand, which ignored the fact that the definition of value that I cited is precisely what makes up demand." If your textbook is telling you that value is equivalent to demand, perhaps you need a new textbook. It is easy to illustrate the effect supply has on value with the following thought experiment: If I told you that I was charging $10 to step inside my house and breath some air, would you be willing to pay? Now imagine a world where breathable air is a scarce resource, and there are no other sources of breathable air for miles around my house; would you be willing to pay in that case?
  - argonaut 14y ago
    You cannot seriously bandy about the concepts of supply, demand, and market (equilibrium) price, concepts which form parts of basic economic theory, and then throw out the standard economic definition of value. > perhaps you need a new textbook. That clause is utterly devoid of any logical content. Your thought experiment demonstrates nothing except the basic concept of "people will buy whatever is cheapest." Let's say fresh air is worth $1 million to me. If you were charging $10, I would not pay because I can get it for free and gain a "consumer surplus" of $1 million. That does not change the fact that I would be willing to pay $1 million if air were a scarce resource.
    - betterunix 14y ago
      "You cannot seriously bandy about the concepts of supply, demand, and market (equilibrium) price, concepts which form parts of basic economic theory, and then throw out the standard economic definition of value." There is no "standard" definition of "value:" http://www.ehow.com/info_7904133_difference-between-classical-neoclassical-economics.html http://www.ehow.com/info_7904133_difference-between-classica... http://www.econlib.org/library/Enc1/NeoclassicalEconomics.html http://www.econlib.org/library/Enc1/NeoclassicalEconomics.ht... Your claim that value is nothing more than "demand" is not universally accepted among economists. I did not throw out any definitions; all I did was point out that value is affected by both supply and demand, which is a straightforward neoclassical interpretation.

endoself 14y ago

The maximum price that people are willing to pay isn't "dependent on" demand, it is demand. In particular, it has nothing to do with supply; if something is available for much less than the maximum price someone is willing to pay, then that just means that they get it for a lot less, it doesn't change how much they are willing to pay in principle. (There are a few subtleties here, such as that willingness to pay should be measured in terms of opportunity costs rather than dollars, but all this stuff can be found in an economics textbook.)

betterunix 14y ago
"The maximum price that people are willing to pay isn't "dependent on" demand, it is demand. In particular, it has nothing to do with supply" What the is maximum you willing to pay for breathable air? How much would you be willing to pay if you could not find free air everywhere you went? Demand is not "the maximum price people are willing to pay," it is "the willingness and ability to pay a given price."

argonaut 14y ago

Endoself is correct. That's the problem with HN. It is clear when someone's arguments have no foundation in modern economic theory and practice, yet these arguments get thrown around with a false sense of certitude. I cited the textbook definition for "value," and yet you argue that it's dependent on supply and demand, which ignored the fact that the definition of value that I cited is precisely what makes up demand. Person A is willing to pay $200 for a watch. Yet the market price of that watch is $20. Just because that person saved $180 does not mean that value of the watch to person A suddenly and magically fell by $180. Clearly this person found $200 worth of utility in that watch, or else s/he wouldn't have been willing to pay for it at that price. > "Instant" in the "10-30 minutes" sense, and anonymous in the "you can be tracked" sense... Now your arguments are focusing on semantics. EDITS: clarity and less snark.

betterunix 14y ago
"I cited the textbook definition for "value," and yet you argue that it's dependent on supply and demand, which ignored the fact that the definition of value that I cited is precisely what makes up demand." If your textbook is telling you that value is equivalent to demand, perhaps you need a new textbook. It is easy to illustrate the effect supply has on value with the following thought experiment: If I told you that I was charging $10 to step inside my house and breath some air, would you be willing to pay? Now imagine a world where breathable air is a scarce resource, and there are no other sources of breathable air for miles around my house; would you be willing to pay in that case?
- argonaut 14y ago
  You cannot seriously bandy about the concepts of supply, demand, and market (equilibrium) price, concepts which form parts of basic economic theory, and then throw out the standard economic definition of value. > perhaps you need a new textbook. That clause is utterly devoid of any logical content. Your thought experiment demonstrates nothing except the basic concept of "people will buy whatever is cheapest." Let's say fresh air is worth $1 million to me. If you were charging $10, I would not pay because I can get it for free and gain a "consumer surplus" of $1 million. That does not change the fact that I would be willing to pay $1 million if air were a scarce resource.
  - betterunix 14y ago
    "You cannot seriously bandy about the concepts of supply, demand, and market (equilibrium) price, concepts which form parts of basic economic theory, and then throw out the standard economic definition of value." There is no "standard" definition of "value:" http://www.ehow.com/info_7904133_difference-between-classical-neoclassical-economics.html http://www.ehow.com/info_7904133_difference-between-classica... http://www.econlib.org/library/Enc1/NeoclassicalEconomics.html http://www.econlib.org/library/Enc1/NeoclassicalEconomics.ht... Your claim that value is nothing more than "demand" is not universally accepted among economists. I did not throw out any definitions; all I did was point out that value is affected by both supply and demand, which is a straightforward neoclassical interpretation.