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Be careful when you use words like 'intrinsic.' It may be argued that fiat-currencies are 'intrinsically' without value either. This 'anti-cheating' mechanism

• dragonwriter 14y ago
  > Be careful when you use words like 'intrinsic.' It may be argued that fiat-currencies are 'intrinsically' without value either. No, that's not arguable, its part of the whole point of fiat currencies is avoiding intrinsic value and replacing it with fiat. Commodity currencies rely on the intrinsic value of the commodity to provide certainty that the currency will be exchangeable for goods and services (providing a lower limit on exchange value.) They also rely on the inherent supply characteristics of the underlying commodity to control the supply of the currency. Fiat currencies rely on the issuing government (or participating governments, in the case of something like the Euro) accepting it for taxes, fines, and government services for the same purpose, as paying some or all of these is common enough that it provides demand for the currency, and rely on active management by a central bank to control supply of the currency. Bitcoin's mechanism for control of the supply of the currency are algorithmic, and much has been said about them, but the value basis is ... less clear.