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> The argument is whether the value of commodities or currencies are subjective, or whether they are ultimately derived from labor. Bitcoin partisans believe th

> The argument is whether the value of commodities or currencies are subjective, or whether they are ultimately derived from labor. Bitcoin partisans believe the former, I believe the latter. And what about the labor which went into designing and coding the bitcoin software, the exchanges, and so forth? Do you think all that labor was worthless (we don't even have to include the "mining" capital and labor in this judgement)? Well, then the value of labor is apparently just as subjective as the value of commodities. So I don't follow how a premise involving STV vs LTV can be used to make a logical argument about the value of bitcoin, or any software for that matter.

Ologn 13y ago
Labor goes into mining gold, extracting gold etc. But it can then be used for capping teeth, heat shields, photographic equipment etc., as well as for a currency. Labor does go into "mining" bitcoins. People build Bitcoin ASICs, people pay people to drill oil to make the electricity that powers those ASICs etc. But gold has a number of real use values. Bitcoin has no real use value. It is inherently worthless. People have used all kinds of commodities through history as currency. Cows, rice etc. As precious metals like gold are portable, storable, easily divisible, standardized etc. they make good currencies. An ounce of gold is the same as another ounce of gold, while rice goes bad, cows die, and one cow may give more milk than another. But the value still comes from its underlying usefulness as an industrial metal etc. Bitcoins have no underlying value such as this.
- kylebrown 13y ago
  But the industrial value of gold only accounts for a fraction of its price. The recent gold bubble/run-up shows that pretty clearly (the price changed much quicker and independent of its potential industrial uses). So the fact that gold has traditional and industrial uses doesn't really help to justify its "value" or its current price (especially when price is far above industrial demand). Its true that bitcoin doesn't have an underlying value as an industrial metal (obviously). But it does have an underlying value, primarily that it is distributed/un-seizable e-cash. This differentiates it from previous e-currency systems maintained by a central authority: paypal.com, libertyreserve.com, e-gold.com, notice these are all tied to an authoritative domain name, whereas bitcoin is not. The intrinsic property of being decentralized/p2p, enables the notable use-value of purchasing controlled substances from the tor hidden node Silk Road. There is no other way to purchase items from that market. This sort of use-value is comparable to the use-value we could assign to something like Facebook: that there is no other way to view the original content which others have posted there. Or to USD since there is no other way to pay taxes. I think it'd help your argument if you compared bitcoin to other virtual economies/currencies (facebook or facebook credits, paypal, eBay etc). Its obvious that bitcoin is not like gold and won't be valued for the exact same reasons. But see if you can come up with unique reasons why facebook and paypal (note that shares in neither company pay dividends) should have value whereas bitcoin should not.
- oleganza 13y ago
  As I mentioned in other replies already, Bitcoin allows certain non-monetary uses that are not possible with any other technology. E.g. registering your document with a timestamp with no counter-party risk. Or mutually-locking funds without a 3rd party. Or using a third party arbitrator without giving it full access to the funds (only a fee and a right to decide where the funds go: to party A or party B). Bitcoin is not just a payment protocol. It's a global unbreakable consensus mechanism allowing enforcement of complex contracts without any guns or policemen.

Ologn 13y ago

Labor goes into mining gold, extracting gold etc. But it can then be used for capping teeth, heat shields, photographic equipment etc., as well as for a currency. Labor does go into "mining" bitcoins. People build Bitcoin ASICs, people pay people to drill oil to make the electricity that powers those ASICs etc. But gold has a number of real use values. Bitcoin has no real use value. It is inherently worthless. People have used all kinds of commodities through history as currency. Cows, rice etc. As precious metals like gold are portable, storable, easily divisible, standardized etc. they make good currencies. An ounce of gold is the same as another ounce of gold, while rice goes bad, cows die, and one cow may give more milk than another. But the value still comes from its underlying usefulness as an industrial metal etc. Bitcoins have no underlying value such as this.

kylebrown 13y ago
But the industrial value of gold only accounts for a fraction of its price. The recent gold bubble/run-up shows that pretty clearly (the price changed much quicker and independent of its potential industrial uses). So the fact that gold has traditional and industrial uses doesn't really help to justify its "value" or its current price (especially when price is far above industrial demand). Its true that bitcoin doesn't have an underlying value as an industrial metal (obviously). But it does have an underlying value, primarily that it is distributed/un-seizable e-cash. This differentiates it from previous e-currency systems maintained by a central authority: paypal.com, libertyreserve.com, e-gold.com, notice these are all tied to an authoritative domain name, whereas bitcoin is not. The intrinsic property of being decentralized/p2p, enables the notable use-value of purchasing controlled substances from the tor hidden node Silk Road. There is no other way to purchase items from that market. This sort of use-value is comparable to the use-value we could assign to something like Facebook: that there is no other way to view the original content which others have posted there. Or to USD since there is no other way to pay taxes. I think it'd help your argument if you compared bitcoin to other virtual economies/currencies (facebook or facebook credits, paypal, eBay etc). Its obvious that bitcoin is not like gold and won't be valued for the exact same reasons. But see if you can come up with unique reasons why facebook and paypal (note that shares in neither company pay dividends) should have value whereas bitcoin should not.
oleganza 13y ago
As I mentioned in other replies already, Bitcoin allows certain non-monetary uses that are not possible with any other technology. E.g. registering your document with a timestamp with no counter-party risk. Or mutually-locking funds without a 3rd party. Or using a third party arbitrator without giving it full access to the funds (only a fee and a right to decide where the funds go: to party A or party B). Bitcoin is not just a payment protocol. It's a global unbreakable consensus mechanism allowing enforcement of complex contracts without any guns or policemen.