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Quoted that for you: As a thought experiment, imagine there was a base metal as scarce as gold but with the following properties: - boring grey in colour - not

Quoted that for you: As a thought experiment, imagine there was a base metal as scarce as gold but with the following properties: - boring grey in colour - not a good conductor of electricity - not particularly strong, but not ductile or easily malleable either - not useful for any practical or ornamental purpose and one special, magical property: - can be transported over a communications channel If it somehow acquired any value at all for whatever reason, then anyone wanting to transfer wealth over a long distance could buy some, transmit it, and have the recipient sell it. Maybe it could get an initial value circularly as you've suggested, by people foreseeing its potential usefulness for exchange. (I would definitely want some) Maybe collectors, any random reason could spark it. I think the traditional qualifications for money were written with the assumption that there are so many competing objects in the world that are scarce, an object with the automatic bootstrap of intrinsic value will surely win out over those without intrinsic value. But if there were nothing in the world with intrinsic value that could be used as money, only scarce but no intrinsic value, I think people would still take up something. (I'm using the word scarce here to only mean limited potential supply)

digitalengineer 13y ago
Good link in your links: As I see it, BitCoins do qualify as money when they are used as currency — which they actually are — because they are present goods, the same way that software or an mp3 file are also a present goods. And they are useful as currency because they have good properties as a medium of exchange: They are scarce, homogeneus, difficult to fake, easy to identify (this could be improved), easy to transport, divisible, etc. The perceived utilitiy of these properties is what makes Bitcoins valuable. Purchasing power is a consequence of utility, not the opposite. It would make the BitCoins value more stable if they could be used for a non monetary purpose. Maybe some cryptographic application? I think that it would be a good idea for the BitCoin community to research for a non monetary utility for the BitCoins. As long as BitCoins don´t have a non monetary utility, Mises followers are correct when they say that if BitCoins loses its currency status, then their value would drop to zero, the question is, how much value would also lose silver or gold if they were not used as currency or store of value anymore? BitCoins are not risk-free, as nothing in life is risk-free. It´s a matter of choice. Gold has been valuable for over 4.000 years, Bitcoins? 4, and that's already longer than the Tulip Mania ;-) We'll see how it works out but it sure is interesting. http://eleconomistaprudente.wordpress.com/2011/06/06/bitcoins-and-mises%C2%B4s-regression-theorem/ http://eleconomistaprudente.wordpress.com/2011/06/06/bitcoin...

digitalengineer 13y ago

Good link in your links: As I see it, BitCoins do qualify as money when they are used as currency — which they actually are — because they are present goods, the same way that software or an mp3 file are also a present goods. And they are useful as currency because they have good properties as a medium of exchange: They are scarce, homogeneus, difficult to fake, easy to identify (this could be improved), easy to transport, divisible, etc. The perceived utilitiy of these properties is what makes Bitcoins valuable. Purchasing power is a consequence of utility, not the opposite. It would make the BitCoins value more stable if they could be used for a non monetary purpose. Maybe some cryptographic application? I think that it would be a good idea for the BitCoin community to research for a non monetary utility for the BitCoins. As long as BitCoins don´t have a non monetary utility, Mises followers are correct when they say that if BitCoins loses its currency status, then their value would drop to zero, the question is, how much value would also lose silver or gold if they were not used as currency or store of value anymore? BitCoins are not risk-free, as nothing in life is risk-free. It´s a matter of choice. Gold has been valuable for over 4.000 years, Bitcoins? 4, and that's already longer than the Tulip Mania ;-) We'll see how it works out but it sure is interesting. http://eleconomistaprudente.wordpress.com/2011/06/06/bitcoins-and-mises%C2%B4s-regression-theorem/ http://eleconomistaprudente.wordpress.com/2011/06/06/bitcoin...