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Something that might be considered an "intrinsic" value of bitcoin is its ability to instantly and securely transfer wealth across large distances at zero or ne

Something that might be considered an "intrinsic" value of bitcoin is its ability to instantly and securely transfer wealth across large distances at zero or near-zero cost. This is an feature not present in some of the incumbent currencies and store-of-value assets. For example, physically shipping hundreds of kilograms of gold (or physical, folding USD) is a costly exercise fraught with security risks, and the risk profile varies depending on many factors, for instance the political situations in the sending and receiving countries. Transferring large amounts of electronic USD across international borders via the traditional banking system is going to invoke all kinds of reporting requirements, and possibly higher transaction costs (though you can do large wire transfers for like $25 I think). Transferring arbitrary amounts via bitcoin is easy, secure and the transaction itself is cost-effective (notwithstanding the current relative difficulty/expense of moving large amounts of fiat currency into and out of bitcoin in the first place, which problem I'd expect to ease as the btc economy matures).

TylerE 13y ago
I think you misunderstand me. I am talk about non-currency use. If the Bitcoin network collapses, you have nothing. The market for gold by definition cannot collapse to zero as it has non-currency industrial and decorative value.
- kdeforche 13y ago
  If the electricity collapses, the light goes out. Stay away from LEDs.
fat0wl 13y ago
This intrinsic value can be mirrored by any cryptocurrency or even just a parallel network of Bitcoin. It is no justification for $1000/coin the way overzealous BTC investors claim.
- VMG 13y ago
  Network Effect
- ericb 13y ago
  Any protocol could come along and displace http, or a parallel internet could come along and displace it. But we're going on 22 years now and that's how we're communicating. What if these protocols are not so easily displaced as you imagine?
  - ars_technician 13y ago
    The chain has already forked before. The community so far has managed to agree on which to follow. That might not be the case if a government like China interferes with the protocol, splitting it into two very active forks.
  - fat0wl 13y ago
    yeah as ars mentions, it's already happened... plus there is litecoin, buttcoin, etc etc When people compare to internet & DNS & things like that I get kinda pissed off. Those are standard protocol that we agree to because it helps ensure successful communication. Bitcoin is not anything like this stuff, it falls more into the category of "some code that runs on the internet". Think of it more like a website (Facebook) instead of providing the false analogy that its like the internet itself. If Facebook were an open-source trading platform and it started looking askew, what do you think people would do? (hint: open-source)
    - jafaku 13y ago
      Actually there is no buttcoin (other than the website), which is the proof that you are a troll.
      - fat0wl 13y ago
        if making a mild semantic error regarding the universe whose fundamental premises i believe are flawed makes me a troll, troll i am ad hominem is bad enough dont bring in semantics please. in bitcoin there are 3 types of people -- hypemongerSpeculators, techDesigners, nonBelievers. The hypemongers call all the nonbelievers trolls, the trolls talk trash to the hypemongers for blindly defending a greedpile, and the techDesigners (who are supposedly the enlightened HN readers) generally don't care. The only reason I even bring these arguments here is cuz all the HN headlines are hypemonger trash. I'm readying myself to accept this model of Bitcoin forums and move on, lol
- aryastark 13y ago
  $1000, for 1/12000000th the total current supply of bitcoins in existence? Sounds like a deal to me. The same fraction of USD is $100,000. There are 313 million people in the US. These are the majority of people using the dollar. There are 1.35 billion in China and another 1.2 billion in India. The former has already started using bitcoin. But only just barely. The market for bitcoin is enormous. Now let me ask you: do you really feel a global currency is worth less than $12 billion USD? The market cap for Facebook is $113 billion. Call me crazy, but I think there is more long term value in a digital currency with the properties of Bitcoin than a social network. In order for bitcoin to be useful, it's going to have to grow. If it grows fast (network effects) then you'll get instability. I don't think there is a solution to this unique problem. The fiat solution of printing more money doesn't apply here. There has never been a sudden rush to USD like there is to bitcoins. If you can even call a few billion dollars a "rush". If bitcoin is to be used, then it's going to see $1000/coin and beyond.
  - fat0wl 13y ago
    my god this is psychotic. i'm sorry, i try to be polite but.... jesus. i am 1000% confident that this particular bitcoin implementation of global currency is worth less than $12 billion USD. you are treating this currency like we are dividing up slices of the world money supply. We are not. People are paying $1000 and basically receiving an IOU from no one, with the hope they will be able to sell to future speculators. If Bitcoin succeeded as an actual currency, it would be trivial to implement new blockchains and many such systems would exist in parallel (Litecoin, Ripple?). But so far, Bitcoin has proven nothing regarding stability, it is just wowing naive investors by increasing in value rapidly. The problem in your analogy is that Facebook never sold accounts for $1000 because people are not that stupid, except when they start seeing $$ signs flash in front of their eyes. And why does it need to keep increasing in value if its divisible to like 6 decimal places? It's perfectly usable as a currency now. This is the internet, who the fuck needs WHOLE NUMBERS. Just....... jesus, man.
    - skinnycow 13y ago
      Is there any chance of you giving it a rest? We get it. You think Bitcoin and Bitcoiners are stupid. You passed Intro to Econ in college. You've drawn completely arbitrary lines in the sand and given nothing to justify them but emotional appeal. You, like many others, seem to waltz into every thread thinking that you've just independently come up with the fatal flaw of Bitcoin as it chugs along it's third year of existence. You display a nearly D-K effect when you act as if these are foregone conclusions with your "Just....... jesus, man." Especially after the catastrophe that was the last paragraph about price&divisibility. It's completely nonsense from an economic perspective. And there are clear benefits in using a highly divisible currency (and especially since it can be represented as a whole number... rather than a float. Ironic, whoops).
- weavejester 13y ago
  Bitcoin's security against double-spending is proportional to how many clock cycles are spent mining, which is affected by the price of Bitcoin. A parallel network with a far lower market cap would be less secure. $1000 per coin is speculation, but it's not particularly different from a startup people are buying into purely because of where it might be in five to ten years. The effect on Bitcoin is magnified somewhat because the maximum number of shares is capped. Unless something radically better than Bitcoin comes along, I don't see it being replaced any time soon.

TylerE 13y ago

I think you misunderstand me. I am talk about non-currency use. If the Bitcoin network collapses, you have nothing. The market for gold by definition cannot collapse to zero as it has non-currency industrial and decorative value.

kdeforche 13y ago
If the electricity collapses, the light goes out. Stay away from LEDs.

fat0wl 13y ago

This intrinsic value can be mirrored by any cryptocurrency or even just a parallel network of Bitcoin. It is no justification for $1000/coin the way overzealous BTC investors claim.

VMG 13y ago
Network Effect
ericb 13y ago
Any protocol could come along and displace http, or a parallel internet could come along and displace it. But we're going on 22 years now and that's how we're communicating. What if these protocols are not so easily displaced as you imagine?
- ars_technician 13y ago
  The chain has already forked before. The community so far has managed to agree on which to follow. That might not be the case if a government like China interferes with the protocol, splitting it into two very active forks.
- fat0wl 13y ago
  yeah as ars mentions, it's already happened... plus there is litecoin, buttcoin, etc etc When people compare to internet & DNS & things like that I get kinda pissed off. Those are standard protocol that we agree to because it helps ensure successful communication. Bitcoin is not anything like this stuff, it falls more into the category of "some code that runs on the internet". Think of it more like a website (Facebook) instead of providing the false analogy that its like the internet itself. If Facebook were an open-source trading platform and it started looking askew, what do you think people would do? (hint: open-source)
  - jafaku 13y ago
    Actually there is no buttcoin (other than the website), which is the proof that you are a troll.
    - fat0wl 13y ago
      if making a mild semantic error regarding the universe whose fundamental premises i believe are flawed makes me a troll, troll i am ad hominem is bad enough dont bring in semantics please. in bitcoin there are 3 types of people -- hypemongerSpeculators, techDesigners, nonBelievers. The hypemongers call all the nonbelievers trolls, the trolls talk trash to the hypemongers for blindly defending a greedpile, and the techDesigners (who are supposedly the enlightened HN readers) generally don't care. The only reason I even bring these arguments here is cuz all the HN headlines are hypemonger trash. I'm readying myself to accept this model of Bitcoin forums and move on, lol
aryastark 13y ago
$1000, for 1/12000000th the total current supply of bitcoins in existence? Sounds like a deal to me. The same fraction of USD is $100,000. There are 313 million people in the US. These are the majority of people using the dollar. There are 1.35 billion in China and another 1.2 billion in India. The former has already started using bitcoin. But only just barely. The market for bitcoin is enormous. Now let me ask you: do you really feel a global currency is worth less than $12 billion USD? The market cap for Facebook is $113 billion. Call me crazy, but I think there is more long term value in a digital currency with the properties of Bitcoin than a social network. In order for bitcoin to be useful, it's going to have to grow. If it grows fast (network effects) then you'll get instability. I don't think there is a solution to this unique problem. The fiat solution of printing more money doesn't apply here. There has never been a sudden rush to USD like there is to bitcoins. If you can even call a few billion dollars a "rush". If bitcoin is to be used, then it's going to see $1000/coin and beyond.
- fat0wl 13y ago
  my god this is psychotic. i'm sorry, i try to be polite but.... jesus. i am 1000% confident that this particular bitcoin implementation of global currency is worth less than $12 billion USD. you are treating this currency like we are dividing up slices of the world money supply. We are not. People are paying $1000 and basically receiving an IOU from no one, with the hope they will be able to sell to future speculators. If Bitcoin succeeded as an actual currency, it would be trivial to implement new blockchains and many such systems would exist in parallel (Litecoin, Ripple?). But so far, Bitcoin has proven nothing regarding stability, it is just wowing naive investors by increasing in value rapidly. The problem in your analogy is that Facebook never sold accounts for $1000 because people are not that stupid, except when they start seeing $$ signs flash in front of their eyes. And why does it need to keep increasing in value if its divisible to like 6 decimal places? It's perfectly usable as a currency now. This is the internet, who the fuck needs WHOLE NUMBERS. Just....... jesus, man.
  - skinnycow 13y ago
    Is there any chance of you giving it a rest? We get it. You think Bitcoin and Bitcoiners are stupid. You passed Intro to Econ in college. You've drawn completely arbitrary lines in the sand and given nothing to justify them but emotional appeal. You, like many others, seem to waltz into every thread thinking that you've just independently come up with the fatal flaw of Bitcoin as it chugs along it's third year of existence. You display a nearly D-K effect when you act as if these are foregone conclusions with your "Just....... jesus, man." Especially after the catastrophe that was the last paragraph about price&divisibility. It's completely nonsense from an economic perspective. And there are clear benefits in using a highly divisible currency (and especially since it can be represented as a whole number... rather than a float. Ironic, whoops).
weavejester 13y ago
Bitcoin's security against double-spending is proportional to how many clock cycles are spent mining, which is affected by the price of Bitcoin. A parallel network with a far lower market cap would be less secure. $1000 per coin is speculation, but it's not particularly different from a startup people are buying into purely because of where it might be in five to ten years. The effect on Bitcoin is magnified somewhat because the maximum number of shares is capped. Unless something radically better than Bitcoin comes along, I don't see it being replaced any time soon.