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>> Physical money has intrinsic value equal to the metal or paper it's made of. Of course that is not what makes physical money valuable and I am equally confus
by w0utert 13y ago
>> Physical money has intrinsic value equal to the metal or paper it's made of. Of course that is not what makes physical money valuable and I am equally confused by that quote.
USD/EUR/JPY currency (either physical as bank notes and coins, or electronic) has intrinsic value because it is almost universally accepted, taxable, and backed by debt that (at least in theory) will have to be repaid at some point in time. Bitcoin proponents like to point out that bitcoins are decentralized as if that's only an advantage of the currency, but it's the fact that commonly accepted currencies are centralized, controlled and regulated that makes them trustworthy enough that people keep accepting them in exchange for goods or labor. It's called 'fiat money' for a reason. Bitcoin has none of this, and the 'value' it derives from the 'trust' people buying them is based on nothing but speculation and hype. Anyone who thinks otherwise is fooling themselves.
Disclaimer: I'm not 'anti-bitcoin', 'anti-cryptocurrency', 'pro-government' or a big fan of fiat money and how central banks are handling it. I'm just stating my observation how the bitcoin hype and echo-chamber has made people almost blind to see the risk it will some day go to zero (maybe soon)
- jc123 13y agoWell said IMO. It's been a while since tulip mania and could bitcoin be a modern day version? Same disclaimer as above.
- wyager 13y agoThe tulip mania is probably a myth.
- deleted 13y ago[deleted]
- wyager 13y agoIf you consider those things to bestow "intrinsic value" (a fallacious concept), the Bitcoin has "intrinsic value" because it is portable, divisible, fungible, scarce, and has all the other properties we want from a scarcity-based currency while having all the great benefits (and more) of digital fiat money.
- XorNot 13y agoBitcoin isn't portable (you can't carry it, try using it without the internet). All regular currencies are fungible and its super-questionable that BTC is divisible (the network can't handle more then what, a million transactions per second? What's the use of a currency that splits into microscopic sizes if you can't make lots of micropayments with it).
- aryastark 13y agoThis must be red herring day on HN. USD may be the most ubiquitous currency on the planet. However, go visit a country like Japan. Once you're out of reach of any currency exchange, you won't have much luck using your USD. Ironically, you'll have better luck using a Visa/Mastercard (which, btw, are not used anywhere other than perhaps ATMs). Those credit cards require a network to be used. I've been to Internet cafes in Japan. But I never bought a single thing with USD. I don't see Bitcoin having any issues here. Internet is more widely available than places that take whatever your paper currency is. You can easily take Bitcoin with you. You take your credit card with you. Both require electronic communication to work. There is no difference here.
- XorNot 13y agoOnce your out of the reach of any currency exchange, you won't be able to use Bitcoin either, what's your point? The difference is, all national currencies have an offline only form which is good anywhere within that nation. Bitcoin does not.
- repsilat 13y agoThe value of money is grounded by the fact that you have to pay your taxes in it or you go to jail. This doesn't determine the absolute value or prices, but it stabilises them. This stability is the inductive step that allows the "base case" value derived from the gold standard to filter through to the present (minus inflationary effects).