5 ms·

> He's entirely correct in saying Bitcoin has zero inherent value, as opposed to gold and USD. No, no, he is NOT correct on that. Bitcoin's inherent value is i

by greyman 13y ago

> He's entirely correct in saying Bitcoin has zero inherent value, as opposed to gold and USD. No, no, he is NOT correct on that. Bitcoin's inherent value is in the Bitcoin technology. Inherent value of USD is that government declared it has value (by fiat). You can actually create "pretty things" with bitcoin technology, the same way you can create pretty things with gold - those are just other things.

etjossem 13y ago
The United States is a superpower that many people enjoy calling home (you may even be among them), and it will probably be around for a good long while. If you chose to live there, you have a civic obligation to pay taxes, which are accepted in USD. If that's not inherent value, I'm really not sure what is. Nobody believes the Bitcoin protocol itself is beautiful in the same sense as gold, although I do know a few computer scientists who might find it intriguing. I suppose you could make the case that the ability to make anonymous transfers has some inherent value - but even that depends on how well BTC is adopted as a medium of exchange.
- icelancer 13y ago
  > If you chose to live there, you have a civic obligation to pay taxes, which are accepted in USD. 1) Can you produce my signature on said document that certified this contract? 2) Let's assume I choose to expatriate because I no longer wish to pay taxes and support this country's views. Why, then, might I owe a large "exit tax" upon leaving when I've already paid capital gains tax, income tax, sales tax...
prostoalex 13y ago
> Inherent value of USD is that government declared it has value (by fiat). Wait, what? Definition of fiat currency is the one that has no intrinsic value. USD's intrinsic value is the paper and the metal used to manufacture it.
- greyman 13y ago
  Ok, but I think the point is clear. USD has value because U.S. government said so and people trust that government, and Bitcoin has value because some people trust the Bitcoin network as the "currency issuer". If we imagine a scenario, where a majority of businesses will accept bitcoins, and people will be able to buy bitcoins and use either dollars or btc for payments, and both methods will be legal, we will see that dollar doesn't have any more "intrinsic value" (whatever that means) as bitcoin. It will be just two competing payment systems with different attributes.
  - prostoalex 13y ago
    Right, the trust in the future spending power makes a currency not only a medium of exchange, but a medium of store. It seems that as far as alternative currencies are concerned, altcoins have a better chance of being spread. What's to prevent Amazon from coming up with AmazonCoin, pre-mining an entire AmazonCoin set for themselves, and then offer this altcoin with a liquidity guarantee on largest retail site. Nothing to prevent them from accepting BTC, but I think any US retailer would be prone to quickly trade in BTC for USD after the transaction is completed, as there's volatility risk, and payments to merchants and the tax man are due in USD anyways.
    - XorNot 13y ago
      Amazon gift cards are already this.
      - deleted 13y ago
        [deleted]
- haakon 13y ago
  Every HN post on Bitcoin has to have a discussion about the definition of fiat money. Fiat literally means "it shall be"; in terms of fiat money this refers to government's declaration that something is legal tender. The US declares that the dollar is to be used as money - that makes the USD fiat money. Enough people use the term to refer to money which has no "intrinsic value" that the term now means both things. Personally I think that's nonsensical – if the US declared that gold coins are to replace the USD as legal tender, then those gold coins would be fiat money, regardless of any intrinsic value gold might have. But you can't argue against language evolution; "fiat money" has two different and unrelated definitions now, and we need to repeatedly have arguments ending in both sides being correct and nothing of value being concluded. This discussion must now, as is tradition, be followed up by a discussion of what intrinsic value means and whether it exists. So go on, discuss.

by greyman 13y ago

etjossem 13y ago

The United States is a superpower that many people enjoy calling home (you may even be among them), and it will probably be around for a good long while. If you chose to live there, you have a civic obligation to pay taxes, which are accepted in USD. If that's not inherent value, I'm really not sure what is. Nobody believes the Bitcoin protocol itself is beautiful in the same sense as gold, although I do know a few computer scientists who might find it intriguing. I suppose you could make the case that the ability to make anonymous transfers has some inherent value - but even that depends on how well BTC is adopted as a medium of exchange.

icelancer 13y ago
> If you chose to live there, you have a civic obligation to pay taxes, which are accepted in USD. 1) Can you produce my signature on said document that certified this contract? 2) Let's assume I choose to expatriate because I no longer wish to pay taxes and support this country's views. Why, then, might I owe a large "exit tax" upon leaving when I've already paid capital gains tax, income tax, sales tax...

prostoalex 13y ago

> Inherent value of USD is that government declared it has value (by fiat). Wait, what? Definition of fiat currency is the one that has no intrinsic value. USD's intrinsic value is the paper and the metal used to manufacture it.

greyman 13y ago
Ok, but I think the point is clear. USD has value because U.S. government said so and people trust that government, and Bitcoin has value because some people trust the Bitcoin network as the "currency issuer". If we imagine a scenario, where a majority of businesses will accept bitcoins, and people will be able to buy bitcoins and use either dollars or btc for payments, and both methods will be legal, we will see that dollar doesn't have any more "intrinsic value" (whatever that means) as bitcoin. It will be just two competing payment systems with different attributes.
- prostoalex 13y ago
  Right, the trust in the future spending power makes a currency not only a medium of exchange, but a medium of store. It seems that as far as alternative currencies are concerned, altcoins have a better chance of being spread. What's to prevent Amazon from coming up with AmazonCoin, pre-mining an entire AmazonCoin set for themselves, and then offer this altcoin with a liquidity guarantee on largest retail site. Nothing to prevent them from accepting BTC, but I think any US retailer would be prone to quickly trade in BTC for USD after the transaction is completed, as there's volatility risk, and payments to merchants and the tax man are due in USD anyways.
  - XorNot 13y ago
    Amazon gift cards are already this.
    - deleted 13y ago
      [deleted]
haakon 13y ago
Every HN post on Bitcoin has to have a discussion about the definition of fiat money. Fiat literally means "it shall be"; in terms of fiat money this refers to government's declaration that something is legal tender. The US declares that the dollar is to be used as money - that makes the USD fiat money. Enough people use the term to refer to money which has no "intrinsic value" that the term now means both things. Personally I think that's nonsensical – if the US declared that gold coins are to replace the USD as legal tender, then those gold coins would be fiat money, regardless of any intrinsic value gold might have. But you can't argue against language evolution; "fiat money" has two different and unrelated definitions now, and we need to repeatedly have arguments ending in both sides being correct and nothing of value being concluded. This discussion must now, as is tradition, be followed up by a discussion of what intrinsic value means and whether it exists. So go on, discuss.