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Bitcoins are worthless precisely because the Subjective Theory of Value is wrong. Benjamin Franklin, Adam Smith and all the early economists thought the Subjec

by Ologn 12y ago

Bitcoins are worthless precisely because the Subjective Theory of Value is wrong. Benjamin Franklin, Adam Smith and all the early economists thought the Subjective Theory of Value was wrong. Because it is wrong. Bitcoin is a little scam which justifies itself against the backdrop of a much bigger scam. Gold is valuable because it takes effort to find, mine and refine. People want to exchange other valuable things for it because it is useful - dentists use it to fill teeth, it is used as an electronics coating since it conducts electricity well, and so forth. People have used gold as a currency for thousands of years, but that is only because it has traits that make it a good commodity, such as durability, portability, uniformity and divisibility. Bitcoins have no value of this type. Which is why it has fallen from $1160 to $326, and will fall to $0.

nicky0 12y ago
"The theory is wrong because it is wrong". Thanks for that.
Vendan 12y ago
My wife's dentist didn't use gold for her teeth, Copper and silver are better conductors. Gold's only useful quality is that it doesn't tarnish. Ask yourself this, on a desert island, what's more valuable, 5 pounds of potatoes or 5 pounds of gold? I'd pick the potatoes, myself. Sounds like the value is subjective to me...
- dec0dedab0de 12y ago
  sure, but I think the point was that if suddenly everyone stopped trading gold it could still be useful to someone. Whereas if everyone stopped trading bitcoin it would not be useful to anyone.
  - jafaku 12y ago
    Wrong, the Bitcoin blockchain has many uses. For example: http://proofofexistence.com/ http://proofofexistence.com/
  - Vendan 12y ago
    everyone stopping trading gold would only happen if everyone stopped using gold, so how is it still useful. Imagine, if you would, a machine that can make as much of something as you want, replicating it from nothing. Put gold through it. Is there anything about the gold that would prop it's value up above the pure value of the effort required to push the button? If gold is valued because of both scarcity and subjective value, what makes bitcoin any different? It has scarcity, and people subjectively value it.
jasonpbecker 12y ago
Except that gold's value is not evenly remotely tied to its use value. If it were, gold would be worth a small fraction of its current price.
- Ologn 12y ago
  Precious metals are a commodity like any other commodity. They are valuable because people had to spend effort finding and mining them, and because people find them useful enough to exchange other valuable commodities for them. Their price, measured across decades going thousands of years back, is tied to their use value. It is true the prices can be manipulated over the short term - in 1979, the Hunt brothers made silver go from $6 an ounce to $48 an ounce before it crashed back down. Over the long term though, the value of commodities are tied to their value - how hard it is to find and mine gold, and whether people find it useful enough to exchange other valuable things for it.
  - Vendan 12y ago
    In other words, their subjective value? Gold has no value to me at all, as I don't have any use for it. If you tried to sell me gold, the only reason I'd buy it is if I could immediately resell it for a profit. My subjective value of gold is, therefore, $0.
    - tim333 12y ago
      The price of gold is not really determined by it's subjective value. It's determined by the cost to mine the stuff. The reason 5 lbs of potatoes cost like $5 and 5 lbs of gold costs like $90,000 is because that's what it costs to dig them up even if you prefer the potatoes.
      - DanBC 12y ago
        Why does the price of gold fluctuate so much? Is it reLly because it becomes harder or easier to mine gold?
      - 12y ago
mpyne 12y ago
> Gold is valuable because it takes effort to find, mine and refine. Other way around, people spend effort to find, mine and refine gold precisely because it's subjectively valuable. That's always been the ironic thing to me about Bitcoin, is that by establishing that people can attach subjective value to things (like computer bits), it proves that fiat currencies can work too precisely because subjective value exists. Likewise I doubt Bitcoin would ever fall all the way to $0, simply because there will always been enough believers "holding the bag" and trying to loop people into the "Internet funbux" club to maintain the value at some low (but non-zero) level.
tim333 12y ago
>[gold has] durability, portability, uniformity and divisibility. You could argue bitcoin effectively has those qualities too. It also has a cost to mine which may peg its cost in the same way that the cost to mine gold does its. The thing that worries me about bitcoin as an investment is it can be replaced easily by dogecoin or whatever-coin with basically the same properties whereas there is nothing else quite like gold.

by Ologn 12y ago

nicky0 12y ago

"The theory is wrong because it is wrong". Thanks for that.

Vendan 12y ago

My wife's dentist didn't use gold for her teeth, Copper and silver are better conductors. Gold's only useful quality is that it doesn't tarnish. Ask yourself this, on a desert island, what's more valuable, 5 pounds of potatoes or 5 pounds of gold? I'd pick the potatoes, myself. Sounds like the value is subjective to me...

dec0dedab0de 12y ago
sure, but I think the point was that if suddenly everyone stopped trading gold it could still be useful to someone. Whereas if everyone stopped trading bitcoin it would not be useful to anyone.
- jafaku 12y ago
  Wrong, the Bitcoin blockchain has many uses. For example: http://proofofexistence.com/ http://proofofexistence.com/
- Vendan 12y ago
  everyone stopping trading gold would only happen if everyone stopped using gold, so how is it still useful. Imagine, if you would, a machine that can make as much of something as you want, replicating it from nothing. Put gold through it. Is there anything about the gold that would prop it's value up above the pure value of the effort required to push the button? If gold is valued because of both scarcity and subjective value, what makes bitcoin any different? It has scarcity, and people subjectively value it.

jasonpbecker 12y ago

Except that gold's value is not evenly remotely tied to its use value. If it were, gold would be worth a small fraction of its current price.

Ologn 12y ago
Precious metals are a commodity like any other commodity. They are valuable because people had to spend effort finding and mining them, and because people find them useful enough to exchange other valuable commodities for them. Their price, measured across decades going thousands of years back, is tied to their use value. It is true the prices can be manipulated over the short term - in 1979, the Hunt brothers made silver go from $6 an ounce to $48 an ounce before it crashed back down. Over the long term though, the value of commodities are tied to their value - how hard it is to find and mine gold, and whether people find it useful enough to exchange other valuable things for it.
- Vendan 12y ago
  In other words, their subjective value? Gold has no value to me at all, as I don't have any use for it. If you tried to sell me gold, the only reason I'd buy it is if I could immediately resell it for a profit. My subjective value of gold is, therefore, $0.
  - tim333 12y ago
    The price of gold is not really determined by it's subjective value. It's determined by the cost to mine the stuff. The reason 5 lbs of potatoes cost like $5 and 5 lbs of gold costs like $90,000 is because that's what it costs to dig them up even if you prefer the potatoes.
    - DanBC 12y ago
      Why does the price of gold fluctuate so much? Is it reLly because it becomes harder or easier to mine gold?
    - 12y ago

mpyne 12y ago

> Gold is valuable because it takes effort to find, mine and refine. Other way around, people spend effort to find, mine and refine gold precisely because it's subjectively valuable. That's always been the ironic thing to me about Bitcoin, is that by establishing that people can attach subjective value to things (like computer bits), it proves that fiat currencies can work too precisely because subjective value exists. Likewise I doubt Bitcoin would ever fall all the way to $0, simply because there will always been enough believers "holding the bag" and trying to loop people into the "Internet funbux" club to maintain the value at some low (but non-zero) level.

tim333 12y ago

>[gold has] durability, portability, uniformity and divisibility. You could argue bitcoin effectively has those qualities too. It also has a cost to mine which may peg its cost in the same way that the cost to mine gold does its. The thing that worries me about bitcoin as an investment is it can be replaced easily by dogecoin or whatever-coin with basically the same properties whereas there is nothing else quite like gold.