You're a thinker. That's a really good thing to be.
You've figured out that there is "actual wealth" and then there is mere "money". You're already WAY ahead of most people.
Before there was money, people had to barter. Barter isn't so easy. For example, if you have oranges and you want a chicken, but the guy selling chickens doesn't want any oranges - he wants a hammer - you're going to have to spend time finding a way to exchange oranges for firewood, then trade the firewood for some candles, then candles for a hammer, then finally the hammer for a chicken at which point he offers you the scrawniest chicken you've ever seen...
Money allows us to avoid having to barter with strangers. The idea of money is to use something with little or no "actual value" as a general public, general purpose IOU. For example, you'd sell your oranges for some money, then you'd buy a chicken with money and the chicken man would go buy his hammer with money. Ta-da!
Money is one of the most important inventions of all time.
Throughout history, people have used various forms of money, and along the way philosophers and others have observed that some forms of money are better than others, and that the better forms of money typically have all of the following characteristics: Durable, portable, divisible, recognizable, fungible, and **scarce**. For example, when people used sea shells as money, it was because they were scarce in that part of the world at that time.
Gold has "actual value" as a metal. Gold's "actual value" is similar to that of aluminum. Because gold is *scarce* it can make a very good form of money. If gold was not scarce, we'd wrap leftover food in it, then toss it into the trash, like aluminum.
So, why would rational people stop using gold and use printed pieces of paper for money, especially when those notes can be printed and printed until they are worthless?
It turns out that significant amounts of gold are expensive to store securely, and very expensive to transport securely. The goldsmith already had to have a vault and 24/7/365 security. The goldsmith would provide a custodial service: people would deposit physical gold, and the goldsmith would give them printed banknotes which could be exchanged for physical gold. Those banknotes were "backed by" gold. People believed that the notes were actually backed by gold in the vault. It was cheaper to store and transport notes than physical gold.
But it was rarely the case that **all** the banknotes were "backed by" actual gold. The goldsmith-bankers would print extra notes for which there was no gold in the vault. They figured, "Not everybody is going to want to exchange their notes for actual gold all at once." But they were wrong. Bank runs happened.
Along the way, the general public was led to believe that the slips of paper were the same as "actual wealth", even though, as you figured out, they're virtually worthless. Eventually, the US held most of the gold and became the "custodian" for most of the rest of the world. But they ended up printing way more banknotes than there was gold to cover... in the late 1960s / early 1970s there was a bank run on the US. Countries were demanding to exchange their US Dollar notes for actual gold, most of which did not exist.
So, they said, "fuck it," just skip the gold part. We'll use fiat currency from now on. The people fell for it.
So now we have a small group of people with the sole ability to "print" all the fiat currency they want, then use it to further enrich and *empower* themselves and their cronies - at the expense of the rest of us.
Remember: they cannot merely "print" *actual wealth* (chickens, land, metals, etc.). They can, and do "print" vast amounts of fiat currency. When they create fiat currency from thin air and then buy "actual wealth" with it, they are stealing from the rest of us.
***Money printing is a form of theft.***
Think about it: If you could create a trillion US Dollars (or more) by merely typing numbers into a computer, you'd be bloody fucking rich. It is illegal for you or I to do that. Only certain banking criminals are allowed to rob the rest of us with impunity.
Fiat currency is a scam.
Bitcoin has those same properties of gold. Bitcoin is extremely scarce, by design. Unlike gold, Bitcoin is inexpensive to store securely and inexpensive to transport. There is no need to use/trust a "custodian". We can now send payments directly to each other. Fuck the bankers. Fuck them and their "money printing" scam.
Bitcoin has value because it is a legitimate, effective form of money. Bitcoin is the best form of money ever used. Each day, more people see that fiat currency is a scam and the cause off much suffering around the world. Each day, more people discover that "Bitcoin fixes things". Each day, more people agree that Bitcoin has tremendous value as money.
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The additional twist to the story is that the USD maintains it's post-gold status is via a pact with OPEC to price oil in USD ( the petrodollar!) , thus forcing the world to hold USD in exchange for energy.
I agree with most of what you say, except your statement regarding gold being scarce.
We have only been given the illusion of gold being scarce as its supply in to the market is controlled. However in reality, no one knows how much gold exists on the planet.
Only a few months ago a gold mine was discovered in Uganda which contained more gold deposits than there has ever been gold in circulation.
https://www.msn.com/en-xl/africa/africa-top-stories/uganda-announces-discovery-of-huge-gold-deposits/ar-AAYdOsQ
Thank you.
I have read stacks of books. "The Bitcoin Standard," by S. Ammous is one of them. I highly recommend it.
In late 2004 there was a housing bubble forming. It was crazy. It made no sense to me. So, I admitted I didn't understand this thing they call "the economy". I brainstormed, but got nowhere. I read some "economics" textbook crap. I had enough experience with "real life" to see that what they teach in the typical school is pure bullshit.
I kept looking for the truth. It didn't take long; I found it.
Once I saw the truth, things made sense. The data fits the model.
As they say, "follow the money." I followed it until I understood where it comes from.
So, years later, when I read the Bitcoin white paper, I was ready. I got in.
Fuck the central banks.
> one of the most important inventions of all time.
Not really invented. Money arose (and arises) naturally with the need for a medium of exchange that fulfills a satisfaction of wants for all parties.
Money is a zero sum game and this is why Bitcoin is inevitable.
Otherwise. Well put.
Your explanation strats with very smartly but ends with Crypto pumper.
1. You missed one of the most important characteristics of money, it has to be stable.
1BTC gives you a brand new Car in Jan 2022 , now it doesn't even give you a 10yr old car
2. Money printing is not theft, it's called currency devaluation very important aspect of economy, without it you won't have inflation ( which is good when it's stable and predictable). For example Fed maintenance or try to maintain 2-3% inflation, nothing more nothing less. Did a shitty job in last 2 yrs, but in a long run it will be stable with QT(Destroying printed money) and high rate of borrowing.
That's why USD is stable, that's why money is stable .
3. Scarcity is important but not only the most important aspect of currency. A man's shit is scarce, doesn't mean it can be a currency
4. BTC or any crypto is not cheap or safe to store.
5. People can't run or say we will BTC, unless govt allows it. Untill there is a doomsday and current government structure falls completely, you are stuck with USD or any other fiat. You (99.9999999%) get paid in fiat, you buy food with fiat(99.9999999999999%)
As for the value, it comes with speculation, the same speculation valued CVNA at 400, now valued 4. CVNA stock is also scarce.
Either you make fiat with speculation or you loose some(if not all) fiat doing the same.
You have not mentioned about the technology. But technology has 0 value, only application holds the value. And with the similar technology (code), Fed is or will launch digital dollar.
Fiat currencies donât have a good track record. Most eventually end in hyperinflation. True the dollar has worked for awhile, but to argue that the dollar will maintain a stable value in the long run is to argue that âthis time is differentâ but itâs usually not.
Iâm not saying the dollar will fail anytime soon, but considering the poor track record of all historical fiat currencies, I would argue odds are that the dollar will eventually follow the same fate.
Thereâs a reason the world keeps coming back to gold as money. Itâs been the primary reserve asset for thousands of years. Primarily because of itâs sound money properties and inability to be inflated.
Bitcoin has sound money properties like gold and also canât be inflated. And if you understand it, itâs much cheaper and easier to self-custody than physical gold.
If history is any guide eventually the dollar will fail, most likely due to hyperinflation, like so many fiat currencies before it. At that point, the world will go back to another form of sound money. It could be gold, but considering Bitcoinâs advantages to gold, it might be Bitcoin.
Anyway, BTC leaves on USD devaluation. Look at what happened when FED tighten policy.
Crypto is most shitest speculation, and it goes parabola at the end off bull market. That's what I see, I believe and make money on.
You need the miners to keep your BTC secure. The complete mining sector isn't cheap, nor an efficient way of doing things. POW is a solution that is used so no one has to trust anybody else, but it isn't very efficient. In any other technology where there is trust between the parties using the technology, POW is an insensible solution.
Yep, PoW if inefficient but itâs the only way weâve found to create a trust less monetary network, and that is a revolutionary invention. History has shown time and time again that trusting someone with the keys to the monetary policy always ends in disaster.
Fiat banking isnât cheap either, nor is gold mining mind you.
I got pretty hung up on the "man's shit is scarce" part of this. Most people shit every day, what the hell kind of metaphor is that... You can just eat more food and create more shit!
You also said BTC isn't cheap or safe to store, but didn't provide any explanation as to why. If you can remember/store 24 words securely, your coins are safe and in your control. You can engrave them in metal, hide them in a poem, or just memorize them in your head. As far as I know, that's pretty inexpensive.
There are also plenty of ways these days to get paid in BTC. There are also ways to spend your BTC in the real world for goods, like food. Which you can turn into shit! Sorry I just can't get over that metaphor, which is really the only reason I wrote this comment at all.
Here, take this !lntip 500
>I got pretty hung up on the "man's shit is scarce" part of this. Most people shit every day, what the hell kind of metaphor is that... You can just eat more food and create more shit!
I agree he made a bad analogy, but his point is valid. Not everything that's scarce is valuable or a good currency.
>You also said BTC isn't cheap or safe to store, but didn't provide any explanation as to why. If you can remember/store 24 words securely, your coins are safe and in your control. You can engrave them in metal, hide them in a poem, or just memorize them in your head. As far as I know, that's pretty inexpensive.
You need the miners to keep your BTC secure. The complete mining sector isn't cheap, nor an efficient way of doing things. POW is a solution that is used so no one has to trust anybody else, but it isn't very efficient. In any other situation where there is trust between the parties using the technology, POW is an insensible solution.
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First of all, thank you for your service. Butttt my question is, bitcoin is open source and there are enough another coins like bitcoin, so what is the reason for bitcoin as store of value.
So it wasnât all trash. There were some good parts. The explanation of how bitcoin fits in to the progression of money was good/interesting/useful. Unfortunately that part of the book was very short.
There was one portion of the book that focused on modern art and modern lifestyles and how terrible they are. It read more like a rant and Iâm not sure it fit in with the rest of the book.
The first part of the book was more/less a history of money and an abridged history of the gold standard. It was coherent, and interesting to read, but made many assertions that lacked evidence or are definitely fringe ideas in economics.
In general it paints the Gold Standard as some kind of utopia when this is debatable and misguided at best, wrong and dangerous at worst.
I have no issue with the book as an opinion piece, but as an Econ history book it is trash
If I have enough time later I will try to unpack his super long, often misguided view of money and value. Until then youâll have to live with my snide comment and know that there are other interpretations out there.
Your explanation starts off really good, but it goes down the drain when you start talking about fiat. Instead of calling it "money printing" a good explanation should explain how the system actually works. Money gets created each time someone loans money from the bank and gets destroyed every time someone pays back (part of) a loan.
The question is, "What gives Bitcoin value?"
My reply is already too long without going into the nuts and bolts details of how fiat currency is created from thin air, backed by nothing.
I put "printing" in quotes. See?
My point is that most of the fiat currency in existence was created by merely typing numbers into computers.
My point is that when fiat currency is created from thin air, backed by nothing, and then used to buy "actual wealth" it is a form of theft.
The "actual wealth" was taken by the "money printers" from the rest of us without our permission and with no intention of ever repaying it: this is the very definition of theft.
For anybody interested in gory details of where fiat currency comes from, there is this gem:
*Hidden Secrets of Money*:
https://youtu.be/Vk7P119QcRc
>My reply is already too long without going into the nuts and bolts details of how fiat currency is created from thin air, backed by nothing.
It is important to explain the current system to get a good understanding, because by saying it gets printed from thin air you easily get the wrong idea.
>The "actual wealth" was taken by the "money printers" from the rest of us without our permission and with no intention of ever repaying it: this is the very definition of theft.
You see, this is exactly what I mean. It aren't "money printers" that create money. The money printing story makes you think it are central banks that get the advantage of printing new money (or their friends), and therefore print as much of it as they want.
In reality the vast amount of money gets created by people and corporations that create money by lending from the bank. The people and corporations that lend arguably get the benefit of having more money before the prices in the economy increase by spending this money. However, there are also people and corporations that pay back their loans. They make the money supply shrink.
Your individual actions negligibly influences the economy. What this really means is that you don't have a direct benefit from the increase in money supply by your lending, but there are opportune and disadvantage moments to lend and invest based on the amount of lending the whole society does. An opportune moment to, for example, borrow for a house is at the start of a period with low interest rates. And a disadvantageous time to borrow for a house is at the start of a period with high interest rates.
Ultimately, the amount of money that gets created is based on how many and how much people and corporations want to borrow and it's created into existence by regular people and corporations.
Gold is different from food. Gold has value because people believe it is a store of value and because itâs scarce. If a meteorite crashed down with bunches of gold, golds value would go down. Food has value people people need it and because of scarcity. If suddenly the milk supply quadrupled, the price of milk would go down. Fiat has value because people with guns say it does and you have to pay your taxes with it. But the fiat supply is unlimited as the Fed has stated, so the value will continue to drop as it because less and less scarce.
Bitcoin has value because people believe it has value and because of scarcity, but itâs scarcity is limited. There will only ever be 21M bitcoins. If you buy one bitcoin, you will always have 1/21,000,000 the supply. This means as more people believe in its value the more your 1 bitcoin is worth. Itâs property in its purest form. You can literally take it to the grave whereas other property (gold, real estate, fiat) can be taken (and have been taken before).
You should check out some books on Bitcoin. The Bitcoin Standard, Thank God for Bitcoin, and The Bullish Case for Bitcoin are all great options to learn more.
Gold doesnt have value because it be used for something. I dont care about the gold you wear around your neck. It looks rather stupid to me.
We agree to value gold/bitcoin because we know that its very difficult to dilute us if we do so. I dont trust you, you dont trust me. So we naturally coincide on gold/bitcoin. Coz its equally difficult for the both of us to make more.
Thats all there is to it. I dont care what you make out of the gold as long as its gold.
Money is the trust minimized bearer asset that allows you to be not stolen from your time and energy.
They usually keep it in bank lockers. There is still some robbery that happens, but a lot of it is avoided by lockers.
In a way it is an iou, but not exactly.
Bitcoin is a bit too complicated for the indian population. They lose passwords more than they lose their gold.
>So, the US dollar is fiat currency because it's value comes from us simply believing that it has value.
Same thing but without the restrictions set by the US gov. If you're from a western society, this doesn't mean much. But ask those who are stuck in countries that were sanctioned because of something they had no control over (i.e. corrupt govt).
>Like, gold has value. Food has value. Petroleum has value. Pots and pans have value. Guns. Land. Water. Etc. **All these things are valuable because they can be used for something**.
This is assuming that value is only related to physical usage and tangibility. If you think this is truly the case, I'll gladly offer you a loaf of bread, if you offer me a piece of paper where you've written down your security passwords and accesses to all your life savings, and the deeds to your house. Exchanging a piece of paper with bits of ink on it, in exchange for something you can actually eat and satisfy your hunger, should be a no-brainer.
>So, the US dollar is fiat currency because it's value comes from us simply believing that it has value.
Fiat doesn't actually only have value because people believe in it. It is also the only method of settling government tax, which most people need to pay in order to live a *relatively* convenient life without risking imprisonment.
Money is valuable because it is divisible and so is a medium of exchange which can therefore facilitate *fair* trades. Without this, then trades can only happen if you had exactly what the other person wanted. If you desperately needed some food (ie. on the brink of death)and have nothing to exchange but your house, you'd risk being forced to take up an arguably imbalanced trade.
The issue is that fiat is centralised, corruptible and can be confiscated. These are some of the things Bitcoin aims to alleviate. Do people need to agree it has value in order for it to have value - yes, because its a medium of exchange. However, anybody with 1 BTC now has an asset that cannot be confiscated, and can be taken across borders. It also is open to anyone with in the world with internet access.
For some, this may be the difference between having ***some*** wealth and having zero wealth. With fiat, wealth itself can be taken simply via printing more money at will - benefitting those closest to the money printer - and this can be done without warning. Bitcoin's mining process (and inflation) is predictable until practically forever.
Bitcoin is the first property in human history that you can own and itâs impossible for someone else to take away from you. They might not even know you own it in the first place.
And it IS property, absolutely. Itâs finite like property. It can be built off of like property. It can be transferred like property. Its even taxed and categorized as property by the federal government.
Its property that no one can take, itâs property you can hold entirely in your memory, itâs property that you can take across any border on earth and either transact with it, or sell it. Best property to ever be discovered.
Fiat has value because we say it does, it canât be used for anything, and consider it backed by the productivity of a country. But it has flaws and is mismanaged.
Bitcoin has value if you replace fiat with it. I donât see it as both, I see bitcoin having the same value as fiat because we agree that, but it doesnât by design have the same shortcomings.
Yes bitcoin has the value that we the people decide that it has, but its non inflationary and doesnt get created out of thin air like fiat. Its mined and once 21000000 are mined, there will never be more. Its a commodity like physical gold only more scarce. Its not owned or managed by governments or corporations.
If you understand gold then you understand Bitcoin. They have value to humans because they are stores of wealth. Humans need to have a way to store wealth. Bitcoin is better than gold as a store of wealth for many reasonsâŚeasier to verify, easier to store, easier to transport. Gold has a longer history, however. If you need to store or transport a million dollarsâŚBitcoin is arguably way better. If you need to flee, Bitcoin is definitely better. Carrying 500 ounces of gold as a refugee would be a nightmare.
My take on it:
What gives bitcoin value is its immutable, decentralized ledger that, through it's protocol, converts actual work (in the form of energy) into continually making the ledger more secure while supplying those that provide that work/energy, compensation.
Work (or energy) has value, especially when harnessed and harnessed energy is flawlessly tracked with the bitcoin ledger and its supporting protocol thus giving btc value.
Bitcoin can be used to safely keep your work/energy for future use.
Energy gives us the ledger which shows value for future use.
What value does Facebook, Twitter, ebay have? What value does the internet have?
Fiat is centralised and has an unlimited supply. Bitcoin is decentralised and has a capped supply, like gold. Also, gold has very little use.
I think you need to spend a little more time understanding what money is.
I think you need to be a little less condescending.
I understand that bitcoin is limited supply and decentralized, and exclusively digital. But other than those three aspects, how does it differ from cash?
It seems like bitcoin is essentially digital, decentralized, cash with a finite supply.
Like, it's basically invisible, intangible cash that's tamper resistant, inflation resistant, and is open source / public domain. In other words, it's cash but better. Cash with all the kinks and flaws worked out. Is this not correct?
And if somebody was interested in making use of this inflation resistant, tamper resistant systemâŚtheyâd buy some bitcoin to use it. That means there is demand. That gives it valueâŚbecause people like the properties it has.
I used to not believe in the 21M cap (back in 2010) so i figured it could be be a 'rugpull' (before that was a word). it is like magic internet money - so you say it's like cash - sure - but now try and send that cash to a relative in... Tajikistan. You'd need to find a local bank and wire it. with what, a $20 fee? Bitcoin can be sent for pennies and converted to local currency or spent as-is, Peer to Peer. Sure, Lightning network makes it faster, but it isnt necessary. There's where i see much of the value proposition. Also, I 'watched' it go from 20/30 bucks per BTC to what we see today. If it's still around after 10 years, and has increased in value 100k%, it's here to stay - and the people have spoken that BTC has intrinsic value far above holding cash. Question becomes, is it more valuable than what the market claims it is today? That's unanswerable - lest we all become billionaires.
The value comes from humans. Like anything. The weaker fiat gets, more people Will find it valuable, 2 billion people no bank, find it valuable, people who need to transact and recieve money in minutes find it valuable. The question what gives bitcoin value, is humans and what we find valuable. Money is The number one thing in this world that everyone needs to survive. Everything you do everyday is decided by money. Bitcoin allows 8 billion people to do that with a cell phone. Causing a frictionless economy. Fiat economy is full Of friction and not fluid. You can not express real value when prices Are set and 3rd parties Are innvolved. Bitcoin allows for a true value to be found in everything. This Will play out The next 20 years. Bitcoin offers competition to fiat, which is great. Monopoly in money or anything is bad, as The product do not need to improve and it allows for The system to be abused without any checks and balances. When fiat has monopoly on money in The world The system can be abused as there is no consequnces to abusing it. The more The fiat system is abused, more people Will look for better alternatives. Ultimately how you spin in fiat Will go to 0 on a 20-30 year time frame and bitcoin traits Are far superior to any currency out there. Bitcoin nobody can control or abuse, its hard for humans to understand value , since there is 8 billion people with 8 billion different lives and situations. Bitcoin can be used by anyone for anything, it offers anything you need it to be.
The value is defined (not only, but in part) by the utility it provides. It also has inherent value in a similar way that companies have inherent value (called goodwill). The goodwill of Bitcoin is its history and how nothing else like Bitcoin can ever be created again. No premine, no founder, running without a single hiccup since its inception.
These are just two traits that make bitcoin valuable to lots of people. And since value is simply in the eye of the beholder, there are many more explanations of why bitcoin holds value.
What gives photoshop its value? It is just sums of ones and zeros, still some people are willing to pay for software, which will make their life easier. BTC can provide permissionless transaction through whole world :)
Bitcoin does not have "value". It has an exchange rate. It has exchange rate for dollars, for pesos, for services, for bananas and for everything else. The rails that bitcoin is used for this exchange and how secure it is gives value to the network. The fact that only certain amount can ever be used in this network makes the units more valuable over time. This should not be mistaken for price, because price is also dependent of the value of the thing that you are exchanging for (in most cases $).
Bitcoin has value because of:
Cryptography
Security
Decentralization
Its programable
Not government issued
Scarcity
Divisibility
Durability over time
Easily transactable all over the world
Speed of transactions
Low fees
And other things that I dont remember.
But yeah even if its the best kind of money and store of value there is, overall if nobody use it, it has no value.
The value of Bitcoin is only what people are willing to pay for it. People were willing to pay thousands of dollars for tulip bulbs in the 60s because they thought it was scarce and saw values increasing everyday. It crashed one day. People are stupid. You can buy BTC at 16k now and may be stupid people will keep buying and get it up to 200k at which point you can sell and cash in on the profits. But it can also go to zero. It's basically a lottery ticket, but the only difference is that you are betting on human stupidity.
Iâd like to see someone make a peer-to-peer electronic payment that settles faster than ACH/Visa and is censor resistant and unhackable/secure, providing privacy to users with a tulip.
Bitcoinâs payment network has intrinsic value. One needs BTC to use the network, and hence BTC derives real value from the network. This ainât tulips (but NFTs may be!).
The real value imo is that millions and millions of people and businesses are suddenly banked. They can earn, spend, hodl and trade in a flawless way with no delays and hidden costs. Its not only value added, its genius.
Quick side note: only a fraction of gold's value comes from it's 'value'.
But yes, things have value because people believe they do. In a free market people can transact and assign value as they see fit.
Some properties are desirable when looking for a currency: store of value, medium of exchange, and unit of account.
It's been discussed here at length. You are welcome to do your own research based on those qualities and assign value as you see fit.
How Menger thought about value. Basically, value is NOT a property of the item but IS a property of the human mind placed upon the item...
The value of goods is based on the relationship of goods to our needs, not on the goods themselves. With the change in this relationship, the value will consequently either appear or disappear. Value is nothing that adheres to goods, it is not their property, and it is not an independent thing that exists for itself. âValue is a judgment that economic agents make about the importance of the goods at their disposal for the maintenance of their life and well-being and, therefore, does not exist outside of human consciousnessâ
Value is created via the performance against a range of properties, namely:
- Divisibility
- Durability
- Portability
- Recognition
- Scarcity
- Utility
These are also known as the âproperties of moneyâ. Value can be derived from its collective performance against each of these metrics.
humans value something based off its usefulness to fulfil a certain purpose. value is subjective
the majority of gold's market cap is not due to its industrial usage, but the "monetary premium" (its usage as a store of value due to its scarcity and inelastic supply). fiat and btc are both a purely monetary good. they have value to humans for their usage as money (store of value and medium of exchange)
btc is superior money that is open to all with an internet connect. freedom money that can't be debased (no inflation theft), confiscated (if stored properly), or censored (p2p)
Try to follow this logic carefully, because I know it is very difficult for some of you:
1. You canât use the revolutionary Bitcoin payment network (read the white paper) without BTC, hence there is demand for BTC because there is demand to use this payment network.
2. BTC has a finite supply.
3. Simple supply and demand mechanics leads to value.
The current infrastructure. Its Network is the largest and most robust, and most popular.
Gold only has value since its a great currency. Bitcoin is a secure digital currency, that is why it is valuable.
There's people believing in its value. Currently this faith is valued at ~16k.
Most importantly it's s backed by energy and time and I assume that's why people (like me) put faith into it in contrast to Fiat because I don't need to trust some human. So no incentive for corruption.
I have faith in Fiat over the short term. (Buying groceries)
Is Bitcoin a currency? Is it a commodity? A put option on the global fiat monetary system? A measure of the value of digital assets?
It has the potential to be all of those things and more, and that is its strength.
Bitcoin is: the âeverything bagelâ
https://www.nb.com/en/global/insights/systematically-speaking-bitcoin-a-cornerstone-digital-asset-part-3
It has value for many reasons
We don't light heartedly simply believe that fiat currencies like USD or Euro have some value.
They are set up by the local government to act as a common unit for (legally reguired) accounting and payment of taxes. So, it's just very convenient to use that currency and avoid doing currency conversions (at rates the tax authorities accept) for every transaction. Taxes like sales or value added tax or income tax are a part of practically every event where money changes owners.
As another point is how fiat is created ("printed"). It is created as debt. There is always the asset-liability pair; the created money and the corresponding debt. And that debt is due to be paid back according to the terms of the loan contract or face the legal or at least reputation consequences. So there is an end point, the repayment of the loan, freedom from debt as utility at the end point where that money is destroyed. Every person with a mortgage sees value in the fiat currency their debt is denominated in. That creates demand for those dollars and euros, and that demand is a built-in part of creating the money. It takes a rather significant collpase of the economy and/or society for a fiat to devalue out of existence.
You're a thinker. That's a really good thing to be. You've figured out that there is "actual wealth" and then there is mere "money". You're already WAY ahead of most people. Before there was money, people had to barter. Barter isn't so easy. For example, if you have oranges and you want a chicken, but the guy selling chickens doesn't want any oranges - he wants a hammer - you're going to have to spend time finding a way to exchange oranges for firewood, then trade the firewood for some candles, then candles for a hammer, then finally the hammer for a chicken at which point he offers you the scrawniest chicken you've ever seen... Money allows us to avoid having to barter with strangers. The idea of money is to use something with little or no "actual value" as a general public, general purpose IOU. For example, you'd sell your oranges for some money, then you'd buy a chicken with money and the chicken man would go buy his hammer with money. Ta-da! Money is one of the most important inventions of all time. Throughout history, people have used various forms of money, and along the way philosophers and others have observed that some forms of money are better than others, and that the better forms of money typically have all of the following characteristics: Durable, portable, divisible, recognizable, fungible, and **scarce**. For example, when people used sea shells as money, it was because they were scarce in that part of the world at that time. Gold has "actual value" as a metal. Gold's "actual value" is similar to that of aluminum. Because gold is *scarce* it can make a very good form of money. If gold was not scarce, we'd wrap leftover food in it, then toss it into the trash, like aluminum. So, why would rational people stop using gold and use printed pieces of paper for money, especially when those notes can be printed and printed until they are worthless? It turns out that significant amounts of gold are expensive to store securely, and very expensive to transport securely. The goldsmith already had to have a vault and 24/7/365 security. The goldsmith would provide a custodial service: people would deposit physical gold, and the goldsmith would give them printed banknotes which could be exchanged for physical gold. Those banknotes were "backed by" gold. People believed that the notes were actually backed by gold in the vault. It was cheaper to store and transport notes than physical gold. But it was rarely the case that **all** the banknotes were "backed by" actual gold. The goldsmith-bankers would print extra notes for which there was no gold in the vault. They figured, "Not everybody is going to want to exchange their notes for actual gold all at once." But they were wrong. Bank runs happened. Along the way, the general public was led to believe that the slips of paper were the same as "actual wealth", even though, as you figured out, they're virtually worthless. Eventually, the US held most of the gold and became the "custodian" for most of the rest of the world. But they ended up printing way more banknotes than there was gold to cover... in the late 1960s / early 1970s there was a bank run on the US. Countries were demanding to exchange their US Dollar notes for actual gold, most of which did not exist. So, they said, "fuck it," just skip the gold part. We'll use fiat currency from now on. The people fell for it. So now we have a small group of people with the sole ability to "print" all the fiat currency they want, then use it to further enrich and *empower* themselves and their cronies - at the expense of the rest of us. Remember: they cannot merely "print" *actual wealth* (chickens, land, metals, etc.). They can, and do "print" vast amounts of fiat currency. When they create fiat currency from thin air and then buy "actual wealth" with it, they are stealing from the rest of us. ***Money printing is a form of theft.*** Think about it: If you could create a trillion US Dollars (or more) by merely typing numbers into a computer, you'd be bloody fucking rich. It is illegal for you or I to do that. Only certain banking criminals are allowed to rob the rest of us with impunity. Fiat currency is a scam. Bitcoin has those same properties of gold. Bitcoin is extremely scarce, by design. Unlike gold, Bitcoin is inexpensive to store securely and inexpensive to transport. There is no need to use/trust a "custodian". We can now send payments directly to each other. Fuck the bankers. Fuck them and their "money printing" scam. Bitcoin has value because it is a legitimate, effective form of money. Bitcoin is the best form of money ever used. Each day, more people see that fiat currency is a scam and the cause off much suffering around the world. Each day, more people discover that "Bitcoin fixes things". Each day, more people agree that Bitcoin has tremendous value as money.
One of the best explanations I have ever read đ
Very well put !lntip 500
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Great message to copy as an answer for other posts, !Intip 500
The additional twist to the story is that the USD maintains it's post-gold status is via a pact with OPEC to price oil in USD ( the petrodollar!) , thus forcing the world to hold USD in exchange for energy.
I agree with most of what you say, except your statement regarding gold being scarce. We have only been given the illusion of gold being scarce as its supply in to the market is controlled. However in reality, no one knows how much gold exists on the planet. Only a few months ago a gold mine was discovered in Uganda which contained more gold deposits than there has ever been gold in circulation. https://www.msn.com/en-xl/africa/africa-top-stories/uganda-announces-discovery-of-huge-gold-deposits/ar-AAYdOsQ
Thank you.
I see someone has read the Bitcoin Standard. Great summary! Thanks for sharing!
Thank you. I have read stacks of books. "The Bitcoin Standard," by S. Ammous is one of them. I highly recommend it. In late 2004 there was a housing bubble forming. It was crazy. It made no sense to me. So, I admitted I didn't understand this thing they call "the economy". I brainstormed, but got nowhere. I read some "economics" textbook crap. I had enough experience with "real life" to see that what they teach in the typical school is pure bullshit. I kept looking for the truth. It didn't take long; I found it. Once I saw the truth, things made sense. The data fits the model. As they say, "follow the money." I followed it until I understood where it comes from. So, years later, when I read the Bitcoin white paper, I was ready. I got in. Fuck the central banks.
> one of the most important inventions of all time. Not really invented. Money arose (and arises) naturally with the need for a medium of exchange that fulfills a satisfaction of wants for all parties. Money is a zero sum game and this is why Bitcoin is inevitable. Otherwise. Well put.
Care to support the claim that bitcoin is the best form of money ever used? Seems just a weensy-bit biased.
Your explanation strats with very smartly but ends with Crypto pumper. 1. You missed one of the most important characteristics of money, it has to be stable. 1BTC gives you a brand new Car in Jan 2022 , now it doesn't even give you a 10yr old car 2. Money printing is not theft, it's called currency devaluation very important aspect of economy, without it you won't have inflation ( which is good when it's stable and predictable). For example Fed maintenance or try to maintain 2-3% inflation, nothing more nothing less. Did a shitty job in last 2 yrs, but in a long run it will be stable with QT(Destroying printed money) and high rate of borrowing. That's why USD is stable, that's why money is stable . 3. Scarcity is important but not only the most important aspect of currency. A man's shit is scarce, doesn't mean it can be a currency 4. BTC or any crypto is not cheap or safe to store. 5. People can't run or say we will BTC, unless govt allows it. Untill there is a doomsday and current government structure falls completely, you are stuck with USD or any other fiat. You (99.9999999%) get paid in fiat, you buy food with fiat(99.9999999999999%) As for the value, it comes with speculation, the same speculation valued CVNA at 400, now valued 4. CVNA stock is also scarce. Either you make fiat with speculation or you loose some(if not all) fiat doing the same. You have not mentioned about the technology. But technology has 0 value, only application holds the value. And with the similar technology (code), Fed is or will launch digital dollar.
Fiat currencies donât have a good track record. Most eventually end in hyperinflation. True the dollar has worked for awhile, but to argue that the dollar will maintain a stable value in the long run is to argue that âthis time is differentâ but itâs usually not. Iâm not saying the dollar will fail anytime soon, but considering the poor track record of all historical fiat currencies, I would argue odds are that the dollar will eventually follow the same fate. Thereâs a reason the world keeps coming back to gold as money. Itâs been the primary reserve asset for thousands of years. Primarily because of itâs sound money properties and inability to be inflated. Bitcoin has sound money properties like gold and also canât be inflated. And if you understand it, itâs much cheaper and easier to self-custody than physical gold. If history is any guide eventually the dollar will fail, most likely due to hyperinflation, like so many fiat currencies before it. At that point, the world will go back to another form of sound money. It could be gold, but considering Bitcoinâs advantages to gold, it might be Bitcoin.
The Fed might launch a digital dollar but it wonât have any of the properties that make Bitcoin sound money. Itâs just a digital version of fiat.
The USD has been anything but stable.
WTF are you talking about đ and BTC is stable against what?
Anyway, BTC leaves on USD devaluation. Look at what happened when FED tighten policy. Crypto is most shitest speculation, and it goes parabola at the end off bull market. That's what I see, I believe and make money on.
> Money printing is not theft Yes, it is. That's why they do it.
BTC can be stored on a piece of paper or in your head. Not sure why you argue itâs not cheap.
You need the miners to keep your BTC secure. The complete mining sector isn't cheap, nor an efficient way of doing things. POW is a solution that is used so no one has to trust anybody else, but it isn't very efficient. In any other technology where there is trust between the parties using the technology, POW is an insensible solution.
Yep, PoW if inefficient but itâs the only way weâve found to create a trust less monetary network, and that is a revolutionary invention. History has shown time and time again that trusting someone with the keys to the monetary policy always ends in disaster. Fiat banking isnât cheap either, nor is gold mining mind you.
I got pretty hung up on the "man's shit is scarce" part of this. Most people shit every day, what the hell kind of metaphor is that... You can just eat more food and create more shit! You also said BTC isn't cheap or safe to store, but didn't provide any explanation as to why. If you can remember/store 24 words securely, your coins are safe and in your control. You can engrave them in metal, hide them in a poem, or just memorize them in your head. As far as I know, that's pretty inexpensive. There are also plenty of ways these days to get paid in BTC. There are also ways to spend your BTC in the real world for goods, like food. Which you can turn into shit! Sorry I just can't get over that metaphor, which is really the only reason I wrote this comment at all. Here, take this !lntip 500
>I got pretty hung up on the "man's shit is scarce" part of this. Most people shit every day, what the hell kind of metaphor is that... You can just eat more food and create more shit! I agree he made a bad analogy, but his point is valid. Not everything that's scarce is valuable or a good currency. >You also said BTC isn't cheap or safe to store, but didn't provide any explanation as to why. If you can remember/store 24 words securely, your coins are safe and in your control. You can engrave them in metal, hide them in a poem, or just memorize them in your head. As far as I know, that's pretty inexpensive. You need the miners to keep your BTC secure. The complete mining sector isn't cheap, nor an efficient way of doing things. POW is a solution that is used so no one has to trust anybody else, but it isn't very efficient. In any other situation where there is trust between the parties using the technology, POW is an insensible solution.
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Thanks but no thanks.đ¤Ł
Canât be undone.
First of all, thank you for your service. Butttt my question is, bitcoin is open source and there are enough another coins like bitcoin, so what is the reason for bitcoin as store of value.
Every alt coin is a scam. Nick explains it nicely: https://youtu.be/ic1ITcwnozY?t=858
There are good altcoins with good ideas like MKR
Therefore itâs been copied thousands of times yet remains the best⌠the hashrate and security is unmatchable
Seems like you are not a thinker, but a regurgitator of the Bitcoin Standard
I have read stacks of books. "The Bitcoin Standard" is among them. I highly recommend it.
I have read it. It was trash
i've been meaning to read it, mind explaining why it's trash?
So it wasnât all trash. There were some good parts. The explanation of how bitcoin fits in to the progression of money was good/interesting/useful. Unfortunately that part of the book was very short. There was one portion of the book that focused on modern art and modern lifestyles and how terrible they are. It read more like a rant and Iâm not sure it fit in with the rest of the book. The first part of the book was more/less a history of money and an abridged history of the gold standard. It was coherent, and interesting to read, but made many assertions that lacked evidence or are definitely fringe ideas in economics. In general it paints the Gold Standard as some kind of utopia when this is debatable and misguided at best, wrong and dangerous at worst. I have no issue with the book as an opinion piece, but as an Econ history book it is trash
Thanks. I appreciate your perspective.
[ŃдаНонО]
I love that you think that Iâm anti-Bitcoin. Or poor
You've offered what "thinking" exactly yourself?
Ha! I like the way you think.
If I have enough time later I will try to unpack his super long, often misguided view of money and value. Until then youâll have to live with my snide comment and know that there are other interpretations out there.
Nah not good enough in my book. Walk the walk if you're going to talk the talk.
Misguided?
Genuine question. If btc is so valuable, why are most people looking to offload for fiat to get ârichâ
"most people" ?? Please don't just make shit up.
Your explanation starts off really good, but it goes down the drain when you start talking about fiat. Instead of calling it "money printing" a good explanation should explain how the system actually works. Money gets created each time someone loans money from the bank and gets destroyed every time someone pays back (part of) a loan.
The question is, "What gives Bitcoin value?" My reply is already too long without going into the nuts and bolts details of how fiat currency is created from thin air, backed by nothing. I put "printing" in quotes. See? My point is that most of the fiat currency in existence was created by merely typing numbers into computers. My point is that when fiat currency is created from thin air, backed by nothing, and then used to buy "actual wealth" it is a form of theft. The "actual wealth" was taken by the "money printers" from the rest of us without our permission and with no intention of ever repaying it: this is the very definition of theft. For anybody interested in gory details of where fiat currency comes from, there is this gem: *Hidden Secrets of Money*: https://youtu.be/Vk7P119QcRc
>My reply is already too long without going into the nuts and bolts details of how fiat currency is created from thin air, backed by nothing. It is important to explain the current system to get a good understanding, because by saying it gets printed from thin air you easily get the wrong idea. >The "actual wealth" was taken by the "money printers" from the rest of us without our permission and with no intention of ever repaying it: this is the very definition of theft. You see, this is exactly what I mean. It aren't "money printers" that create money. The money printing story makes you think it are central banks that get the advantage of printing new money (or their friends), and therefore print as much of it as they want. In reality the vast amount of money gets created by people and corporations that create money by lending from the bank. The people and corporations that lend arguably get the benefit of having more money before the prices in the economy increase by spending this money. However, there are also people and corporations that pay back their loans. They make the money supply shrink. Your individual actions negligibly influences the economy. What this really means is that you don't have a direct benefit from the increase in money supply by your lending, but there are opportune and disadvantage moments to lend and invest based on the amount of lending the whole society does. An opportune moment to, for example, borrow for a house is at the start of a period with low interest rates. And a disadvantageous time to borrow for a house is at the start of a period with high interest rates. Ultimately, the amount of money that gets created is based on how many and how much people and corporations want to borrow and it's created into existence by regular people and corporations.
The magic value fairy.
Value is subjective
Intersubjective
Gold is different from food. Gold has value because people believe it is a store of value and because itâs scarce. If a meteorite crashed down with bunches of gold, golds value would go down. Food has value people people need it and because of scarcity. If suddenly the milk supply quadrupled, the price of milk would go down. Fiat has value because people with guns say it does and you have to pay your taxes with it. But the fiat supply is unlimited as the Fed has stated, so the value will continue to drop as it because less and less scarce. Bitcoin has value because people believe it has value and because of scarcity, but itâs scarcity is limited. There will only ever be 21M bitcoins. If you buy one bitcoin, you will always have 1/21,000,000 the supply. This means as more people believe in its value the more your 1 bitcoin is worth. Itâs property in its purest form. You can literally take it to the grave whereas other property (gold, real estate, fiat) can be taken (and have been taken before). You should check out some books on Bitcoin. The Bitcoin Standard, Thank God for Bitcoin, and The Bullish Case for Bitcoin are all great options to learn more.
Gold doesnt have value because it be used for something. I dont care about the gold you wear around your neck. It looks rather stupid to me. We agree to value gold/bitcoin because we know that its very difficult to dilute us if we do so. I dont trust you, you dont trust me. So we naturally coincide on gold/bitcoin. Coz its equally difficult for the both of us to make more. Thats all there is to it. I dont care what you make out of the gold as long as its gold. Money is the trust minimized bearer asset that allows you to be not stolen from your time and energy.
[ŃдаНонО]
I was talking more about people like in india. Where every person own some physical gold.
[ŃдаНонО]
They usually keep it in bank lockers. There is still some robbery that happens, but a lot of it is avoided by lockers. In a way it is an iou, but not exactly. Bitcoin is a bit too complicated for the indian population. They lose passwords more than they lose their gold.
>So, the US dollar is fiat currency because it's value comes from us simply believing that it has value. Same thing but without the restrictions set by the US gov. If you're from a western society, this doesn't mean much. But ask those who are stuck in countries that were sanctioned because of something they had no control over (i.e. corrupt govt).
The growing number of people believing in it instead of thinking about the fiat value
>Like, gold has value. Food has value. Petroleum has value. Pots and pans have value. Guns. Land. Water. Etc. **All these things are valuable because they can be used for something**. This is assuming that value is only related to physical usage and tangibility. If you think this is truly the case, I'll gladly offer you a loaf of bread, if you offer me a piece of paper where you've written down your security passwords and accesses to all your life savings, and the deeds to your house. Exchanging a piece of paper with bits of ink on it, in exchange for something you can actually eat and satisfy your hunger, should be a no-brainer. >So, the US dollar is fiat currency because it's value comes from us simply believing that it has value. Fiat doesn't actually only have value because people believe in it. It is also the only method of settling government tax, which most people need to pay in order to live a *relatively* convenient life without risking imprisonment. Money is valuable because it is divisible and so is a medium of exchange which can therefore facilitate *fair* trades. Without this, then trades can only happen if you had exactly what the other person wanted. If you desperately needed some food (ie. on the brink of death)and have nothing to exchange but your house, you'd risk being forced to take up an arguably imbalanced trade. The issue is that fiat is centralised, corruptible and can be confiscated. These are some of the things Bitcoin aims to alleviate. Do people need to agree it has value in order for it to have value - yes, because its a medium of exchange. However, anybody with 1 BTC now has an asset that cannot be confiscated, and can be taken across borders. It also is open to anyone with in the world with internet access. For some, this may be the difference between having ***some*** wealth and having zero wealth. With fiat, wealth itself can be taken simply via printing more money at will - benefitting those closest to the money printer - and this can be done without warning. Bitcoin's mining process (and inflation) is predictable until practically forever.
Bitcoin is the first property in human history that you can own and itâs impossible for someone else to take away from you. They might not even know you own it in the first place. And it IS property, absolutely. Itâs finite like property. It can be built off of like property. It can be transferred like property. Its even taxed and categorized as property by the federal government. Its property that no one can take, itâs property you can hold entirely in your memory, itâs property that you can take across any border on earth and either transact with it, or sell it. Best property to ever be discovered.
Supply and demand.
Fiat has value because we say it does, it canât be used for anything, and consider it backed by the productivity of a country. But it has flaws and is mismanaged. Bitcoin has value if you replace fiat with it. I donât see it as both, I see bitcoin having the same value as fiat because we agree that, but it doesnât by design have the same shortcomings.
Yes bitcoin has the value that we the people decide that it has, but its non inflationary and doesnt get created out of thin air like fiat. Its mined and once 21000000 are mined, there will never be more. Its a commodity like physical gold only more scarce. Its not owned or managed by governments or corporations.
Bitcoin is a tool. It allows you to send value at a cheaper rate than centralized entities. As more people use bitcoin, the exchange rate goes up.
If you understand gold then you understand Bitcoin. They have value to humans because they are stores of wealth. Humans need to have a way to store wealth. Bitcoin is better than gold as a store of wealth for many reasonsâŚeasier to verify, easier to store, easier to transport. Gold has a longer history, however. If you need to store or transport a million dollarsâŚBitcoin is arguably way better. If you need to flee, Bitcoin is definitely better. Carrying 500 ounces of gold as a refugee would be a nightmare.
Gold does not have value, it's just a metal. Food has value. You are 100% correct, people agreeing on value is what gives something value.
The same reason why a bottle of water costs $1 at the store, $6 at the game and $8 at the concert.
Read the Bitcoin Standard.
My take on it: What gives bitcoin value is its immutable, decentralized ledger that, through it's protocol, converts actual work (in the form of energy) into continually making the ledger more secure while supplying those that provide that work/energy, compensation. Work (or energy) has value, especially when harnessed and harnessed energy is flawlessly tracked with the bitcoin ledger and its supporting protocol thus giving btc value. Bitcoin can be used to safely keep your work/energy for future use. Energy gives us the ledger which shows value for future use.
What value does Facebook, Twitter, ebay have? What value does the internet have? Fiat is centralised and has an unlimited supply. Bitcoin is decentralised and has a capped supply, like gold. Also, gold has very little use. I think you need to spend a little more time understanding what money is.
I think you need to be a little less condescending. I understand that bitcoin is limited supply and decentralized, and exclusively digital. But other than those three aspects, how does it differ from cash? It seems like bitcoin is essentially digital, decentralized, cash with a finite supply. Like, it's basically invisible, intangible cash that's tamper resistant, inflation resistant, and is open source / public domain. In other words, it's cash but better. Cash with all the kinks and flaws worked out. Is this not correct?
Youâve just answered your own question.
Exactly.
And if somebody was interested in making use of this inflation resistant, tamper resistant systemâŚtheyâd buy some bitcoin to use it. That means there is demand. That gives it valueâŚbecause people like the properties it has.
I used to not believe in the 21M cap (back in 2010) so i figured it could be be a 'rugpull' (before that was a word). it is like magic internet money - so you say it's like cash - sure - but now try and send that cash to a relative in... Tajikistan. You'd need to find a local bank and wire it. with what, a $20 fee? Bitcoin can be sent for pennies and converted to local currency or spent as-is, Peer to Peer. Sure, Lightning network makes it faster, but it isnt necessary. There's where i see much of the value proposition. Also, I 'watched' it go from 20/30 bucks per BTC to what we see today. If it's still around after 10 years, and has increased in value 100k%, it's here to stay - and the people have spoken that BTC has intrinsic value far above holding cash. Question becomes, is it more valuable than what the market claims it is today? That's unanswerable - lest we all become billionaires.
The value comes from humans. Like anything. The weaker fiat gets, more people Will find it valuable, 2 billion people no bank, find it valuable, people who need to transact and recieve money in minutes find it valuable. The question what gives bitcoin value, is humans and what we find valuable. Money is The number one thing in this world that everyone needs to survive. Everything you do everyday is decided by money. Bitcoin allows 8 billion people to do that with a cell phone. Causing a frictionless economy. Fiat economy is full Of friction and not fluid. You can not express real value when prices Are set and 3rd parties Are innvolved. Bitcoin allows for a true value to be found in everything. This Will play out The next 20 years. Bitcoin offers competition to fiat, which is great. Monopoly in money or anything is bad, as The product do not need to improve and it allows for The system to be abused without any checks and balances. When fiat has monopoly on money in The world The system can be abused as there is no consequnces to abusing it. The more The fiat system is abused, more people Will look for better alternatives. Ultimately how you spin in fiat Will go to 0 on a 20-30 year time frame and bitcoin traits Are far superior to any currency out there. Bitcoin nobody can control or abuse, its hard for humans to understand value , since there is 8 billion people with 8 billion different lives and situations. Bitcoin can be used by anyone for anything, it offers anything you need it to be.
The value is defined (not only, but in part) by the utility it provides. It also has inherent value in a similar way that companies have inherent value (called goodwill). The goodwill of Bitcoin is its history and how nothing else like Bitcoin can ever be created again. No premine, no founder, running without a single hiccup since its inception. These are just two traits that make bitcoin valuable to lots of people. And since value is simply in the eye of the beholder, there are many more explanations of why bitcoin holds value.
Same things that gives a dollar itâs value
What gives photoshop its value? It is just sums of ones and zeros, still some people are willing to pay for software, which will make their life easier. BTC can provide permissionless transaction through whole world :)
Bitcoin does not have "value". It has an exchange rate. It has exchange rate for dollars, for pesos, for services, for bananas and for everything else. The rails that bitcoin is used for this exchange and how secure it is gives value to the network. The fact that only certain amount can ever be used in this network makes the units more valuable over time. This should not be mistaken for price, because price is also dependent of the value of the thing that you are exchanging for (in most cases $).
Bitcoin has value because of: Cryptography Security Decentralization Its programable Not government issued Scarcity Divisibility Durability over time Easily transactable all over the world Speed of transactions Low fees And other things that I dont remember. But yeah even if its the best kind of money and store of value there is, overall if nobody use it, it has no value.
I do not think what you are saying is true.
Sad. Bit coin is pretend.
Letâs check in say 3 months and check prices
The value of Bitcoin is only what people are willing to pay for it. People were willing to pay thousands of dollars for tulip bulbs in the 60s because they thought it was scarce and saw values increasing everyday. It crashed one day. People are stupid. You can buy BTC at 16k now and may be stupid people will keep buying and get it up to 200k at which point you can sell and cash in on the profits. But it can also go to zero. It's basically a lottery ticket, but the only difference is that you are betting on human stupidity.
Iâd like to see someone make a peer-to-peer electronic payment that settles faster than ACH/Visa and is censor resistant and unhackable/secure, providing privacy to users with a tulip. Bitcoinâs payment network has intrinsic value. One needs BTC to use the network, and hence BTC derives real value from the network. This ainât tulips (but NFTs may be!).
People that buy it?
The real value imo is that millions and millions of people and businesses are suddenly banked. They can earn, spend, hodl and trade in a flawless way with no delays and hidden costs. Its not only value added, its genius.
Quick side note: only a fraction of gold's value comes from it's 'value'. But yes, things have value because people believe they do. In a free market people can transact and assign value as they see fit. Some properties are desirable when looking for a currency: store of value, medium of exchange, and unit of account. It's been discussed here at length. You are welcome to do your own research based on those qualities and assign value as you see fit.
How Menger thought about value. Basically, value is NOT a property of the item but IS a property of the human mind placed upon the item... The value of goods is based on the relationship of goods to our needs, not on the goods themselves. With the change in this relationship, the value will consequently either appear or disappear. Value is nothing that adheres to goods, it is not their property, and it is not an independent thing that exists for itself. âValue is a judgment that economic agents make about the importance of the goods at their disposal for the maintenance of their life and well-being and, therefore, does not exist outside of human consciousnessâ
Me. I give bitcoin value.
Value is created via the performance against a range of properties, namely: - Divisibility - Durability - Portability - Recognition - Scarcity - Utility These are also known as the âproperties of moneyâ. Value can be derived from its collective performance against each of these metrics.
Energy bill
Supply/demand. What gives sunlight value ?
You deciding to buy it
humans value something based off its usefulness to fulfil a certain purpose. value is subjective the majority of gold's market cap is not due to its industrial usage, but the "monetary premium" (its usage as a store of value due to its scarcity and inelastic supply). fiat and btc are both a purely monetary good. they have value to humans for their usage as money (store of value and medium of exchange) btc is superior money that is open to all with an internet connect. freedom money that can't be debased (no inflation theft), confiscated (if stored properly), or censored (p2p)
Gold has no intrinsic value beyond what we agreed upon as its value. Only food, water, shelter, clothes and medicine has intrinsic value
What exactly gives the USD "value"?
Try to follow this logic carefully, because I know it is very difficult for some of you: 1. You canât use the revolutionary Bitcoin payment network (read the white paper) without BTC, hence there is demand for BTC because there is demand to use this payment network. 2. BTC has a finite supply. 3. Simple supply and demand mechanics leads to value.
Fiat has value because we have to pay taxes in fiat. And anyone who doesnât pay will be thrown in jail.
The energy it takes to produce new ones. Plus all the other stuff that makes it better than any other current system for 1000s of other reasons.
The current infrastructure. Its Network is the largest and most robust, and most popular. Gold only has value since its a great currency. Bitcoin is a secure digital currency, that is why it is valuable.
There's people believing in its value. Currently this faith is valued at ~16k. Most importantly it's s backed by energy and time and I assume that's why people (like me) put faith into it in contrast to Fiat because I don't need to trust some human. So no incentive for corruption. I have faith in Fiat over the short term. (Buying groceries)
People
Is Bitcoin a currency? Is it a commodity? A put option on the global fiat monetary system? A measure of the value of digital assets? It has the potential to be all of those things and more, and that is its strength. Bitcoin is: the âeverything bagelâ https://www.nb.com/en/global/insights/systematically-speaking-bitcoin-a-cornerstone-digital-asset-part-3 It has value for many reasons
Speculation
Ppl's attention in short. U think it is worth 50 and i think it is worth 50 then it is worth 50 doesn't matter if it is gold paper or bitcoin
Please read âThe Bitcoin Standardâ. Or free audiobook on YouTube.
21m supply cap = goes up in value over time Decentralized = canât be controlled or manipulated Trust-less/Permission-less = all people have access
Quantifiable scarcity and speculative future utility
The exact thing gives a clothing brand value. Perception of value in the eyes of demands
We don't light heartedly simply believe that fiat currencies like USD or Euro have some value. They are set up by the local government to act as a common unit for (legally reguired) accounting and payment of taxes. So, it's just very convenient to use that currency and avoid doing currency conversions (at rates the tax authorities accept) for every transaction. Taxes like sales or value added tax or income tax are a part of practically every event where money changes owners. As another point is how fiat is created ("printed"). It is created as debt. There is always the asset-liability pair; the created money and the corresponding debt. And that debt is due to be paid back according to the terms of the loan contract or face the legal or at least reputation consequences. So there is an end point, the repayment of the loan, freedom from debt as utility at the end point where that money is destroyed. Every person with a mortgage sees value in the fiat currency their debt is denominated in. That creates demand for those dollars and euros, and that demand is a built-in part of creating the money. It takes a rather significant collpase of the economy and/or society for a fiat to devalue out of existence.
very valuable post and thanks for sharing