Quote from: Longmarch on January 20, 2013, 02:06:23 AM

Quote from: xxjs on January 20, 2013, 01:30:56 AM

That was a long shot. Do you really need there to be intrinsic value in bitcoins?

If bitcoin is to fit the regression theorem, then yes bitcoin would need to have an intrinsic, or more accurately, a barterable value.

This discussion isn't really about bitcoin, though, is it? Bitcoin clearly has a value and clearly has utility as a money. This discussion, I think, is really about the validity of the regression theorem. Because if bitcoin doesn't fit the theorem, then the theorem is disproven.

As for whether my point is a long shot, it isn't. It's exactly dead on. That's why I'm surprised that the point never comes up. It's impressive that Satoshi saw the barterability of proof-of-work tokens and jumped right from there to turning them into money. To understand both cryptography and economics enough to see this possibility and actually implement it is a stroke of genius.

I don't see the need to satisfy the regression theorem. With fiat being around as an example for fifty years, people have no problem seeing that a currency without intrinsic value could work. The problem is only to disperse some bitcoins and trigger one exchange. Maybe it was the historic pizza exchange. Mises developed his therories over time, it did not come to him from the gods. Had he lived now, we might have another version.

If you really need it to have intrinsic value, you can anyway not use the cost of production. It has to be a utility value. Bragging power comes to mind. Satisfaction of inventing the thing. Satisfaction of having optimized the mining program. Satisfaction of dreaming about bitcoins as a world currency while sitting in a dark room at night, looking at the hash per second tachometer. Showing a wallet display to your little sister, feeling smarter. Something like that. If anything at all, the utility value of each bitcoin must have been miniscule in the very beginning.