Did I get any of the facts wrong? Is my reasoning flawed?
I don't see any facts that are wrong. In fact if he really wants to argue the idea that there is supposedly nothing backing bitcoins, you can pull the Ace and say that
the original value of a bitcoin was equal to the electricity (electrons, copper wire degraded, silicon & chipsets depreciation) that went into the creation of it. On top of that, because of those qualities and the fact that they were packaged into a nice little electronic token gave a slight buffer not to the intrinsic value but to the perceived value which, again, can be traced back to what the perceived value of other commodity currencies were at their own times.
I think you're spot on.
It would only have value for the maker, not afor any potential buyer.
Imagine this guy walks up to you with a
hideous photoshop.
He tries to sell it to you for $199,99 but seing the thing makes your stomache turn.
B.t.w. the picture is just data. It is stored somewhere on the internet.
But then he pulls his Ace.
He sais: "But i have worked on it for 3 months! I've put
so much time and energy into it that
it has to be worth something. Right?"
So, how much would you be willing to spend on the picture for the fact that the man put energy into creating it?
(Hint: If something
cost an X ammount of monies that doesn't mean it is
valued at the same X ammount of monies)