Quote from: deisik on December 17, 2013, 12:23:00 PM

Quote from: Erdogan on December 17, 2013, 10:42:01 AM

Quote from: deisik on December 17, 2013, 09:25:50 AM

Quote from: Erdogan on December 17, 2013, 08:11:25 AM

Quote from: deisik on December 17, 2013, 06:55:24 AM

Backing for you is something that you redeem dollars (or any other currency) for? I remember you saying that gold doesn't need backing since it has real value by itself (nice to look at and so forth). Could we then proceed to the assumption that its inherent properties is what gives it value (nice look, indestructibility, heaviness, etc)?

Partly yes, that is the intrinsic value, same as value for direct use. Most of the value of gold is the exchange value, value that comes from people who want to hold it for shorter or longer time. When you want to use something as money, you need to hold some sometimes. It is not the instant moving of the stuff from one person to another that gives it value, but the fact that you sometimes need to hold it. It is also called reservation demand.

Gold has some direct use value, but mostly exchange value. Bitcoin has only exchange value, which, for money, is ideal.

Do you count as direct use (and thus the basis for deriving value) such property of gold as prettiness to the eye (as porc would say)? In other words, do you think that this quality contributes anything to gold's value, even if you personally don't find gold attractive or pleasant to look at?

Yes, direct use value.

But this is entirely subjective, isn't it? If you can prove that, say, gold density is equal to some figure (or pull out from your pocket a two thousand year old coin), but you can't impose the opinion that gold is nice looking on anyone because it is strictly for them to decide on that matter. They may not share this view and therefore gold will not have so much value on account of that, right?

Yes subjective. Both types of value is subjective. That is why everyone should decide what they want for themselves in the market, and what they are willing to sacrifice to achieve it. If you already have some of that what you want, that will change your values, also your total situation, and not least, your personal preferences. If you like fresh vegetables, you might want to trade some of your time in a job, to somebody who wants the work done, in stead of growing the vegetables yourself. Nobody has the knowledge, nor the right, to decide for others. This is why voluntary action is best: more freedom (by definition), and more wealth for everybody.