Post
Topic
Board Economics
Re: Tulip Mania 2.0
by
Silberman
on 25/09/2021, 19:37:34 UTC
But now you've given an example of gold's intrinsic value- use in jewelry.  The value comes from it's intrinsic properties; not people speculating on it's value, but actual use.  That's not where bitcoin's value comes from, nor NFTs.  In both cases, that value comes exclusively from speculation on the future value of them, based solely on a mass assumption of future worth.  To differentiate, gold as a store of value is completely arbitrary, just like bitcoin.  But gold still has a demand outside of store of value (the intrinsic value of gold) and bitcoin and NFTs do not.  That's the difference between bitcoin and gold and why there's no difference between bitcoin and NFTs.
The value of bitcoin comes from the network effect and it is described in the Metcalfe’s law, as an example if you had a telephone that could only call your own number then that network is useless as you are the only member of it, but if the network has millions and millions of numbers you can call then the network becomes very valuable due to its size, this is why social networks like Facebook and others have value and it is the reason bitcoin has value as well.