Quote from: jaysabi on August 23, 2018, 07:33:29 PM

Quote from: Robert_Austin on August 16, 2018, 08:13:44 PM

Quote from: jaysabi on August 16, 2018, 05:45:56 PM

Quote from: daringkhan30 on August 16, 2018, 02:10:32 PM

Bitcoins have no intrinsic value. But since they were introduced to the world in 2009 by inventor Satoshi Nakamoto (a pseudonym), they have turned into a billion-dollar market and have been designated a currency by the U.S. government. Since the days when stones and shells were recognized as a means of payment, currency has taken many forms. What makes bitcoin a currency is what it does, not what it is. "To the extent it looks, walks and acts like a duck, this 'duck' is a currency,"

The US government has never designated Bitcoin a currency. The closest to an official designation of any kind is by the IRS, which has deemed Bitcoin to be "property" for taxing purposes. That's not a currency. It is true however that Bitcoin has no intrinsic value. It doesn't represent anything in particular, but people have started acknowledging it to have value. This is an entirely artificial construct, and the value is only a representation of what large groups of people agree it is worth. Because of this, there is an inherent desire to constantly value it ever higher, because that's the only way you can get a return. On the other hand, potential buyers want to value it lower so they don't spend as much to acquire it. But real currencies are being traded to acquire the property (Bitcoin), the crypto itself doesn't function as a currency very much in the real world.

Ah but if it has no intrinsic value, how can they declare it an asset? Can't have both I'm afraid...

In the new age of the internet, anything online can be deemed to have intrinsic value. We saw this phenomenon in the late 1990's when everyone thought it would be a great idea to invest in websites with a lot of hits. These hits were of course perceived value, but they were being sold as intrinsic value. Logic had it at the time that more hits meant more profits for a company.

The intrinsic value in bitcoin is the blockchain behind it. That very code makes it worth much more than any other idea in the last 20 years.

You're confusing intrinsic value with extrinsic value. Intrinsic value is something that has value due to utility or some innate feature of the object that makes it valuable; essentially that the value comes from within (hence the name "intrinsic"). Extrinsic value is the value people assign to something, perhaps even arbitrarily. Silver has intrinsic value because it's a necessary metal for many industrial uses. Water has intrinsic value because it's necessary to survive. Both of these have value that comes from within the commodity. Bitcoin has value because everyone just decides it does. That's why it has value as an asset and it isn't intrinsic.

Your website example is not an example of things with intrinsic value. It was people arbitrarily assigning value to something that had no intrinsic value, which eventually collapsed the bubble. Bitcoin has traced the same path with the 70% crash this year. Additionally, Bitcoin isn't necessary for blockchain, so if you want to make the argument the blockchain has intrinsic value (and I'm not even sure I agree with that), it would mean nothing for Bitcoin.

What is "real money" you are talking about? If you mean fiat currency what does really make fiat money "real money"? Is it the governmental backed currency? Because there are tokens and coins that are backed up governments as well, go check Estonia and Venezuela who has governmental backed money yet none of them are as big as neither bitcoin nor dollars.

Is it the common usage? Because bitcoin is used and has a higher marketcap than most countries money as well. Is it laws and acceptance? Because I am pretty sure there are more places in the world where you can spend bitcoin and can't spend Zimbabwe trillions. Bitcoin IS REAL MONEY.

jayhawk1

Posts

Merits