Bitcoin Forum

Value

Gold has such value because thousands of years ago when the Annunaki created us as a mining race to mine gold, it stuck in our memories forever.  So really it's in our genetics to seek to acquire gold to appease our reptilian creators.

no troll.

Gold is used for jewelry
Gold is used in electronics
Gold is used in dentistry
Gold is used in aerospace
Gold is used in medicine
Gold is used in architecture
Gold is used in making glass
Gold is used as an award


Bitcoins can only be used virtually, so you cannot compare them line-by-line to something that actually exists.

http://paulbohm.com/bitcoin-decentralization/ (http://paulbohm.com/bitcoin-decentralization/)

There is one missing reason why gold has value. An irrational belief in gold's value. Gold does have a few special properties, but it's value is just an illusion that we have come to accept. Of course if everyone buys into this illusion it creates real, tangible value.

Been trying to tell people for ages that things only have whatever value we perceive them to have. Gold, silver, etc. seem valuable because they have some properties that make them ideal for use as coins (durable, don't rust, etc.) and so having used them as money we directly associate them with our concept of value. In terms of scarcity, we should be valuing helium much more - we're running out of the stuff at an alarming rate and with no easy method of cheaply producing more the stuff should bring $100 or more for one balloon's worth, but we don't associate it with value. Of course it does have industrial uses so pretty soon we'll be associating helium with money one way or another... This is just one example.

Paper money? Worthless.
Gold? Worthless (except for limited industrial value; also, people like to wear shiny things).
Silver? See: Gold.
Diamonds? See: Gold.

Iron? Our world is built around this stuff but you don't see it for $50 an ounce do you?
Water? Just try living without it.
Food? See: Water.
Helium? Do you like having MRI machines, LCD screens, or pretty much any technology created with machines that require a stable sub-zero coolant?

Unfortunately scarcity and utility seldom dictate market price. Luckily folks of my generation and below tend to associate technology with value so a tech-based currency/commodity might have a future after all.

The same is true of diamonds.  Diamonds are not particularly rare.  De Beers spends millions convincing people that it's the only gift for the person you love.

Try to sell the diamond back to the jeweler for anywhere near what you paid for it.

Bitcoins also exist. Just saying...

Remember that Gold has value as a commodity, and it also has value as a money. Let's consider these separately...


1) Value is not intrinsic to gold. Rather, men value gold because of its unique properties. (Its beauty, weight, and rarity, its longevity over time, and chemical and electrical properties, among other things.)

2) Gold eventually ended up being used as MONEY also due to its unique properties...
    -- Gold is valued (see 1). But notice, water is also valued, yet it is not used for money. This is because gold "stores" more "value" in a much smaller space, than water does.
    -- Gold is also evenly divisible. But so is water. Therefore while divisibility is necessary as a property for a currency, it is not the only necessary property.
    -- Gold is also fungible. (Any unit of gold is basically the same as any other unit.) This is not true for, say, land, even though land is valuable.
    -- Gold also "stores" value consistently over TIME. This is unlike other valuable things, such as food.

Therefore, due to the above properties, gold naturally has become selected by the market, time and time again, and all over the world, as money.

There was never some committee of men who decided upon the "irrational belief" that gold is money. Rather, the invisible hand of the market decided it, and always has.

You might say, "But wait, everyone uses fiat money now, so hasn't the market chosen it as superior to gold?"  The answer is no: coercion is employed to interfere with the market. And those employing that coercion are the ones guarding the gold and using it behind the scenes for currency reserves and for international settlement. Therefore even today, gold is money, according to the very people who try so desperately to convince us that it is not.

Due to the above reasons, people have naturally learned to psychologically value gold as a universal money. It's true that this psychological belief is part of gold's value, since you can add it to the list of "valuable properties". But it is not irrational -- it is based upon history and market economics.

The only reason Bitcoin may turn out to be of value is also due to its unique properties, which are analogous to gold, and thus any belief in Bitcoin's value must necessarily also acknowledge gold's value.

After all, we all agree that Bitcoin is not valued "irrationally" but due to its unique properties, yes?  Gold is the same way.

Sure, virtually : )  So do nightelves, by your logic.

When you look at and handle gold you are convinced its worth more than any other thing you know and you don't need to be convinced by anyone of this, you just believe it. The psychological belief in its value is primary, not secondary. No invisible hand of the market made gold appealing to CAVE MEN who saw something shiny and were probably convinced it was something to do with god.

???? Are you a troll?

He is no troll, that's absolute fact!

It is why computer data and digital records have never ever been used in a court of law.

/sarcasm

Yes, value is subjective and Bitcoin is a commodity. See:

Bitcoin: A New Commodity Created To Serve Market Demand
http://economicsandliberty.wordpress.com/2011/06/22/bitcoin-a-new-commodity-created-to-serve-market-demand/ (http://economicsandliberty.wordpress.com/2011/06/22/bitcoin-a-new-commodity-created-to-serve-market-demand/)

TraderSteve

The average computer in 2010 shipped with a 250GB 3.5" hard drive weighing approximately 625 grams (~22 oz)

This means that each kilobyte of data "weighs" on average 0.000000088 oz. If I consider my wallet.dat to be "average" at ~352K that means it "weighs" ~0.000030976 oz.

According to bitcoinwatch, there are 6,637,400 BTC in existence right now, and the estimated network size is 11,250 users. This means that, excluding extreme cases, the average user has ~590 BTC.

We can therefore say that 590 BTC "weighs" ~0.000030976 oz and so 1 BTC "weighs" 0.00000005 Oz.

Since 1 BTC is currently valued at $15.4998 that means that it is trading at $309,996,000 per Oz.

Gold is currently valued at $1,545.99 per Oz, so ounce for ounce BTC is worth about 200,516 times as much as gold.

Yeah I was pretty bored  ;D

The properties of gold have been valued by people for thousands of years. The valuation of gold has been remarkably stable relative to things such as food and clothing. Gold has many valuable uses in addition to its desirability as a currency.

The history of bitcoins is short and their valuation has been volatile. Time will tell if this specific digital currency, which is currently backed by nothing (except its properties as a digital currency), will be valuable in 1, 10, 100, or 1000 years.

If someone made a gold coin with an embedded chip that contained 1 bitcoin, I think everyone's head would explode. Also, I like the idea of having a physical coin, for the irony. It wouldn't be practical, more of a collector item.