deisik (OP)
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December 02, 2018, 02:06:26 PM |
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As they say, everything counts in large amounts
But before I proceed, I want to make it clear from the beginning that I fully embrace and endorse the tenets and notions of the subjective theory of value which basically claims that there is no intrinsic or inherent value in anything as all value comes from utility, i.e. a capacity of being useful for satisfying certain needs or attaining certain ends. The amount of this capacity obviously depends on how we use or think we can use something to our advantage. In simple terms, all value exists purely subjectively in our heads and comes about through our assessment of something and its usefulness to us (so-called marginal utility)
With that said, this notion of all value being entirely subjective is often sort of overkill for most practical intents and purposes, and we can safely go along with an assumption that there is a certain intrinsic value in things. In case of money, conceptually, it is transactional utility which can be defined as a capacity for transferring value, conveniently and reliably. In essence, this is what makes money into money. From this point of view, Bitcoin can do the job pretty damn well as it is state-agnostic and trustless. Given the nascent technologies like Lightning Network, Bitcoin has a lot of potential and plenty of space for gaining more transactional utility just around the corner
They also say that Bitcoin is a survivor and this post explains why exactly. No matter how low the price can go and for how long, it won't lose its capacity for transferring value, i.e. its transactional utility, as it is built in and will remain there unless Bitcoin is destroyed completely or its network compromised beyond repair. Ultimately, it doesn't depend on market price and speculation as it is rather a matter of how fast, cheap and reliable you can transact with Bitcoin. All in all, its price has little to do or interfere with this capacity. That's the reason why Bitcoin is here to stay and why it may in fact be a good day to buy hard these days
Feel free to share your opinion below if you have any comments, ideas, maybe even a few satoshis of criticism (in a constructive and helpful way)
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cellard
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December 02, 2018, 04:32:59 PM |
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Transactional utility counts, but it seems for some reason a lot of people don't realize that holding bitcoin and not moving it is as legit of an use as transacting bitcoin around. By holding it you make use of it's exceptional features of unconfiscatable status, neutral asset, decentralized and so on. So you don't need to move it.
Bitcoin economy will grow a lot when there is a bi demand for it above fiat currencies, that situation must happen naturally. Governments force you to use their currency, Bitcoin is not forced upon people, so it must be voluntary. Sooner or later it will come as inflation hits all mayor currencies around the planet. But even without a big "bitcoin economy", it can reach reserve currency status. Reserve currencies aren't used by most people.
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deisik (OP)
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December 02, 2018, 04:56:30 PM |
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Transactional utility counts, but it seems for some reason a lot of people don't realize that holding bitcoin and not moving it is as legit of an use as transacting bitcoin around. By holding it you make use of it's exceptional features of unconfiscatable status, neutral asset, decentralized and so on. So you don't need to move it
No, I don't think so In fact, I wanted to write about it in the OP but left it for further discussion. And now it seems to be the right time to raise this issue in a separate post. As I have written on numerous occasions already, holding doesn't contribute to value because it only adds to volatility. And it seems to be common knowledge that volatility takes away from adoption (Bitcoin as a means of payment). So how can holding be possibly legit? If what you say were true, that would mean that mutually exclusive things (holding and transacting) would be right at the same time. And no, this is not quantum mechanics nor do I think anyone is going to seriously challenge the assumption that meaningful and purposeful transacting (as in value transfer) is good for Bitcoin and its transactional utility. But then it leaves only one option, basically, that holding is inherently bad for it as a whole in the long run
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cizatext
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December 02, 2018, 06:02:43 PM |
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Transactional utility counts, but it seems for some reason a lot of people don't realize that holding bitcoin and not moving it is as legit of an use as transacting bitcoin around. By holding it you make use of it's exceptional features of unconfiscatable status, neutral asset, decentralized and so on. So you don't need to move it.
Bitcoin economy will grow a lot when there is a bi demand for it above fiat currencies, that situation must happen naturally. Governments force you to use their currency, Bitcoin is not forced upon people, so it must be voluntary. Sooner or later it will come as inflation hits all mayor currencies around the planet. But even without a big "bitcoin economy", it can reach reserve currency status. Reserve currencies aren't used by most people.
I don't agree with your assertion because you tend to drive us more into investment side of bitcoin rather then it transactions utility as the topic have stated, bitcoin is a digital currency so as that it should function more as a transactions utility rather then as a store of value. Holding bitcoin add a little or no value to the bitcoin network as a currency what add real value is it adoption and that comes with it utility.
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deisik (OP)
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December 06, 2018, 06:21:57 AM |
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Transactional utility counts, but it seems for some reason a lot of people don't realize that holding bitcoin and not moving it is as legit of an use as transacting bitcoin around. By holding it you make use of it's exceptional features of unconfiscatable status, neutral asset, decentralized and so on. So you don't need to move it.
Bitcoin economy will grow a lot when there is a bi demand for it above fiat currencies, that situation must happen naturally. Governments force you to use their currency, Bitcoin is not forced upon people, so it must be voluntary. Sooner or later it will come as inflation hits all mayor currencies around the planet. But even without a big "bitcoin economy", it can reach reserve currency status. Reserve currencies aren't used by most people.
I don't agree with your assertion because you tend to drive us more into investment side of bitcoin rather then it transactions utility as the topic have stated, bitcoin is a digital currency so as that it should function more as a transactions utility rather then as a store of value. Holding bitcoin add a little or no value to the bitcoin network as a currency what add real value is it adoption and that comes with it utility. I will expand your thought a little I've been thinking about this "store of value" thing recently and I've come up with the following idea or understanding. As long as you store coins to spend them later (e.g. you want to buy something expensive that you don't have the money at the moment), it's okay. But if you stash coins only to dump them later at a higher price (or whatever price, if things don't go your way and you are forced to liquidate), it will only end in building up volatility through abrupt supply and demand squeezes (when someone buys or sells a shitload of coins) In a nutshell, it seems nothing wrong inherently with the concept of sound money (money being used as a store of value). It is how we employ and exploit this concept in practice. Ironically, I could even come to say that "hodling" effectively destroys the store of value aspect of Bitcoin by increasing volatility, while spending in real life actually decreases it by giving money (in this case Bitcoin) more real value and consequently diminishing speculative value, both in relative and absolute terms (as supply remains the same)
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Kakmakr
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December 06, 2018, 06:31:24 AM |
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I have to agree with you that the real value of Bitcoin is not in it's intrinsic value, but more in the usefulness of the technology. Bitcoin is a problem solver to many people and I can use myself as an example. I was a victim of credit card fraud and I lost a lot of money. I use to buy a lot of things online, but since my credit card was maxed out and I had to cough up a lot of money to pay back that debt, I was hesitant to participate in ecommerce. Bitcoin has changed this significantly for me and I can buy things online without having to worry about my credit card information being hacked or stolen by anyone. This use case gives value to Bitcoin for me and people all over the world that wants a safe ecommerce experience.
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aoluain
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December 06, 2018, 08:05:53 AM |
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Good discussion, especially at a time when there is confusion and panic. Over the last year there has a great expectation that bitcoin would deliver another ATH or constantly rising in price, and it may yet, who's to know?
Besides all the expectation and speculating bitcoin doesn't loose its no.1 function, to transfer wealth and payment. This function has waned a bit because of all the speculation.
But because it is decentralised it has to find its own path and value and This takes time and is constantly moving.
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davis196
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December 06, 2018, 01:10:21 PM |
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More noobs,bitcoin haters and panic sellers should read this thread. For me,the investment and the transaction nature of bitcoin are tied together,so there's no need to argue which one dominates.Every asset will have high value,only if it easy to be transfered from one person to another.
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perfect999
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December 07, 2018, 09:39:19 AM |
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As they say, everything counts in large amounts
But before I proceed, I want to make it clear from the beginning that I fully embrace and endorse the tenets and notions of the subjective theory of value which basically claims that there is no intrinsic or inherent value in anything as all value comes from utility, i.e. a capacity of being useful for satisfying certain needs or attaining certain ends. The amount of this capacity obviously depends on how we use or think we can use something to our advantage. In simple terms, all value exists purely subjectively in our heads and comes about through our assessment of something and its usefulness to us (so-called marginal utility)
With that said, this notion of all value being entirely subjective is often sort of overkill for most practical intents and purposes, and we can safely go along with an assumption that there is a certain intrinsic value in things. In case of money, conceptually, it is transactional utility which can be defined as a capacity for transferring value, conveniently and reliably. In essence, this is what makes money into money. From this point of view, Bitcoin can do the job pretty damn well as it is state-agnostic and trustless. Given the nascent technologies like Lightning Network, Bitcoin has a lot of potential and plenty of space for gaining more transactional utility just around the corner
They also say that Bitcoin is a survivor and this post explains why exactly. No matter how low the price can go and for how long, it won't lose its capacity for transferring value, i.e. its transactional utility, as it is built in and will remain there unless Bitcoin is destroyed completely or its network compromised beyond repair. Ultimately, it doesn't depend on market price and speculation as it is rather a matter of how fast, cheap and reliable you can transact with Bitcoin. All in all, its price has little to do or interfere with this capacity. That's the reason why Bitcoin is here to stay and why it may in fact be a good day to buy hard these days
Feel free to share your opinion below if you have any comments, ideas, maybe even a few satoshis of criticism (in a constructive and helpful way)
So what exactly are you trying to say here, is it that Bitcoin is money or what? We all know that Bitcoin can be used for transaction and that’s the purpose for making Bitcoin. It can either be a means of making cheap and fast transactions online, but what about offline? It can also be used as a savings for value, but not really reliable cause it’s highly volatile and you can lose at anytime.
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kryptqnick
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December 07, 2018, 02:08:54 PM |
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Transactional utility counts, but it seems for some reason a lot of people don't realize that holding bitcoin and not moving it is as legit of an use as transacting bitcoin around. By holding it you make use of it's exceptional features of unconfiscatable status, neutral asset, decentralized and so on. So you don't need to move it
holding doesn't contribute to value because it only adds to volatility. And it seems to be common knowledge that volatility takes away from adoption (Bitcoin as a means of payment). I agree with you. Bitcoin was meant as money, not as some valuable asset. If money is not used, it eventually contributed to the loss of value. I believe that money has value when you are able to purchase goods with it. If you are not purchasing and your friends are not purchasing as well, it means you are keeping useless papers (numbers and symbols in case of cryptos) and one day people will realize that and will not accept them anymore. Money is meant to be circulating, it is its constant exchange, its performative nature is what culturally asserts that there is some value in it. One might object that gold was used for payments and then became an asset and nothing bad happened to it. I think that gold's different, because it was never only money. It was also jewelry, a part of fancy clothing and stuff like that. You cannot use bitcoin in such ways, so you should be transacting it. Unfortunately, though, it's hard to really use bitcoin, because there aren't many options to do so. And such unstability of the price is not helping as well.
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deisik (OP)
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December 07, 2018, 02:47:18 PM |
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As they say, everything counts in large amounts
But before I proceed, I want to make it clear from the beginning that I fully embrace and endorse the tenets and notions of the subjective theory of value which basically claims that there is no intrinsic or inherent value in anything as all value comes from utility, i.e. a capacity of being useful for satisfying certain needs or attaining certain ends. The amount of this capacity obviously depends on how we use or think we can use something to our advantage. In simple terms, all value exists purely subjectively in our heads and comes about through our assessment of something and its usefulness to us (so-called marginal utility)
With that said, this notion of all value being entirely subjective is often sort of overkill for most practical intents and purposes, and we can safely go along with an assumption that there is a certain intrinsic value in things. In case of money, conceptually, it is transactional utility which can be defined as a capacity for transferring value, conveniently and reliably. In essence, this is what makes money into money. From this point of view, Bitcoin can do the job pretty damn well as it is state-agnostic and trustless. Given the nascent technologies like Lightning Network, Bitcoin has a lot of potential and plenty of space for gaining more transactional utility just around the corner
They also say that Bitcoin is a survivor and this post explains why exactly. No matter how low the price can go and for how long, it won't lose its capacity for transferring value, i.e. its transactional utility, as it is built in and will remain there unless Bitcoin is destroyed completely or its network compromised beyond repair. Ultimately, it doesn't depend on market price and speculation as it is rather a matter of how fast, cheap and reliable you can transact with Bitcoin. All in all, its price has little to do or interfere with this capacity. That's the reason why Bitcoin is here to stay and why it may in fact be a good day to buy hard these days
Feel free to share your opinion below if you have any comments, ideas, maybe even a few satoshis of criticism (in a constructive and helpful way)
So what exactly are you trying to say here Maybe, that Bitcoin is here to stay (thanks to its transactional utility)? Regarding your other questions, you may want to read my previous posts on this matter. As I always say in such cases, money is what money does. So if something is used for trasferring value on a wide enough scale, it is money, as simple as it gets. If you feel lost or have doubts as to whether something can be called money, use this simple, rule of thumb definition. If we define transactional utility as a specific quality attributable to money (something intrinsic to money), we can as easily use this definition in reverse, i.e. if something has enough transactional utility (e.g. in the exchange of goods), we have all reasons to consider it money Oh, and yes, Bitcoin can in fact be used both offline and offchain, with Lightning Network, for example. Once fully activated, it will add dramatically to Bitcoin's transactional utility. It looks like we are on the verge of revolutionary changes in global finances, and that explains why Bitcoin is changing pants (corrected) hands right now
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magneto
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December 07, 2018, 11:09:56 PM |
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As they say, everything counts in large amounts
But before I proceed, I want to make it clear from the beginning that I fully embrace and endorse the tenets and notions of the subjective theory of value which basically claims that there is no intrinsic or inherent value in anything as all value comes from utility, i.e. a capacity of being useful for satisfying certain needs or attaining certain ends. The amount of this capacity obviously depends on how we use or think we can use something to our advantage. In simple terms, all value exists purely subjectively in our heads and comes about through our assessment of something and its usefulness to us (so-called marginal utility)
With that said, this notion of all value being entirely subjective is often sort of overkill for most practical intents and purposes, and we can safely go along with an assumption that there is a certain intrinsic value in things. In case of money, conceptually, it is transactional utility which can be defined as a capacity for transferring value, conveniently and reliably. In essence, this is what makes money into money. From this point of view, Bitcoin can do the job pretty damn well as it is state-agnostic and trustless. Given the nascent technologies like Lightning Network, Bitcoin has a lot of potential and plenty of space for gaining more transactional utility just around the corner
They also say that Bitcoin is a survivor and this post explains why exactly. No matter how low the price can go and for how long, it won't lose its capacity for transferring value, i.e. its transactional utility, as it is built in and will remain there unless Bitcoin is destroyed completely or its network compromised beyond repair. Ultimately, it doesn't depend on market price and speculation as it is rather a matter of how fast, cheap and reliable you can transact with Bitcoin. All in all, its price has little to do or interfere with this capacity. That's the reason why Bitcoin is here to stay and why it may in fact be a good day to buy hard these days
Feel free to share your opinion below if you have any comments, ideas, maybe even a few satoshis of criticism (in a constructive and helpful way)
You're absolutely right. There is a reason why we hold bitcoin. It's not just because we expect the prices to go up because others will buy it. While that is true, but that is because we think that more people in the future will appreciate this transactional utility of BTC and adopt its technology, pushing demand up. And as you said, this utility doesn't just dissipate when prices drop like it is right now. Bitcoin performs the same functions now as it did in the bull market last year, there is no difference. And it will continue to have transactional utility in the future. That, combined with the trust that people has got in bitcoin in its decentralisation and legitimacy due to a decade of track record, and it being the first cryptocoin, is what gives BTC its "intrinsic value" (if there is such thing in the world).
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deisik (OP)
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January 04, 2019, 05:30:09 PM |
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And as you said, this utility doesn't just dissipate when prices drop like it is right now. Bitcoin performs the same functions now as it did in the bull market last year, there is no difference. And it will continue to have transactional utility in the future. That, combined with the trust that people has got in bitcoin in its decentralisation and legitimacy due to a decade of track record, and it being the first cryptocoin, is what gives BTC its "intrinsic value" (if there is such thing in the world).
Well, in fact there is a difference Right now, with lower prices, Bitcoin works even better for value transfer. Let's recall that when prices went crazy a little over a year ago, the transaction fees became extremely prohibitive bordering on outright insane. To have your transaction confirmed you had to pay something like 50 dollars. The inference is that higher prices don't necessarily mean higher transactional utility. Strictly speaking, Bitcoin's transactional utility is inversely related to its speculative utility, which markedly depends on rising prices. When prices shoot to the moon, hardly anyone is going to use Bitcoin for anything other than speculation and profiteering
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