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 Author Topic: Regression theorem & Bitcoin revisited  (Read 5141 times)
painlord2k
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 February 02, 2013, 05:29:08 PM

Please use the correct definition of intrinsic in the realm of money. You find it upthread.

I think our definitions are close.
Does the difference matter?

"Intrinsic value: What the money stuff is useful for to you directly
Exchange value: The added value the money stuff has because it can be exchanged for useful things."

Stuff could have:
1) "Direct Use" (it is valued because I could use it to directly satisfy my needs/wants) --> The first ten fishes have direct use value because I can eat it
2) "Direct Exchange Use" (it is valued because can be exchange for something I can consume) --> The second ten fishes have direct exchange value because I could exchange them for strawberries).
3) "Indirect Exchange Use" (it is valued because I could exchange it for something I'm not interested per se but I could later exchange for something I really want) The third ten fishes have indirect exchange value because I can exchange them for gold and the I can exchange gold for eggs - the guys with eggs (are they guys?  ) don't want my fishes but want gold.
So how do you deal with situations where the direct need that is satisfied in 1) is its use in exchange in 2) like in bitcoin?
Can you separate these concepts in bitcoin?

2) No, because Direct Exchange Use is to exchange something I have with something someone have to consume it (strawberries would be eaten, an hammer would be owned and used to hammer, etc.). I exchange my fishes for strawberries because I want eat strawberries and I value the fishes I exchange for strawberries less than the strawberries I obtain in exchange (the guy selling strawberries prefer the fishes he receive over the strawberries he part).

1)A> There is no Direct Use satisfied by me if I give you a BTC and you give me a BTC in exchange. If the direct use is simply the exchange, then exchanging anything would satisfy it; the value of the things exchanged and what would be exchanged would be irrelevant.

1)B> If you only give me a BTC, this is a gift, not an exchange, and gifts could have any or no value for the giver or the receiver.
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painlord2k
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 February 02, 2013, 05:33:39 PM

I think that exchange value is the only value for a bitcoin. If you can find some direct use value, it's going to be small.
Same for a dollar bill. Mostly exchange value, miniscule direct use value.

Gold has some direct use value in jewelry and electronics. Probably more exchange value.

Minimal direct use value is a plus for money, as saving doesn't harm any direct use.

If the direct use is small enough, for humans, it is like it is zero.
For example, the exchange value of a crumb of bread is zero, because no one would sell it or buy it, because the value is too small to care.
Longmarch
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 February 14, 2013, 11:38:01 AM

What _can_ you use bitcoins for, other than exchange?

Quote
The most widely known and used proof-of-work is the hashcash cost-function which is used by Bitcoin, and also some anti-spam systems and as an anti-DoS mechanism in a number of other protocols. In the context of anti-spam, a proof of work on the recipients address can be attached to the email in an email header. Legitimate senders will be able to do the work to generate the proof easily (not much work is required for a single email), but mass spam emailers will have difficulty generating the required proofs (which would require huge computational resources).

https://en.bitcoin.it/wiki/Proof_of_work

This is the "pre-existing commodity value" of Bitcoin.

painlord2k
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 February 14, 2013, 09:25:48 PM

What _can_ you use bitcoins for, other than exchange?

Quote
The most widely known and used proof-of-work is the hashcash cost-function which is used by Bitcoin, and also some anti-spam systems and as an anti-DoS mechanism in a number of other protocols. In the context of anti-spam, a proof of work on the recipients address can be attached to the email in an email header. Legitimate senders will be able to do the work to generate the proof easily (not much work is required for a single email), but mass spam emailers will have difficulty generating the required proofs (which would require huge computational resources).

https://en.bitcoin.it/wiki/Proof_of_work

This is the "pre-existing commodity value" of Bitcoin.

This is a cost, not a value.
But, maybe, it could be interpreted as a "direct use value".

If instead of asking "what is the direct use value of bitcoin" we ask "what is the direct use value of a Proof of Work" we could be on something.

The direct use value of a proof of work is the knowledge the work needed limit the output of the proves offered.

Longmarch
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 February 14, 2013, 10:51:42 PM

This is a cost, not a value.
But, maybe, it could be interpreted as a "direct use value".

If instead of asking "what is the direct use value of bitcoin" we ask "what is the direct use value of a Proof of Work" we could be on something.

The direct use value of a proof of work is the knowledge the work needed limit the output of the proves offered.

The idea is that Bitcoin is a proof-of-work token using the same protocol as Hashcash ( https://en.wikipedia.org/wiki/Hashcash ) which itself is/was a scheme for limiting spam, wherein inclusion of the Hashcash token would cost the user something (CPU time).  Individual emails would be cheap to send, but mass emails would be expensive.  Under this system, email receivers could dismiss email that included no POW tokens, and senders would thereby be required to include them.

In other words, you would not be able to get an email through without the token... you would need them in order to send email.  (Also, most users would not find it convenient to generate these tokens on their own.  They would prefer to buy the tokens from a producer.)  This is the pre-existing commodity value of the tokens, that they are a necessity, or have a real-world utility, as tokens that legitimize email.

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