The intrinsic value of a bitcoin

[johnyj]

franky1 you are confusing 'value' with 'cost'.
Value (economics), a measure of the benefit that an economic actor can gain from either a good or service

Bitcoins does not provide a gain based on the effort that is taken to create them. A bitcoin on it's own does not even provide any benefit, only the properties of the network can provide one.

addendum: You can also not imply that the value must always be larger than the cost, it is normally true under sound economical conditions, but this is not always the case. Certain "renewable" energy sources for example, like alcoholic fossil fuel substitutes take more energy to create than they provide historically. This is possible because of irrational market participants like politicians who provide subvention for these technologies.

Value, to its root, is a psychological phenomenon: "I like it, I want it", just because people like it, want it, it has value

[Kazimir]

I don't think a Bitcoin has any intrinsic value. I think to have intrinsic value it would have to be tangible.

Does electricity have intrinsic value?

It's 2013, we live in the "information age". Tangibility has become irrelevant.

[franky1]

franky1 you are confusing 'value' with 'cost'.
Value (economics), a measure of the benefit that an economic actor can gain from either a good or service

Bitcoins does not provide a gain based on the effort that is taken to create them. A bitcoin on it's own does not even provide any benefit, only the properties of the network can provide one.

addendum: You can also not imply that the value must always be larger than the cost, it is normally true under sound economical conditions, but this is not always the case. Certain "renewable" energy sources for example, like alcoholic fossil fuel substitutes take more energy to create than they provide historically. This is possible because of irrational market participants like politicians who provide subvention for these technologies.

value is as you say and the value to a miner has to be above its COST or is not any beneficial value to them to mine any more. hense the LOW price is the beneficial value to miners to keep producing.. same story goes with farming too, there is a cut off point where farmers will give up making and selling their harvests. and thats the intrinsic value of the food you eat.

not the retail price you see at walmart!!

this is where market makers and profiteers have warped peoples minds to make you believe their inflated prices are of value.
where you see retail shops offering food items £$1 more expensive then their competitor but if they put a "value price" sticker on the price tag, the sheeple think its automatically the best price they will find as its not worth the retailer selling it if it was any cheaper.

plus i never said the price will never go below $110 what i SUGGESTING is that if it goes below the mining cos profitability then that is the point to start asking questions about bubbles bursting or whats the big news story that could cause this. anything above mining cost/value/profitability line. is based on mark makers playing with the price. which you should all calm down about and not 'worry' about the swings, just use them to your advantage to gain profit from if day trading

[ElectricMucus]

franky1 you are confusing 'value' with 'cost'.
Value (economics), a measure of the benefit that an economic actor can gain from either a good or service

Bitcoins does not provide a gain based on the effort that is taken to create them. A bitcoin on it's own does not even provide any benefit, only the properties of the network can provide one.

addendum: You can also not imply that the value must always be larger than the cost, it is normally true under sound economical conditions, but this is not always the case. Certain "renewable" energy sources for example, like alcoholic fossil fuel substitutes take more energy to create than they provide historically. This is possible because of irrational market participants like politicians who provide subvention for these technologies.

value is as you say and the value to a miner has to be above its COST or is not any beneficial value to them to mine any more. hense the LOW price is the beneficial value to miners to keep producing.. same story goes with farming too, there is a cut off point where farmers will give up making and selling their harvests. and thats the intrinsic value of the food you eat.
[...]

No the intrinsic value of the food I eat is the calories, vitamins, proteins, taste, texture and smell. Intrinsic value is always at the consumer end. Items can have the same intrinsic value if it costs a fortune to make or is practically free.

[dscotese]

God guys,

Sorry I used the term.  "Intrinsic" is just another word that we attempt to use to communicate.  Apparently, it's not a very useful one as an adjective for "value".  Perhaps because value itself is subjective.

It always bothers me to see people arguing about the meanings of words.  It's so academic and pointless.  The important stuff is what the person who wrote them meant.  If all they mean is "the meaning of this term is not what you think it is," nothing more needs to be said, and the speaker can be a bit more philosophical about it (Sorry Inugo Mantoya): "That word does not mean to me what it means to you."

What I meant to point out is that since November, every new bitcoin represents 1/25th of a marker that can be used to prove data existed before or after a point in time, and that said marker is valuable to me.

THANK YOU MINERS!

[mobodick]

I think people misuse "intrinsic value". Intrinsic basically means a property or aspect that is naturally, fundamentally, or essentially part of something (it doesn't exist without it). Value is a relationship. In order for something to have "intrinsic value", it must be essential to that which gives it value.

Unless you need bitcoin to survive, it has no intrinsic value to you. It's all subjective.

No, what you describe is an intrinsic property, not intrinsic value.

The economic definition of intrinsic value goes along the lines of: "a property that has immediate and non-economic value to you".

So say you have a gold coin.
You can use it as relative value in an economy by bartering it.
But it has an intrinsic value of being made of gold and you can use that to make a nice ring or to appreciate its shinyness.

Another example: a potato.
If you eat it you use it for its intrinsic value.
If you sell it you use it for its economic value.
And then the buyer can use it for its intrinsic value (eat it) or for its economical value (sell it on).

This all becomes confusing with bitcoin because bitcoin is information and its purpose it to offer economic value.

I think that with bitcoin you need to make a distinction in what you call bitcoin.
There is bitcoin as in how many you currently own and there is bitcoin the p2p currency system.
If you own a couple of bitcoin then their intrinsic value is basically nothing. They are just some numbers in the blockchain and they are not usefull outside of the bitcoin system.
But this system surrounding the blockchains (the clients, the miners and the networks) does have some intrinsic value.
It provides for a mechanism that has some definite numerical properties that can be used for other things than bitcoin.

[vokain]

But this system surrounding the blockchains (the clients, the miners and the networks) does have some intrinsic value.
It provides for a mechanism that has some definite numerical properties that can be used for other things than bitcoin.

This system, this confidence it provides, also provides a foundation for merchants and traders and consumers to come together towards an increasingly frictionless means of trade.

[mobodick]

It always bothers me to see people arguing about the meanings of words. 

YES!
Let's just agree that whatever someone else says is just the same thing as everybody else says but with their words having different meanings.
That way everyone will understand each other all the time and the world will be a better place...

[mobodick]

But this system surrounding the blockchains (the clients, the miners and the networks) does have some intrinsic value.
It provides for a mechanism that has some definite numerical properties that can be used for other things than bitcoin.

This system, this confidence it provides, also provides a foundation for merchants and traders and consumers to come together towards an increasingly frictionless means of trade.

Sure, but that is still its economic value.
Opening this space is an important property of the bitcoin system as a currency.

[vokain]

But this system surrounding the blockchains (the clients, the miners and the networks) does have some intrinsic value.
It provides for a mechanism that has some definite numerical properties that can be used for other things than bitcoin.

This system, this confidence it provides, also provides a foundation for merchants and traders and consumers to come together towards an increasingly frictionless means of trade.

Sure, but that is still its economic value.
Opening this space is an important property of the bitcoin system as a currency.

Sorry I skipped over most of the thread. What about the philosophy that lies behind Bitcoin? Is that not an intrinsic property of the protocol, that we should not be subject to tyranny under the money controllers?

[mobodick]

What I meant to point out is that since November, every new bitcoin represents 1/25th of a marker that can be used to prove data existed before or after a point in time, and that said marker is valuable to me.

Definitions are important!

I think you're spot on calling this an intrinsic value.
You take some property that is not strictly economical and use it for another purpose.
The only thing that is kindof unclear is whether intrinsic value requires to be consumable.
What i mean is whether the fact that your re-use of the chain does not consume the information you use means it is not intrinsic anymore.

I mean, take a photograph.
It can have intrinsic (emotional) value for you.
If you then sold a copy of it to someone, would that per se reduce its intrinsic value to you?

[mobodick]

But this system surrounding the blockchains (the clients, the miners and the networks) does have some intrinsic value.
It provides for a mechanism that has some definite numerical properties that can be used for other things than bitcoin.

This system, this confidence it provides, also provides a foundation for merchants and traders and consumers to come together towards an increasingly frictionless means of trade.

Sure, but that is still its economic value.
Opening this space is an important property of the bitcoin system as a currency.

Sorry I skipped over most of the thread. What about the philosophy that lies behind Bitcoin? Is that not an intrinsic property of the protocol, that we should not be subject to tyranny under the money controllers?

I don't think so because intrinsic value in some way should contrast with economic value. That is the purpose of defining something as intrinsic value. It is that part that is not used to act in an economy.
It gets interesting with information because you can copy it. So you can enjoy the informations intrinsic and economic value at the same time.
So i guess that with information we need to take this overlap for what it is.
Intrinsic value then becomes simply that what you can extract from a piece of information that is beyond its economic value. And economic value is simply the value for which you can barter the information.

[vokain]

But this system surrounding the blockchains (the clients, the miners and the networks) does have some intrinsic value.
It provides for a mechanism that has some definite numerical properties that can be used for other things than bitcoin.

This system, this confidence it provides, also provides a foundation for merchants and traders and consumers to come together towards an increasingly frictionless means of trade.

Sure, but that is still its economic value.
Opening this space is an important property of the bitcoin system as a currency.

Sorry I skipped over most of the thread. What about the philosophy that lies behind Bitcoin? Is that not an intrinsic property of the protocol, that we should not be subject to tyranny under the money controllers?

I don't think so because intrinsic value in some way should contrast with economic value. That is the purpose of defining something as intrinsic value. It is that part that is not used to act in an economy.
It gets interesting with information because you can copy it. So you can enjoy the informations intrinsic and economic value at the same time.
So i guess that with information we need to take this overlap for what it is.
Intrinsic value then becomes simply that what you can extract from a piece of information that is beyond its economic value. And economic value is simply the value for which you can barter the information.

Can you not extract the freedom and flexibility that this provides over our current alternatives? How else do you send money to another country without paying fees (assuming Bitcoin is a money)? The value of a bitcoin is almost universal as you can trade it anywhere, which would be an economic value, but  the freedom of actually transmitting that value is beyond the economic value that the value of that bitcoin has (ie what it can buy).

I think Let's keep going

[mobodick]

But this system surrounding the blockchains (the clients, the miners and the networks) does have some intrinsic value.
It provides for a mechanism that has some definite numerical properties that can be used for other things than bitcoin.

This system, this confidence it provides, also provides a foundation for merchants and traders and consumers to come together towards an increasingly frictionless means of trade.

Sure, but that is still its economic value.
Opening this space is an important property of the bitcoin system as a currency.

Sorry I skipped over most of the thread. What about the philosophy that lies behind Bitcoin? Is that not an intrinsic property of the protocol, that we should not be subject to tyranny under the money controllers?

I don't think so because intrinsic value in some way should contrast with economic value. That is the purpose of defining something as intrinsic value. It is that part that is not used to act in an economy.
It gets interesting with information because you can copy it. So you can enjoy the informations intrinsic and economic value at the same time.
So i guess that with information we need to take this overlap for what it is.
Intrinsic value then becomes simply that what you can extract from a piece of information that is beyond its economic value. And economic value is simply the value for which you can barter the information.

Can you not extract the freedom and flexibility that this provides over our current alternatives? How else do you send money to another country without paying fees (assuming Bitcoin is a money)? The value of a bitcoin is almost universal as you can trade it anywhere, which would be an economic value, but  the freedom of actually transmitting that value is beyond the economic value that the value of that bitcoin has (ie what it can buy).

I think Let's keep going

The freedom you talk about is part of the bitcoin currency. So i would still call it economic value. It is a value that flows from the use of bitcoin as a currency.
Think of it this way: The fact that you can sell a sandwitch in every country in the world does not give it more intrinsic value. It gives it more economical value.

[Rassah]

Regarding intrinsic value, *shameless plug*:  http://www.whyisntbitcoinworthless.com

[ElectricMucus]

Regarding intrinsic value, *shameless plug*:  http://www.whyisntbitcoinworthless.com

Already noticed.
https://bitcointalk.org/index.php?topic=223120.msg2345390#msg2345390

[johnyj]

Cash (or many kinds of coupon) does not have any intrinsic value, but as long as someone is backing it and provide some utility, its value is recognized

Bitcoin also need a strong entity backing it, that's the people who are willing to accept bitcoin as a payment and provide products/services

[Rassah]

Regarding intrinsic value, *shameless plug*:  http://www.whyisntbitcoinworthless.com

Already noticed.
https://bitcointalk.org/index.php?topic=223120.msg2345390#msg2345390

That GIF link hasn't worked before, and still doesn't. Keeps giving 504 errors. Because people who use "buttcoin" know computer stuffs really good like.

[wachtwoord]

Counter questions: What is the intrinsic value of an ounce of gold?

[fellowtraveler]

Counter questions: What is the intrinsic value of an ounce of gold?

Gold does not have "intrinsic value" per se. Rather, men value it subjectively due to its unique properties (which are objective.)