Why bitcoin isn't currency.

[deisik]

Let me help...

When used in an economic sense, "intrinsic value" is better stated as, "the value that the owner might attribute to some intrinsice characteristics or properties common to the object".  It was never a theory that an object can have a definable value as an intrinic property unto itself.  Even within the context of 'intrinsic value theory of money', all value is subjective.  Which is why we need markets to tell us what the price is.  (There is no way to determine how much any particular person may value his purchase, beyond what he is apparently willing to pay for it; but even then, the price isn't usually set by the buyer, but by what the next willing buyer isn't willing to pay.  Using ebay as an example, the final price of any auction is determined by what the first loser isn't willing to bid, not what the winner was willing to pay to win.)

It seems to me (and probably I'm not alone in such an opinion) that your purpose was not really to help us out (actually, we have all agreed to expel the term as useless) but rather to confuse matters even more...

[MoonShadow]

Let me help...

When used in an economic sense, "intrinsic value" is better stated as, "the value that the owner might attribute to some intrinsice characteristics or properties common to the object".  It was never a theory that an object can have a definable value as an intrinic property unto itself.  Even within the context of 'intrinsic value theory of money', all value is subjective.  Which is why we need markets to tell us what the price is.  (There is no way to determine how much any particular person may value his purchase, beyond what he is apparently willing to pay for it; but even then, the price isn't usually set by the buyer, but by what the next willing buyer isn't willing to pay.  Using ebay as an example, the final price of any auction is determined by what the first loser isn't willing to bid, not what the winner was willing to pay to win.)

It seems to me (and probably I'm not alone in such an opinion) that your purpose was not really to help us out (actually, we have all agreed to expel the term as useless) but rather to confuse matters even more...

If that is so, then please accept my appologies and ignore my post.

[deisik]

It seems to me (and probably I'm not alone in such an opinion) that your purpose was not really to help us out (actually, we have all agreed to expel the term as useless) but rather to confuse matters even more...

If that is so, then please accept my appologies and ignore my post.

Never mind! I read your post but couldn't grasp where you were going, so read the comments and saw it hadn't even been worth trying...

[Erdogan]

Let me help...

When used in an economic sense, "intrinsic value" is better stated as, "the value that the owner might attribute to some intrinsice characteristics or properties common to the object".  It was never a theory that an object can have a definable value as an intrinic property unto itself.  Even within the context of 'intrinsic value theory of money', all value is subjective.

What a non-definition.
Let me help:

With money, intrinsic value is the same as the value for direct use, as in ornament, electrical contacts and so on.

Note 1: It is still subjective like all other values. Note 2: that jewelry is not only ornamental, people behang themselves with gold jewelry also for the money value of it. Note 3: It is not possible to tell how much of the gold value is intrinsic, and how much is money value. Note 4: The only advantage of a money having intrinsic value, is that it can not fall to zero value, therefore gold will always be available and ready should it become money again after a period of gold-is-not-money.

[deisik]

Let me help:

With money, intrinsic value is the same as the value for direct use, as in ornament, electrical contacts and so on.

Note 1: It is still subjective like all other values. Note 2: that jewelry is not only ornamental, people behang themselves with gold jewelry also for the money value of it. Note 3: It is not possible to tell how much of the gold value is intrinsic, and how much is money value. Note 4: The only advantage of a money having intrinsic value, is that it can not fall to zero value, therefore gold will always be available and ready should it become money again after a period of gold-is-not-money.

Hey, I thought we had already done with the term... No more helping hands please!

[Erdogan]

With money, intrinsic value is the same as the value for direct use, as in ornament, electrical contacts and so on.

Does bragging to your friends about how much BTC you have count as "direct use"?

Not sure, its akin to the Apple "I am rich" app and showing off nice cars.

Does the use of Bitcoin as a general timestamping service (including its use in Namecoin merge mining) count as "direct use"?

I think not. There is a value to the system as such, as it may support trade better than less ideal money. This is just like the value of the telephone system, different from the value of the value of the terminals, the network equipment and the services. This value is not economic, even if it obviously is to the good for society. The same for the court system. It is obviously valuable, but you can not set a price on it.

[Erdogan]

I'm not sure what the point is of this "direct use", then.

Bitcoins can be used, directly, to show a chain of title for anything, not just money. They're especially useful for showing a chain of title for intangible things, like usernames, domain names, copyrights, land, and the like. They can also be used to show a chain of title for tangible things, though. A bitcoin could be used to show a chain of title for a bike, and a special lock could be put on the bike so that the current owner, and only the current owner, can unlock it. This could be used on a college campus as part of a bike sharing system.

Bitcoins can also be used, directly, for decentralized authentication.

Like gold, the most valuable use for bitcoins is as money. But like gold there are other relatively minor uses as well.

Yes, bitcoins are intangible; they are intellectual property - trade secrets. Possessing a bitcoin is equivalent to knowing a secret that no one else knows. If the point of "intrinsic value" is to exclude intangible/intellectual property, okay, bitcoins fail.

You have a point.

[sublime5447]

There is no such thing as intrinsic value. The theory of intrinsic value states that the value is derived from the item, and there is no such thing as labor value.. Value never comes from the item no matter what it is. Value is always a product of our consciousness. Value comes from our minds it is just a concept.

We could have the best item ever and if we don't choose to value it then it has no value, we could work our entire lives and never create one bit of value if other people don't chose to value our work.  

There is only the subjective value of an individual and the objective value of the market place.

I can say I don't value water, but the market can never say mankind doesn't value water. When you say intrinsic value you really mean objective market value.

Bitcoin does not have objective value. I can say i dont value it and mankind can say it doesn't value it.

The good news is currency is not supposed to be valuable. Currency doesn't have value any more and an inch has length. An inch represents length, currency represents value. It isnt value itself. When you hold currency you are not a saver of value you are the saver of a promise of value. The person holding value, he is the saver the person holding currency is the debt holder. Currency is and has always been an IOU. The currency supply is really a promise supply.

People think that debt based currency is bad, but all currency is debt based and always has been. If all debts public and private where to be paid off then currency would no longer exist. The fundamental problem is that with a dollar system those promises can be anything, we cant quantify those promises. If we want to measure those promises we have to do it in terms of an objective unit of value.

1 bitcoin is = to x number of joules of WORK (not labor)        
  

[deisik]

There is no such thing as intrinsic value. The theory of intrinsic value states that the value is derived from the item, and there is no such thing as labor value.. Value never comes from the item no matter what it is. Value is always a product of our consciousness. Value comes from our minds it is just a concept.  

We have already agreed on this just two pages earlier... Did you read them?

[deisik]

There is only the subjective value of an individual and the objective value of the market place.

I can say I don't value water, but the market can never say mankind doesn't value water. When you say intrinsic value you really mean objective market value. 

Yes, and this subjective value is called marginal utility, whereas the objective value of the market place is called price (not necessary in money terms). Let's start at last using correct and strict terms?

[MoonShadow]

There is only the subjective value of an individual and the objective value of the market place.

I can say I don't value water, but the market can never say mankind doesn't value water. When you say intrinsic value you really mean objective market value. 

Yes, and this subjective value is called marginal utility, whereas the objective value of the market place is called price (not necessary in money terms). Let's start at last using correct and strict terms?

Agreed.  Marginal utility is a much more precise term, and has everything to do with bitcoins & gold.  Gold's marginal utility is very small compared to it's market price, so the argument that gold has marginal utility (while assuming that bitcoins do not) is of small merit at best.  Gold is, by and large, valued by the market for it's monetary uses; particularly it's store-of-value monetary utility.  Bitcoins are, by and large, valued by the market for it's monetary uses; particularly for it's frictionless-global-medium-of-exchange monetary uses.  Neither gold nor bitcoin can compare to silver for non-monetary utility, but then silver isn't really a monetary commodity in our modern industrial society, but an industrial commodity.  It's value is, by and large, set by current and near term industrial demand for silver; not by long term speculation on it's future trade value.

I could argue that the Bitcoin network has features that grant bitcoins a non-monetary utility, but I don't think that such an argument is worthwhile.

[rampalija]

Who says it is not a currency?!

Watch the video about senate

[niothor]

Who says it is not a currency?!

Watch the video about senate

the people , by using it as a commodity or a store of wealth or investment rather than a currency.

[sublime5447]

Who says it is not a currency?!

Watch the video about senate

the people , by using it as a commodity or a store of wealth or investment rather than a currency.

+1 it is obvious at this point that it is not currency, but a asset like art or baseball cards.. that is to say a shit asset with no objective measure of value.

[deisik]

+1 it is obvious at this point that it is not currency, but a asset like art or baseball cards.. that is to say a shit asset with no objective measure of value.

Objective measure of value? What do you mean by this and is there any at all (with no concern for Bitcoin)?

[sublime5447]

https://www.youtube.com/watch?v=cV-32qmLG64#t=121


http://www.garynorth.com/public/11857.cfm no relation

[sublime5447]

+1 it is obvious at this point that it is not currency, but a asset like art or baseball cards.. that is to say a shit asset with no objective measure of value.

Objective measure of value? What do you mean by this and is there any at all (with no concern for Bitcoin)?

I mean that the unit of measure is objectively valuable. Like gold, or joules of work. 

[deisik]

I mean that the unit of measure is objectively valuable. Like gold, or joules of work. 

There is no place for objective value in modern economics in the sense you mean here. The theories claiming otherwise (for example, labor theory of value or intrinsic theory of value) have been abandoned by most economists for not being able to correctly describe real life economic phenomena...

[sublime5447]

I mean that the unit of measure is objectively valuable. Like gold, or joules of work. 

There is no place for objective value in modern economics in the sense you mean here. The theories claiming otherwise (for example, labor theory of value or intrinsic theory of value) have been abandoned by most economists for not being able to correctly describe real life economic phenomena...

There is an objective theory of value and it has not been abandoned also there is a reason it is called a theory and not a law. 


http://mises.org/daily/4907/

"The actual process through which subjective valuations lead to objective market prices is complicated. The average person doesn't need to understand it. However, everyone should be aware of the basic principles of modern value theory, as sketched in this article. Precisely because value is subjective, voluntary trades are win-win situations. At the same time, market prices are objective measures of wealth, and they allow firms to calculate whether they are using resources efficiently or not."

[deisik]

I mean that the unit of measure is objectively valuable. Like gold, or joules of work. 

There is no place for objective value in modern economics in the sense you mean here. The theories claiming otherwise (for example, labor theory of value or intrinsic theory of value) have been abandoned by most economists for not being able to correctly describe real life economic phenomena...

There is an objective theory of value and it has not been abandoned also there is a reason it is called a theory and not a law. 
http://mises.org/daily/4907/

"The actual process through which subjective valuations lead to objective market prices is complicated. The average person doesn't need to understand it. However, everyone should be aware of the basic principles of modern value theory, as sketched in this article. Precisely because value is subjective, voluntary trades are win-win situations. At the same time, market prices are objective measures of wealth, and they allow firms to calculate whether they are using resources efficiently or not."

The theory you are referring to here is correctly called subjective theory of value. And nowadays it is accepted by most mainstream schools of economics. Actually, I meant exactly this theory when I wrote in reply to your post that there is no objective value in modern economics...