Does Bitcoin hold intrinsic value, or is it overvalued?

[cryptocoinsnews]

Thousands of words have been written on the subject, and many more will be written in the future. Unfortunately, very few of them will help us to answer that simple question. In any case, we already know the answer, and it has nothing to do with Bitcoin itself, but rather with the way in which we consider things valuable. Let me explain…

The concept of “value” is defined, in theory, as “the regard that something is held to deserve; the importance, worth, or usefulness of something.”  This definition would seem, on a first glance, to contain all what we need to know about value, except that this definition is incomplete when we talk about some specific objects or financial constructs.

In financial instruments of any kind –and Bitcoin could be considered one of those- value is increased by scarcity, desirability and an inability to duplicate whatever makes said instrument valuable. The equation that results in the value assigned to a given thing is more complex than it would seem, and it includes concepts related to physical limitations that prevent the duplication of the object, and the ability of this object to connect with our emotional nature as human beings.


Read the full story here: http://www.cryptocoinsnews.com/2013/12/03/bitcoin-hold-intrinsic-value-overvalued/

What do you think?

[niothor]

I think that i made a big mistake and wasted 5 seconds of my life clicking the unignore button to see if you're still spamming your blog.

[Bitcoinpro]

it definitely holds intrinsic value, many people mining with super computers using very expensive global communication networks, enabling in certain ways a free market global monetary system

it can have large swings in value as exploits are exposed, though they would normally be expected to  decrease with time

[bitcoinpsftp]

What I think is that it's undervalued.  Once it hits the large consumer base that it probably should hit, we'll see the price of bitcoin skyrocket.  There are more diamonds in the world than  bitcoins.  Just wait and see xD

[Bitcoinpro]

What I think is that it's undervalued.  Once it hits the large consumer base that it probably should hit, we'll see the price of bitcoin skyrocket.  There are more diamonds in the world than  bitcoins.  Just wait and see xD

simple economic projections of it being used even for just 1 common commodity in a limited market place shows explosive growth

[The 4ner]

Perhaps a little of both? 

[michiganmushrooms]

Indeed not, by your definition. Intrinsic is defined as something 'belonging naturally to; essential'. It would be a stretch to say even gold or silver has "intrinsic" value, as for some people it's utility is not immediately recognized or inherent.

The only thing I think you could say has 'intrinsic' value is a human being. If you are going strictly by the definition. The only thing of universal intrinsic value to any human being is another human being. Unless you are a serious misanthrope.

Of course though, as you say, yes we all(here on this forum anyway) understand and agree bitcoins are valuable. But I think it is a great stretch to say it is something inherent or intrinsic in bitcoin specifically that makes it valuable.

[bitcoinpsftp]

Indeed not, by your definition. Intrinsic is defined as something 'belonging naturally to; essential'. It would be a stretch to say even gold or silver has "intrinsic" value, as for some people it's utility is not immediately recognized or inherent.

The only thing I think you could say has 'intrinsic' value is a human being. If you are going strictly by the definition. The only thing of universal intrinsic value to any human being is another human being. Unless you are a serious misanthrope.

Of course though, as you say, yes we all(here on this forum anyway) understand and agree bitcoins are valuable. But I think it is a great stretch to say it is something inherent or intrinsic in bitcoin specifically that makes it valuable.

Oh I see, so food/water/shelter doesn't have intrinsic value?  I don't think you're applying the definition properly here.  Water for example holds much higher intrinsic value for a human being, than another human being.  I'd much rather be stuck on mars with 2,000 liters of water, than be stuck with another human to talk to.

[msc]

People shouldn't get hung up on "intrinsic value".  The value of Bitcoin is in the money people invest in it, by buying BTC, buying hardware, and writing software.  So yes, Bitcoin has value as long as people are able to extract value from it.  That will continue as long as the protocol works and the software continues to improve, regardless of whether it's used as a payment method or as a savings account.

Even without the Bitcoin network, the idea of cryptocurrency is a rather large piece of intellectual property that may lead to other things in the future.  

[michiganmushrooms]

Oh I see, so food/water/shelter doesn't have intrinsic value?  I don't think you're applying the definition properly here.  Water for example holds much higher intrinsic value for a human being, than another human being.  I'd much rather be stuck on mars with 2,000 liters of water, than be stuck with another human to talk to.

As much as I love arguing semantics, I will yield to this.

[TheJacob]

It depends on how you define intrinsic value. Can mean the worth of the metal in the coin or the value of a company due to its assets and future growth/profits alone. I say disregard a term no one can quite pin down and instead debate bitcoin on its merits.

[skeitel]

Oh I see, so food/water/shelter doesn't have intrinsic value?  I don't think you're applying the definition properly here.  Water for example holds much higher intrinsic value for a human being, than another human being.  I'd much rather be stuck on mars with 2,000 liters of water, than be stuck with another human to talk to.

No. Nothing has "intrinsic" value by itself. Nothing is valuable by definition. If you are a human, water is valuable. If you are a fridge, access to electricity could be more valuable to you than water.

=======
intrinsic
ɪnˈtrɪnsɪk/
adjective
adjective: intrinsic

    1.
    belonging naturally; essential.
    "access to the arts is intrinsic to a high quality of life"
=======

Everything is relative. If you just had all the water that you need a moment ago, the value of water plummets immediately for you. The value that we assign to things is changing all the time. And that's ok

[PenAndPaper]

In financial instruments of any kind –and Bitcoin could be considered one of those-

Bitcoin should be considered on of those among many other things that bitcoin should be considered among as well.
Softwares / payment platforms / protocols etc...

[tvbcof]

Regarding topic: No and undervalued.

Yes, and potentially undervalued.

Every transaction is a key element to a blockchain which is locked by a very high amount of real work that took real effort.  A 'bitcoin' is just a combination of these elements.  In fact, most of these elements are highly subsidized.  Any change in any of these elements would necessitate all of the work being re-done.  This, in my mind, gives Bitcoin a tremendous amount of 'intrinsic value'.

A 'bitcoin' is not at all unlike a bush-stroke in the Mona Lisa.  Who knows why the work is valued so highly, but it is.  If some jag-off gouges out part of it and paints in a different piece, the work itself becomes much less valued even if the guy re-worked it with a similar level of skill to Da Vinci.

[ChessWhiz]

Yes, I think it has intrinsic value, because it's useful.

However, nobody truly knows how much it is overvalued or undervalued, because that depends on demand, which is very fickle, to say the least.

[tbcoin]

http://es.scribd.com/doc/188644617/Bitcoin-Intrinsic-Value-Wedbush-Report-December-2013

[EccLipSe]

Money is a type of paper generated from cotton or a number in your bank account. But you and me and all of us believe that it is valuable. Then it is valuable.
This is kind of selective perception. You see what you believe.

Bitcoin undervalue. It'll be higher in the future. Idea is uniqe. We or our children will use it for a payment method. All goverments will have their crypto currencies. But bitcoin will be independent and overvalued than others. Less people will have it and it will be rare like diamond. Why? Because it is the first created decentralized cyrpto currency. And it'll be forever. Some of us will be very reach. But most of us will succumb to greed.Pepole wants to buy something. We never love saving

[skeitel]

Regarding topic: No and undervalued.

Why do you think so? Would be useful if you explain your reasoning

[polarhei]

Bitcoin like shares, they have no values unless people trust it.

I think people trust it as the cost of modifying the total supply, extremely costly so they trust, also widely accessible.

[skeitel]

I don't like the term "intrinsic value" because it doesn't make sense to me. You need a relationship between two things to have value, one to value the other. Nothing has value in and of itself.

Exactly this is one of the points of the article.
Moreover, wIthout a point of reference is hard to assign value to anything, including gold, silver, water, etc...

Now the question is how long for the media will continue confusing the general public with their own confusion about Bitcoin and these philosophical time-wasting pieces about "intrinsic value".

Regardless of the talk about value, if Bitcoin is a good idea, it will prosper. Too early to call it a bubble, particularly for those who don't fully understand it.