2 problems with Bitcoin

[cryptomining]

Since I already answered your questions and you didn't reply you either didn't understand my post or chose not to respond. I'll simply ask a series of questions...

1. With the exception of your body and mind; what do you believe has actual intrinsic value?

2. Do you believe the current fiat is perfect?

3. Do you align more with the political beliefs of capitalism or communism? Which has more benefits in your opinion?

1. not btc
2.  current fiat, no. but why replace it with yours. how about real money, 1792 coinage act.
3.  free markets, adam smith ,consitution, yadda yadda

Thank you for answering.

1. I've already expressed that intrinsic value by definition is an oxymoron. There is no such thing as guaranteed value with the exception of your body and mind and only because those are essential to your actual existence and so holds guaranteed personal value to you (Would you accept 1 trillion dollars or a mountain of gold in exchange for your life?). BTC is no exception as intrinsic value is non-existent. Gold has no intrinsic value; value by definition can never be intrinsic. No exceptions...

2. Agree, current fiat is not perfect. Bitcoin is innovation and change in the right direction. 1792 coinage act is not perfect either because of fractional reserve banking.

3. Bitcoin is 100% aligned with your ideological beliefs. Bitcoin is owned by the carrier and always executes a peer to peer transaction while government fiat can never be owned by the user Government fiat is a debt to repay while Bitcoin is an asset which gains equity over time.

1 you dont like the idea so it must be wrong, got ya.  i'll gladly carry off all your gold even if it goes to zero.  You can keep your digital bits if btc goes to zero though.  I hope you see a least a glimmer of intrinsic value in there.


2  not my point - a dollar is so many grains of silver - no such thing as fraction reserving a real money system.

3 I'll decide my beliefs, you want to me switch fiat teams, i want real money.

thank you for responding, im having fun talking about these ideas.
 

[cryptomining]

Anything that i give value to, has value.

sure, valued your post.

[toknormal]

I really wonder what planet people are living on when they suggest Bitcoin has no "instrinsic value". Please consider these 3 things:

[1] - the term "intrinsic value" implies that the thing is of value to itself. It's meaningless. Things either have a utility value or an exchange value, end of story.

Gold has a "generic exchange value" because it was the bitcoin of the day before we had a worldwide electronic trading platform. i.e. was a rare manifestation of something that had a high resistance to counterfeiting, fairly limited supply, was fungible and "worked" as a generic token of wealth. Unfortunately gold is physical, it doesn't travel through wires and so something new has to be found that performs the same function on an electronic network. Numbers alone are not enough because they require a massive amount of counterparty involvement to endorse their value.

[2] - as a technology, Bitcoin has an economic value because is makes a multi-billion dollar counterparty industry known as the banking system theoretically redundant. It has a utility value because it can perform a peer-to-peer monetary function where nothing else can. Until Bitcoin was invented, no such technology had been discovered or invented. Please think about that for a minute - not one single technology existed that was capable of performing this monetary function universally without a counterparty. So it not only has utility value due to the diverse and unprecedented functionality of the Bitcoin network, but it also has exchange value because it works as a generic token.

[3] - Anything that works as a generic token of exchange automatically accrues to multiples of it's utility value because there are just so few things that have satisfactory properties to perform this function. Try going to a funfare and purchasing one of those plastic tokens that let you go on rides. Now compare the price of the plastic token at the funfare and the price an equivalent piece of plastic in the hardware shop. There will be about a 10000% (ten thousand percent)  difference and that difference is the value that the token has while performing a monetary function. It has nothing to do with "intrinsic value", it's to do with whether that thing is performing a monetary, store-of-wealth function or not. The same applies to gold - it has a high value because it's in the role of the plastic token at the funfair. No other reason - not because it's "nice and shiny", not because it's used in Jewellery, teeth, electronics or any other nonsense. Because it's performing a monetary function as a token of exchange and works as such.

People who don't get this are like aliens from space who land on the planet and see gold as "just another bit of useless metal lying in the ground". I don't blame aliens from space for saying that because they are right - until someone decides to start using it as money. That's when everything changes. Same applies to Bitcoin.

So conclusion: things don't get used as money because they have "intrinsic value", it's the other way around. "Intrinsic value" accrues to something through it's ability to be used as a token of exchange.

[pungopete468]

Since I already answered your questions and you didn't reply you either didn't understand my post or chose not to respond. I'll simply ask a series of questions...

1. With the exception of your body and mind; what do you believe has actual intrinsic value?

2. Do you believe the current fiat is perfect?

3. Do you align more with the political beliefs of capitalism or communism? Which has more benefits in your opinion?

1. not btc
2.  current fiat, no. but why replace it with yours. how about real money, 1792 coinage act.
3.  free markets, adam smith ,consitution, yadda yadda

Thank you for answering.

1. I've already expressed that intrinsic value by definition is an oxymoron. There is no such thing as guaranteed value with the exception of your body and mind and only because those are essential to your actual existence and so holds guaranteed personal value to you (Would you accept 1 trillion dollars or a mountain of gold in exchange for your life?). BTC is no exception as intrinsic value is non-existent. Gold has no intrinsic value; value by definition can never be intrinsic. No exceptions...

2. Agree, current fiat is not perfect. Bitcoin is innovation and change in the right direction. 1792 coinage act is not perfect either because of fractional reserve banking.

3. Bitcoin is 100% aligned with your ideological beliefs. Bitcoin is owned by the carrier and always executes a peer to peer transaction while government fiat can never be owned by the user Government fiat is a debt to repay while Bitcoin is an asset which gains equity over time.

1 you dont like the idea so it must be wrong, got ya.  i'll gladly carry off all your gold even if it goes to zero.  You can keep your digital bits if btc goes to zero though.  I hope you see a least a glimmer of intrinsic value in there.


2  not my point - a dollar is so many grains of silver - no such thing as fraction reserving a real money system.

3 I'll decide my beliefs, you want to me switch fiat teams, i want real money.

thank you for responding, im having fun talking about these ideas.
 

1. I have no feelings on the matter. I'm only explaining the reality that intrinsic value does not exist outside of the value of your own life. However that value cannot be denominated in any currency... Gold obviously has value. However the reason gold has value is the same reason that Bitcoin has value. People are willing to trade something for it. This associated value is not intrinsic in either gold or Bitcoin.

Again, how much gold would you take in trade for your life? I doubt you would consider the value of your life in terms of any exchangeable value. That's what makes the value of your life "intrinsic."

2. The reason fractional reserve banking was used is due to the sheer weight of coinage. People would literally be over encumbered if they needed to carry enough coinage to make a large transaction. This caused people to accept paper notes. You can't prevent fractional reserve banking under a traditional gold standard unless you force people to actually carry their wealth with them.

3. That's completely understandable that you want real money. However, unless you are willing to fill your pockets with several pounds of coins every time you leave the house; fractional reserve banking will remain a side effect of the gold standard. You can't effectively have one without the other...

4. Try making an online transaction with a silver coin...

With Bitcoin there is no such thing as fractional reserve. You never become over encumbered and you can appreciate all of the same benefits of having real money. It gains equity over time the same as gold or silver and cannot be counterfeit.

I'll be happy to exchange opinion with you and if you can successfully refute my points logically and reasonably I will change my opinion on the subject.

 

[toknormal]

I'm only explaining the reality that intrinsic value does not exist outside of the value of your own life. However that value cannot be denominated in any currency... Gold obviously has value. However the reason gold has value is the same reason that Bitcoin has value. People are willing to trade something for it. This associated value is not intrinsic in either gold or Bitcoin

That's why I considered 2 types of value in my post above - [1] utility and [2] exchange. Your life falls into category one by definition - it's of value because you are using it and not planning to exchange it. The term "intrinsic" is a philosophical one which means different things to different people. In science and engineering it actually has a proper definition - an intrinsic property of a material is one that is independent of the quantity of material present or it's environment. For example density and heat capacity would be intrinsic whereas weight, volume and kinetic energy would be extrinsic because they all depend on external factors.

If we apply that definition to money, then value is an extrinsic property because it depends on markets. The intrinsic properties are things like fungibility, resistance to counterfeiting and so on. So according to that perspective, Bitcoin shares those intrinsic properties with gold.

The reason fractional reserve banking was used is due to the sheer weight of coinage. People would literally be over encumbered if they needed to carry enough coinage to make a large transaction

I think that modern fractional reserve banking owes more to President Nixon needing to get off the gold standard so he could inflate the money base to pay for the Vietnam war amongst other things.

Also, I think you're mixing 2 things - the advent of paper money and fractional reserve banking. You can have a banking system which issues paper money (so people don't have to "carry coinage around") on a 1 to 1 reserve ratio. That wouldn't be a fractional reserve system, just a banking system.

Conversely, there's nothing stopping a fractional reserve banking system springing up around a cryptocurrency economy, in fact the exchanges probably do a bit of that already just to "oil the wheels" of their transaction engines.

I'll be happy to exchange opinion with you and if you can successfully refute my points logically and reasonably I will change my opinion on the subject.

I don't see you disagreeing with me on anything. Also, you said you had no feelings on the subject so I'm not even aware if your making a challenge to viability of cryptocurrencies or not    

[krampus]

1 you dont like the idea so it must be wrong, got ya.

See, I run a forum elsewhere, and I recognize this kind of comment. You're taunting the people here. Goading them, even. For that, you're a fuckwit and a troll and I care not one iota whether you think BTC has intrinsic value or not. I don't need to defend the concept, because there are enough people that value Bitcon such that what you believe is meaningless.

The people who are attempting to actually defend the concept of Bitcoin in this thread are arguably dumber than you are, FWIW -- we both know the effort is futile and that you're not actually here to debate the subject -- you're here to troll. So seriously -- go fuck yourself.

[pungopete468]

I'm only explaining the reality that intrinsic value does not exist outside of the value of your own life. However that value cannot be denominated in any currency... Gold obviously has value. However the reason gold has value is the same reason that Bitcoin has value. People are willing to trade something for it. This associated value is not intrinsic in either gold or Bitcoin

That's why I considered 2 types of value in my post above - [1] utility and [2] exchange. Your life falls into category one by definition - it's of value because you are using it and not planning to exchange it. The term "intrinsic" is a philosophical one which means different things to different people. In science and engineering it actually has a proper definition - an intrinsic property of a material is one that is independent of the quantity of material present or it's environment. For example density and heat capacity would be intrinsic whereas weight, volume and kinetic energy would be extrinsic because they all depend on external factors.

If we apply that definition to money, then value is an extrinsic property because it depends on markets. The intrinsic properties are things like fungibility, resistance to counterfeiting and so on. So according to that perspective, Bitcoin shares those intrinsic properties with gold.

The reason fractional reserve banking was used is due to the sheer weight of coinage. People would literally be over encumbered if they needed to carry enough coinage to make a large transaction

I think that modern fractional reserve banking owes more to President Nixon needing to get off the gold standard so he could inflate the money base to pay for the Vietnam war amongst other things.

Also, I think you're mixing 2 things - the advent of paper money and fractional reserve banking. You can have a banking system which issues paper money (so people don't have to "carry coinage around") on a 1 to 1 reserve ratio. That wouldn't be a fractional reserve system, just a banking system.

Conversely, there's nothing stopping a fractional reserve banking system springing up around a cryptocurrency economy, in fact the exchanges probably do a bit of that already just to "oil the wheels" of their transaction engines.

I'll be happy to exchange opinion with you and if you can successfully refute my points logically and reasonably I will change my opinion on the subject.

I don't see you disagreeing with me on anything. Also, you said you had no feelings on the subject so I'm not even aware if your making a challenge to viability of cryptocurrencies or not    

I was responding to the OP, "cryptomining" but I agree with you 100%.

Fractional reserve banking was a problem even before Nixon. After the Bretton Woods agreement the US agreed not to loan out more dollars than could be immediately exchanged for gold. Needless to say, the United States broke that promise quickly and Nixon only suspended the gold exchange ending the gold standard. He did this to "defend the Dollar against the speculators" so to speak, it just so happened the speculators were right.

Fractional reserve was a problem even in the early 1900's. Coinage was deposited to the treasury and the depositor was issued a note to guarantee the availability of the deposit. The banks would guarantee more than they actually had out of greed. In 1929 the banks weren't supposed to run out of silver or gold. Each depositor was guaranteed that the deposit would be available on demand.

With the exchanges, the sum of currency "in" must match the sum of currency "out" unless the exchange is stealing from its customers... That's a little different from fractional reserve but similar enough I suppose. I would avoid an exchange if it operated in this practice.

I believe crypto currency is absolutely viable. No challenge to the contrary.

[pungopete468]

1 you dont like the idea so it must be wrong, got ya.

See, I run a forum elsewhere, and I recognize this kind of comment. You're taunting the people here. Goading them, even. For that, you're a fuckwit and a troll and I care not one iota whether you think BTC has intrinsic value or not. I don't need to defend the concept, because there are enough people that value Bitcon such that what you believe is meaningless.

The people who are attempting to actually defend the concept of Bitcoin in this thread are arguably dumber than you are, FWIW -- we both know the effort is futile and that you're not actually here to debate the subject -- you're here to troll. So seriously -- go fuck yourself.

I had the same thought initially about the reply to my question.

This isn't a debate because there hasn't been any support from the other side of the argument.

I'm defending the concept of Bitcoin to random people who read this. I don't want somebody who types, "bitcoin intrinsic value" into google to pull up this thread and see that nobody in the bitcoin community can explain why Bitcoin has value.

I don't feel dumb for choosing to spend a bit of my time defending something I believe in. I consider it similar to the propagation of a wave form. Even if it's a small push in the right direction it can influence the strength of the collective.

[R2D221]

i would hoard gold, silver, diamonds, land, instictively even if society placed no value upon these things.  One only hoards bitcoins when society percieves value upon it.

Why would you hoard gold, silver and diamonds if they didn't have value? I wouldn't want stuff just taking up space in my garage.

[krampus]

I'm defending the concept of Bitcoin to random people who read this. I don't want somebody who types, "bitcoin intrinsic value" into google to pull up this thread and see that nobody in the bitcoin community can explain why Bitcoin has value.

I don't feel dumb for choosing to spend a bit of my time defending something I believe in. I consider it similar to the propagation of a wave form. Even if it's a small push in the right direction it can influence the strength of the collective.

Be my guest. I still think y'all are just giving the fuckwit troll exactly what he wants.

(And you're probably not going to single-handedly save Bitcoin by defending it against every random fuckwit that wanders in to this forum. "Tilting at windmills" is the term I would use to describe it).

[MoonShadow]

I believe the "Carrington event" relates to a solar storm that would knock out most electronic means of communication. How is the current banking system protected from the same event? If anything Bitcoin is more resilient as the blockchain (public ledger) is replicated across 1000s of PCs.

Indeed, it is.  No matter the length of delay, the bitcoin network can pick up right where it left off once the Internet was back up, regardless of whether or not the outage was a local, national or worldwide event.  BTW, the Carrington Event wasn't worldwide, and another similar solar flare event would also be unlikely to be worldwide.  The hardest hit area would be the side of the Earth that leads into the flare, and high latitudes are better defended by nature of the field density of the Earth's magnetic field, so there would be variations in the extent of damage.  Some banks might have their records competely destroyed, others hardly effected.  Bitcoin would be safe somewhere.

A bigger issue with a Carrington type event would, sadly, be clean drinking water.  90%+ of the population of the United States is dependent upon regular electric service to maintain the municipal water utilities, since most don't have water storage that exceeds three days of regular demand.

[DCP]

Thanks Toknormal for your intelligent, well thought out replies.  People really show off their level of understanding and intelligence when they say it has no intrinsic value.   We've never before in our history had a way to store money securely and independently for free and be able to send specific amounts to anyone on the planet quickly with no fees. This is huge.  People keep thinking it's either fiat or bitcoin, no - there are always multiple forms of currency in circulation.

[SirBitsalot]

I see some people here are very emotional about Bitcoins! Lol, joking aside, let the facts speak for whether Bitcoins are good are not.

[dissident]

no doubt people are emotional. When I think what I could have done had I got in on the ground floor of bitcoin with all that money it makes me want to cry. I didn't even know of it's existence until it was in the 100's though and by then the truly easy profits had been made.  I do not believe it will hit anywhere close to $10,000 before a better coin will replace it, and I will continue to look and see which one that might be. I don't believe any of the coins right now offer anything unique besides namecoin, which lets you register .bit domain names which in an of itself is not that useful unless DNS servers support it.

A coin that could somehow limit blockchain sizes, or allow fraudulent transactions to be reversed, providing some form of fraud protection, is ultimately what is needed for it to become mainstream. Assuming any big banks ever do this, they will do it with their own crypto currencies probably set at a fixed price, currencies where they can manipulate the supply to prevent huge price fluctuations... then you have to worry about government taxes.... what is so appealing about crypto currencies now is that these 'profits' early adopters made are basically tax free... if you go and use some bitcoin to buy some platinum, gold, or whatever off a site, that's tax free profit you used.

That's HUGE since people who have to slave away for a living like myself lose a third of their income to the government ALWAYS. Tax free money is huge, it has more value than regular money.  I could kick myself because while I was sitting there looking in black friday forums trying to save $50 on a laptop, I was damn close to buying litecoin as it was hovering in the $2.35 range. Had it not been black friday season, and this surge would have occured a month later, I'd be singing a different tune.

[e4xit]

cryptomining - welcome to the ignore list. Nice work!

As a number of other posters have correctly pointed out, it seems that most of these people posting topics and ideas like this have completely misunderstood the misnomer that is "intrinsic value"...

What intrinsic value does anything have, save for land, food and water? (and possibly freedom but I dont want to get all U.S.A. or philosophical up in here). Nothing, thats what.

What "intrinsic value" does gold have, apart from being shiny and nice to look at. Nothing. Sure, we can use it for other things, such as electronics, but this is only a value that we can place on gold because of how we can use it. Sure, gold is a conductor, gold does not easily tarnish, etc. etc. but this is still not "intrinsic value", these are simply characteristics or properties. Everything has characteristics and properties. Bitcoin included. It is how people percieve the value of these characteristics which gives something value, not the inherent-ness of the characteristics.

Bitcoin can be used by people in very valuable ways. Whether or not this possiblity has fully come to fruition in the open market yet is another question - the properties are still there.

AAAAnd I can't be bothered to write the rest of my reply, becuase I see what a Troll you are in other threads and dont want to waste my time talking to someone who will not listen and think about what they have heard, only recite rubbish.

[porcupine87]

Actually all bitcoins(= block chain) are distributed all over the world. If the meteor hits your gold, your gold is gone. But your bitcoins not!

Yeah, ignore list! If he is good at definitions, he might know, what a troll is... Or maybe he really thinks he is the first one with this question? The intrinsic value of gold is little compared to its current price...

[augustocroppo]

1. I've already expressed that intrinsic value by definition is an oxymoron. There is no such thing as guaranteed value with the exception of your body and mind and only because those are essential to your actual existence and so holds guaranteed personal value to you (Would you accept 1 trillion dollars or a mountain of gold in exchange for your life?). BTC is no exception as intrinsic value is non-existent. Gold has no intrinsic value; value by definition can never be intrinsic. No exceptions...

Nope.

Intrinsic value ≠ Guaranteed value

Yes, value can be intrinsic.

2. Agree, current fiat is not perfect. Bitcoin is innovation and change in the right direction. 1792 coinage act is not perfect either because of fractional reserve banking.

3. Bitcoin is 100% aligned with your ideological beliefs. Bitcoin is owned by the carrier and always executes a peer to peer transaction while government fiat can never be owned by the user Government fiat is a debt to repay while Bitcoin is an asset which gains equity over time.

Wrong and confunsed.

BTC is never is possession of the carrier while anyone can possess banknotes from fiat currencies.

Fiat money is an asset as well and BTC is also used to pay debts.

[augustocroppo]

What intrinsic value does anything have, save for land, food and water? (and possibly freedom but I dont want to get all U.S.A. or philosophical up in here). Nothing, thats what.

That is relative.

What "intrinsic value" does gold have, apart from being shiny and nice to look at.

The intrinsic value of gold is equivalent to the value to obtain that gold.

[Lauda]

Anything that i give value to, has value.

sure, valued your post.

10$.

[pungopete468]

1. I've already expressed that intrinsic value by definition is an oxymoron. There is no such thing as guaranteed value with the exception of your body and mind and only because those are essential to your actual existence and so holds guaranteed personal value to you (Would you accept 1 trillion dollars or a mountain of gold in exchange for your life?). BTC is no exception as intrinsic value is non-existent. Gold has no intrinsic value; value by definition can never be intrinsic. No exceptions...

Nope.

Intrinsic value ≠ Guaranteed value

Yes, value can be intrinsic.

2. Agree, current fiat is not perfect. Bitcoin is innovation and change in the right direction. 1792 coinage act is not perfect either because of fractional reserve banking.

3. Bitcoin is 100% aligned with your ideological beliefs. Bitcoin is owned by the carrier and always executes a peer to peer transaction while government fiat can never be owned by the user Government fiat is a debt to repay while Bitcoin is an asset which gains equity over time.

Wrong and confunsed.

BTC is never is possession of the carrier while anyone can possess banknotes from fiat currencies.

Fiat money is an asset as well and BTC is also used to pay debts.

I disagree.

The definition of "intrinsic."

in·trin·sic
inˈtrinzik,-sik/Submit
adjective
1.
belonging naturally; essential.

The definition of "value."

val·ue
ˈvalyo͞o/
verb
1.
estimate the monetary worth of (something).

So to put those two words together in an exchange market quite LITERALLY makes no sense.

Trade value is purely speculative and estimated, always. Otherwise the value would remain constant regardless of the quantity available and would always be invariable.

If something had intrinsic value then the price would never change. Take for instance your life... You will never place a monetary value on your life. This is intrinsic value and as such is invariable.


Also, in regard to number 3. Every dollar you might one day hold in your hand is a loan from the Federal Reserve which will be repaid with interest. You can spend it but you can never own it and you will pay interest by means of your Federal income tax which is 100% used to pay for the interest on the dollar. That's why some people get a tax refund at the end of each year. It isn't used for any other purpose and so the excess is returned.

There should be no income tax on Bitcoin as it has no interest debt to require such a tax. This is the foundation of the income tax in the first place!