TimeBits (OP)
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July 21, 2019, 08:59:54 AM |
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I forget who it was on this forum but they told me scarcity gives something value. Why is USD worth anything then and rice? People give things value and normally people are the reason that thing has value, most of it being Delusional delusion. Scarcity does not = Value, Where is 2-12? 14? 16-23?  I don`t think it was gmaxwell, that said this, I was just reading his old post when I took the screen shot, It was someone else I can`t remember who it was, But this proves them wrong. |
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Bitcoin mining is now a specialized and very risky industry, just like gold mining. Amateur miners are unlikely to make much money, and may even lose money. Bitcoin is much more than just mining, though!
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o_e_l_e_o
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Scarcity can certainly increase the value of a good or service, though, provided there is already sufficient demand for said good or service. If there is more demand than supply, then prices will increase. Collectors of antiques, paintings, stamps, trading cards, and so forth, rely on scarcity to make the good more valuable over time. Big companies utilize the scarcity principle all the time to drive up their prices by limiting production to only x number of units. You see it on sites like Amazon and Booking.com when they add in "Only 1 more in stock" or "Only 1 room remaining" underneath certain listings. The underlying principle is there needs to be more demand than supply. If there is no demand, then the supply is irrelevant. I could do a painting right now which would be utterly unique. Only one in the world. But it would be worthless because there is no demand.
Scarcity can increase the price if there is sufficient demand, but scarcity alone does not confer value.
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coolcoinz
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July 21, 2019, 01:31:07 PM |
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^
Well explained. Scarcity of course is not the only thing that we have to take into account when valuing things. Rare metals are a good example of this.
Compare Ruthenium and Iridium. The first one is more rare but it's also worth much less with Iridium being priced at 1,460.00 USD/ozt and Ruthenium only 250 USD.
Something that people find use for will always be in greater demand than a useless rare object.
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TimeBits (OP)
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July 21, 2019, 01:52:48 PM
Last edit: July 21, 2019, 02:06:15 PM by TimeBits |
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Yah someone said to me in a forum post a few days ago, I forget who it was, that scarcity = value and if that was the case. The chart would look much different on con market crap (for all the coins above bitcoin I show would be worth more than bitcoin). USD would actually be the cheapest currency if that was true.
But I agree, Supply and Demand can alter prices, and scarcity does play a role there, I am a farmer I know all about markets, been going to real markets since I was 2.
So lack of supply and large demand = value going up.
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hugeblack
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July 21, 2019, 04:03:21 PM |
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We can not make this statement in general, but whenever there are usefulness and use of something, scarcity does its job.
Some people tend to buy rare things because others will not be able to get them and therefore give them value even if they are not equal that like "A cat with blue hair" (would not be valuable if there were too many cats with that color.)
With regard to the market capacity, this indicator gives misleading and incorrect results, so it can not be relied upon in the discussion because it represents the price multiplier in the market capacity which can be infinite.
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Ucy
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July 21, 2019, 07:34:08 PM |
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Scarcity simply increases the price of something that is valuable.
If something is not valuable, no amount of scarcity would increase its price.
So something needs to be scarce and valued by people for price to go up
Dollar/fiat is valuable but not that scarce because of the constant printing and control of its supply.
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Oilacris
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July 21, 2019, 07:56:42 PM |
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Scarcity can certainly increase the value of a good or service, though, provided there is already sufficient demand for said good or service. If there is more demand than supply, then prices will increase. Collectors of antiques, paintings, stamps, trading cards, and so forth, rely on scarcity to make the good more valuable over time. Big companies utilize the scarcity principle all the time to drive up their prices by limiting production to only x number of units. You see it on sites like Amazon and Booking.com when they add in "Only 1 more in stock" or "Only 1 room remaining" underneath certain listings. The underlying principle is there needs to be more demand than supply. If there is no demand, then the supply is irrelevant. I could do a painting right now which would be utterly unique. Only one in the world. But it would be worthless because there is no demand.
Scarcity can increase the price if there is sufficient demand, but scarcity alone does not confer value.
Right! Value would always vary on the demand of such thing and being rare doesnt automatically considered to be valuable but somehow on most cases it would be but depending into its usage if you are holding or storing something which is usable then it would be valuable if not then keeping it would just be useless. |
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o_e_l_e_o
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July 21, 2019, 08:14:43 PM |
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USD would actually be the cheapest currency if that was true. The purchasing power of the dollar has fallen by >95% in the last hundred years. We might not have to wait much longer for your statement to be true.  So lack of supply and large demand = value going up. The next logical question, then, has to be "At what point will this affect bitcoin in a significant way?" At 7 billion people in the world, that's 0.003 bitcoin per person max, if bitcoin was to become a global currency. The number of people in the world continues to increase rapidly, while the max number of bitcoin is fixed. We don't know how many bitcoin users there are at the moment, but with some studies suggesting >18 million (the number of bitcoin currently in circulation), then it seems we are already in the range of 1 bitcoin per person (without even considering all the coins which have been "lost" and all the people with significantly more than 1 bitcoin each). Could this lead to FOMO on a grander scale i.e. not just people scared about missing an ongoing bull run, but people scared about missing out on the technology/future of money altogether? |
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abeecrypto
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Like someone have said, only Scarcity is not equal to value. It has to work with demand. To simply put it, If there are just 10 apples (scarce apple) available in the market, and no one wants it, that wouldn't move the price of the apple any bit. But if more people begin to demand for it, the price of each apple will begin to hike up.
Price or value is always as a result forces between demand and supply.
So when there is high demand but less supply, Value increases. And when there is low demand but high supply, value will reduce.
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bitsurfer2014
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July 21, 2019, 11:38:32 PM |
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Like someone have said, only Scarcity is not equal to value. It has to work with demand. To simply put it, If there are just 10 apples (scarce apple) available in the market, and no one wants it, that wouldn't move the price of the apple any bit. But if more people begin to demand for it, the price of each apple will begin to hike up.
Price or value is always as a result forces between demand and supply.
So when there is high demand but less supply, Value increases. And when there is low demand but high supply, value will reduce.
Correct! I think you are expounding a popular and proven law in economics which is called "the law of supply and demand" and it also applies to most things including cryptocurrencies. So I think yes, scarcity is correlated to the value of a thing on the condition that there is demand to it. |
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CryptoBry
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July 22, 2019, 02:34:35 AM |
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In my point of view, scarcity in itself is not enough to make something very valuable. There are many things which are scare but have no value at all because their use and demand had not been established. Usually, scarcity comes into play and can make something very valuable if there are people (especially a big number of people) who got the desire to own that something. In the past, there are many things that were valuable but those got no value today...and of course vice versa. As to Bitcoin, it is a confluence of scarcity and demand and in case the demand for this cryptocurrency will wither then its value no matter how scarce it is will also plummet.
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odolvlobo
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July 22, 2019, 03:26:41 AM
Last edit: July 22, 2019, 03:43:54 AM by odolvlobo |
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Scarcity is a concept in Economics that basically means "limited availability". It is not the same as "rarity".
People consider gold to be scarce because most of it has been already been mined and the rest is very expensive to mine, not because there are only about 500000000000000000000000000000000 atoms of gold.
Scarcity does not give something value. Air is not scarce, but it has a very high value.
In terms of supply and demand, "scarce" means that the supply curve approaches vertical at some quantity. In the case of Bitcoin, the supply curve is vertical at 21 million.
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davis196
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July 22, 2019, 06:14:33 AM |
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You should read the books of Karl Marx,David Ricardo,Alfred Marshall and all the classic economists,instead of asking questions that can be considered stupid.
Nobody is saying the the whole foundation of value is the rarity.The foundations of value are the costs of production(labor+other resources),utility and in the end comes rarity.
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jseverson
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July 22, 2019, 06:38:52 AM |
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I don`t think it was gmaxwell, that said this, I was just reading his old post when I took the screen shot, It was someone else I can`t remember who it was, But this proves them wrong.
Unless they specifically said that scarcity is the only determining factor in giving something value, then they're not wrong. Heck, if we dive into semantics, something is only considered scarce when its supply is inadequate for the demand for it, making scarce items inherently valuable. You could therefore infer that scarcity does in fact = value. Your beef seems to be rooted on why there is demand on specific items in the first place, but that's a different issue. |
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SquallLeonhart
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July 22, 2019, 05:36:44 PM |
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It is a factor in a coins price of course but you can't just make it the only one. I mean if there is only 100 of a coin it doesn't automatically becomes more expensive. It could still worth 1 satoshi because it is a horrible coin. However if you make a coin that is low in supply plus actually build a coin that helps with the price as well.
Price and market cap are quite different things too by the way, the market cap could get affected while price wouldn't or price may get affected when market cap doesn't. There are billions of stuff going into a coins price and how we see it, scarcity is just one of those things and probably not even in top 5 of what we value in a coin, doge has insane amount of supply and we still like it, so what makes a coin higher has very little to do with scarcity.
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