Intrinsic value of Bitcoin and Gold

[tinopener]

Just thinking of talking points to debunk the "Bitcoin has no intrinsic value" narrative.

So here is one train of thought...

-The intrinsic value of gold is much less than its speculative value.
-The electronics value is about 10% of its value.
-The jewelry value is only so much because gold is in itself overvalued.

Therefore you could say that - if nothing else - the intrinsic value of Bitcoin is that it is a portable alternative to the non-intrinsic value of gold.

 

[xcaret]

yeah , but if gold collapses ,you still have something in your hand.
Better than a seed of 24 words and a Ledger nano S .

But I too am holding BTC, waiting for the price to go up.

 I have a few 1oz. gold coins too, but I don't expect their price to sky rocket .
I bought then in 2016 and the price has risen about $800 per ounce .
Pretty good compared to the stock market , but BTC leaves gold in the dust .

[mk4]

yeah , but if gold collapses ,you still have something in your hand.
Better than a seed of 24 words and a Ledger nano S .

Why does it matter that "you still have something in your hand"? If it does collapse for whatever reason, you might as well just have a typical rock. It's not like gold is going to be more useful just because it's shinier.

[Poker Player]

Just thinking of talking points to debunk the "Bitcoin has no intrinsic value" narrative.

So here is one train of thought...

-The intrinsic value of gold is much less than its speculative value.
-The electronics value is about 10% of its value.
-The jewelry value is only so much because gold is in itself overvalued.

Therefore you could say that - if nothing else - the intrinsic value of Bitcoin is that it is a portable alternative to the non-intrinsic value of gold.

 

Yeah, that sentence "Bitcoin has no intrinsic value" is tipically said by haters and nocoiners. It is a rationalization that tries to justify why they could have shared at $1, $10, $100 etc. and did not. Gold and other precious metal lovers must be especially concerned, because they are the ones who are particularly threatened. The intrinsic value of Bitcoin lies in the fact that you can easily cross borders with $ 1 billion and similar amounts, or send them in a few minutes to the other side of the planet, while with gold this is impossible.

[DannyHamilton]

yeah , but if gold collapses ,you still have something in your hand.
Better than a seed of 24 words and a Ledger nano S.

Better how?  Can't eat it. Can't drink it. Can't breathe it. Sitting in my hand (and capable of no current "gold purpose") it provides exactly ZERO value to me.

But I too am holding BTC, waiting for the price to go up.

And while you are waiting... Perhaps consider spending some of it.  Actively search out businesses that accept it as payment and reward those business with your purchase instead of their competitors.  You can purchase replacement bitcoin for what you've spent so that you don't miss out on future growth.

I have a few 1oz. gold coins too, but I don't expect their price to sky rocket.

I suppose that depends on what currency you compare it to.

If you live in Venezuela, then on Nov. 11, 2019 you could buy 1 ounce of gold for about
37,398,290 Bolivar

Exactly a year later, you could sell it for about
997,333,600 Bolivar

That's a 250% increase in gold value relative to the Bolivar in just one year!

I bought then in 2016 and the price has risen about $800 per ounce .
Pretty good compared to the stock market , but BTC leaves gold in the dust .

Sure, but Bitcoin dropped from $19,600 on December 17, 2017 to only $3,125 less than a year later on December 15, 2018 That's a value of only 15.9% of the high.
Gold did NOT drop to a price that was only 15.9% of its value over that same time period.  On December 15, 2018 it had only dropped to 98% of its December 17, 2017 value (from $1260.60 per ounce to $1235.35).  If you needed to access that money in December of 2018, which one would have preferred to have purchased in 2016? The gold, or the Bitcoin?  You're just fortunate that you were able to hold out until Bitcoin exchange rate recovered.

[tinopener]

Why does it matter that "you still have something in your hand"? If it does collapse for whatever reason, you might as well just have a typical rock. It's not like gold is going to be more useful just because it's shinier.

Indeed. Bitcoin has intrinsic technological value in its ability to digitize shininess.

[BlackHatCoiner]

Why should everything have intrinsic value? Why does it have to be useful by itself? Bitcoin can't be useful by itself! It's the harmony of its users that makes it valuable. It's the privacy that provides, it's the freedom. It is useful for the people, not because it's a ledger with transactions. The fact that it's censorship resistant, that no one can re-write the transactions, that everyone agrees upon it. This is value.

Gold has an intrinsic value and I agree that bitcoin doesn't. Bitcoin is valuable, because of the agreement of its users.

Indeed. Bitcoin has intrinsic technological value in its ability to digitize shininess.

If all bitcoins of the world, suddenly disappeared, would anyone noticed it except from those that use it?

[Reid]

That had always been the debate with me and my wife who really loves gold. 
When you are exposed to the internet it's easy to say everything should have value now even without a physical attribute.
"Internet" "data" you could not see it or touch it but now it's difficult to live without it.

Will the world still revolve without gold? Yeah.
The same goes with Bitcoin. The usage and demand are what will keep it going.
But we don't know what the future brings. Maybe someday it will just become history and a better one will float.

[Kakmakr]

Are we back to the whole "Intrinsic value" value thing again. Every time the Bitcoin price goes through the roof.... the fiat slaves wants to debunk Bitcoin, based on it's intrinsic value. I think those people are just butthurt that they did not invest money into it and now wants to air their jealousy by talking shit about Bitcoin.

Yes, you cannot touch it.... and you cannot use it in motherboard circuits... but do we care about that when we can send "value" all over the world in a matter of minutes? (at a fraction of the fees, charged by other payment networks)

We can also bypass the middleman and pay for goods and services ...pseudo anonymously, if you really wanted to. (No government oversight and tracking) Why should every f#$% transaction be transparent to every Tom Dick 'n Harry.... (Marketing firms / Government agencies / Financial institutions / Large global firms)  

[Wind_FURY]

Therefore you could say that - if nothing else - the intrinsic value of Bitcoin is that it is a portable alternative to the non-intrinsic value of gold.

Newbies need to understand that Bitcoin’s main value-proposition is censorship-resistance, which is only achievable through decentralization. I also believe only a few old Bitcoiners understand this, or tried to care to understand. Reading many of the posts, I know that many of us plebs should give some effort to educate themselves.

[hd49728]

Intrinsic value is made up of production cost (mining gold or bitcoin), maintenance cost (rigs, equipments, infrastructures) and belief of the people. One bitcoin is one bitcoin and one gold bar is one gold bar but price changes from investor belief, from fiat inflation or hyper inflation, from social economic status.

The intrinsic value changes with weather condition, seasons. In the time with available cheap renewable power resources, production cost of bitcoin can be cheaper with same difficulty on the network. Oppositely, you will need higher production cost but do you see the BTC price has a one way positive relation with power costs. I don't see it.

Bitcoin is a mean of storage and a speculating asset.

[Fundamentals Of]

yeah , but if gold collapses ,you still have something in your hand.
Better than a seed of 24 words and a Ledger nano S .

Why does it matter that "you still have something in your hand"? If it does collapse for whatever reason, you might as well just have a typical rock. It's not like gold is going to be more useful just because it's shinier.

And that is indeed the reason why gold became something in the eyes of humanity. Its being shiny remains forever. It does not corrode. It is beautiful, although I think its beauty is partially due to the fact that it is somewhat scarce. Not to mention its malleability and ductility which makes it precious even in technologies. But if it collapses then everything will be gone as well. No better than a 24-word seed and a Ledger Nano S.

[Flor1982]

Although Bitcoin might achieve more value in the short run, it is guaranteed to be worthless someday. Maybe not today, maybe not tomorrow, and may not for centuries, but eventually, it will be worthless, and we can’t predict when that will be. Gold will continue to have value unless something very unexpected happens.

[davis196]

The intrinsic value of gold is the mining costs.The intrinsic value of Bitcoin is the same-mining costs.
Gold is being mined in actual mines under the mountains.Bitcoin is being virtually mined by solving complex mathematical tasks.The process is called mining,but in the first case it's real mining,and in the other case is digital "mining".

Therefore you could say that - if nothing else - the intrinsic value of Bitcoin is that it is a portable alternative to the non-intrinsic value of gold.

This sounds like nonsense to me.Let's just not compare the value of Bitcoin and gold.
Let's compare Bitcoin only to all the other crypto coins and let's compare gold only to the precious metals.
Just like I've said it before.Comparing Bitcoin and gold is like comparing apples and bananas.

[tinopener]

Newbies need to understand that Bitcoin’s main value-proposition is censorship-resistance.

Agreed. I see the main intrinsic value of Bitcoin as an insurance policy against these sort of threats.

The insurance policy concept it a good one to throw back at the skeptics who equate intrinsic value with physical presence.

[tinopener]

The intrinsic value of gold is the mining costs.The intrinsic value of Bitcoin is the same-mining costs.
Gold is being mined in actual mines under the mountains.Bitcoin is being virtually mined by solving complex mathematical tasks.The process is called mining,but in the first case it's real mining,and in the other case is digital "mining".

Therefore you could say that - if nothing else - the intrinsic value of Bitcoin is that it is a portable alternative to the non-intrinsic value of gold.

This sounds like nonsense to me.Let's just not compare the value of Bitcoin and gold.
Let's compare Bitcoin only to all the other crypto coins and let's compare gold only to the precious metals.
Just like I've said it before.Comparing Bitcoin and gold is like comparing apples and bananas.

I did add the caveat "if nothing else".

This was meant to be more of a philosophical discussion about the nature of intrinsic value rather than a direct comparison of Bitcoin and gold.

[DapanasFruit]

I understand that there will always be a debate whether Bitcoin has an intrinsic value inherent in itself especially in comparison with the real physical gold. Actually, I don't approve that gold and Bitcoin has to be compared side by side. They have different uses and both have different advantages and disadvantages as well. On the other hand, there is also no need to belittle gold as it is one of the most known precious metals and no matter what I think it will never cease to exist in the market unless of course the end of humanity is soon to come and in which case Bitcoin can also be gone.

[hatshepsut93]

Just thinking of talking points to debunk the "Bitcoin has no intrinsic value" narrative.

And you still didn't debunk it. You just pointed out that a large part of gold's value comes from the "store of value" use case rather than its use as a material. And with Bitcoin it's 100% the value coming from the "money" use case, there's literally nothing else you can do it.

Having no intrinsic value is not the same as having no value at all, so there's no reason to make some mental gymnastics to prove that Bitcoin has intrinsic value.

[tinopener]

Just thinking of talking points to debunk the "Bitcoin has no intrinsic value" narrative.

And you still didn't debunk it. You just pointed out that a large part of gold's value comes from the "store of value" use case rather than its use as a material. And with Bitcoin it's 100% the value coming from the "money" use case, there's literally nothing else you can do it.

Having no intrinsic value is not the same as having no value at all, so there's no reason to make some mental gymnastics to prove that Bitcoin has intrinsic value.

Are you saying there's no intrinsic value in mental gymnastics?

I disagree.

[zanezane]

yeah , but if gold collapses ,you still have something in your hand.
Better than a seed of 24 words and a Ledger nano S .

But I too am holding BTC, waiting for the price to go up.

 I have a few 1oz. gold coins too, but I don't expect their price to sky rocket .
I bought then in 2016 and the price has risen about $800 per ounce .
Pretty good compared to the stock market , but BTC leaves gold in the dust .

Only way that gold will collapse is if the people behind the scenes would let it go down, they know that when that happens, the economy will be on the verge of collapse and it will take more than a Great Depression before gold could ever be useless back then it was the most valuable item and if that ever happens again and the collapse destroys the Gold Wall that protects the economies in the brink of collapse then a real chaos will happen. I do agree, bitcoin is better than gold but we can't underestimate the power of those shiny bars, they can destroy nations.