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Intrinsic value (in the context of finance) usually refers to the value of something when not used as investment or money. Gold has intrinsic value because you can use it for jewellery and electronics. A bitcoin has no intrinsic value because you only have it to get something else in return later.

Physical money has intrinsic value equal to the metal or paper it's made of. Of course that is not what makes physical money valuable and I am equally confused by that quote.




>> Physical money has intrinsic value equal to the metal or paper it's made of. Of course that is not what makes physical money valuable and I am equally confused by that quote.

USD/EUR/JPY currency (either physical as bank notes and coins, or electronic) has intrinsic value because it is almost universally accepted, taxable, and backed by debt that (at least in theory) will have to be repaid at some point in time. Bitcoin proponents like to point out that bitcoins are decentralized as if that's only an advantage of the currency, but it's the fact that commonly accepted currencies are centralized, controlled and regulated that makes them trustworthy enough that people keep accepting them in exchange for goods or labor. It's called 'fiat money' for a reason. Bitcoin has none of this, and the 'value' it derives from the 'trust' people buying them is based on nothing but speculation and hype. Anyone who thinks otherwise is fooling themselves.

Disclaimer: I'm not 'anti-bitcoin', 'anti-cryptocurrency', 'pro-government' or a big fan of fiat money and how central banks are handling it. I'm just stating my observation how the bitcoin hype and echo-chamber has made people almost blind to see the risk it will some day go to zero (maybe soon)


The value of money is grounded by the fact that you have to pay your taxes in it or you go to jail. This doesn't determine the absolute value or prices, but it stabilises them. This stability is the inductive step that allows the "base case" value derived from the gold standard to filter through to the present (minus inflationary effects).


If you consider those things to bestow "intrinsic value" (a fallacious concept), the Bitcoin has "intrinsic value" because it is portable, divisible, fungible, scarce, and has all the other properties we want from a scarcity-based currency while having all the great benefits (and more) of digital fiat money.


Bitcoin isn't portable (you can't carry it, try using it without the internet).

All regular currencies are fungible and its super-questionable that BTC is divisible (the network can't handle more then what, a million transactions per second? What's the use of a currency that splits into microscopic sizes if you can't make lots of micropayments with it).


This must be red herring day on HN.

USD may be the most ubiquitous currency on the planet. However, go visit a country like Japan. Once you're out of reach of any currency exchange, you won't have much luck using your USD. Ironically, you'll have better luck using a Visa/Mastercard (which, btw, are not used anywhere other than perhaps ATMs). Those credit cards require a network to be used.

I've been to Internet cafes in Japan. But I never bought a single thing with USD. I don't see Bitcoin having any issues here. Internet is more widely available than places that take whatever your paper currency is.

You can easily take Bitcoin with you. You take your credit card with you. Both require electronic communication to work. There is no difference here.


Once your out of the reach of any currency exchange, you won't be able to use Bitcoin either, what's your point?

The difference is, all national currencies have an offline only form which is good anywhere within that nation. Bitcoin does not.


Well said IMO. It's been a while since tulip mania and could bitcoin be a modern day version?

Same disclaimer as above.


The tulip mania is probably a myth.


Bitcoin has an intrinsic value

A distributed ledger with proof of ownership that makes it impossible to forge transactions

That my friends is a first in history, Greenspan and others have not realised yet the implications of this.


> A distributed ledger with proof of ownership that makes it impossible to forge transactions

All that means is that I can prove beyond any doubt that I own something that's worth nothing... :-)


Only if you don't think USD, JPY, GBP, and all the products and services you can buy with BTC are worth anything either.


The quote is bit out of context. He was asked if bitcoin could be the new gold.

http://www.bloomberg.com/video/greenspan-on-bitcoin-i-guess-...


Who would want to use a fiat currency that's printed with wild abandon, if they had the option of completely disregarding it and using say, a gold-backed currency instead?

>> Of course that is not what makes physical money valuable and I am equally confused by that quote.

Not going to jail is pretty valuable, and that's what governments "give us" in exchange for paying taxes in their fiat currency of choice. It's quite simple.


The intrinsic value of paper currency, I suppose comes from the promise of the central bank to pay its value on demand. In the 'good old days' this was a promise to pay its value in gold, but now its in the settlement of your debt. In Bitcoin that promise is peer-to-peer. Whether that makes it a successful currency is a fascinating, but open, question.


That's the value imparted on the paper currency, not its intrinsic value. Its intrinsic value is that of a piece of paper with interesting designs on it.


I thought it was pretty funny coming from grandfather sql queries.

The thing is, most of the money/credit that has ever been created (derivatives and such) makes the amount the physical money in circulation a joke in comparison. It's as if some bitcoin enthusiast decided to etch a bitcoin wallet onto gold (because that has "value" since jewellery and electronics have been deemed "valuable") and placed a fraction of a bitcoin on it compared to the total that have been mined so far.

It's also interesting that an ever so fluctuant of a social construct is used to justify existence of one thing over another thing. One would think existence alone would suffice, but I guess that is not what man seeks…


>A bitcoin has no intrinsic value because you only have it to get something else in return later.

The intrinsic value of Bitcoin is the payment network. That may not be a physical good, but it is a powerful idea.




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