Love bitcoin, got my own keys, learned how to program it, and see the usefulness for humanity.
But I have a problem with the apparent lack of intrinsic value of bitcoin. This is the only advantage gold seems to have over bitcoin.I heard some people saying that the network has a value by the service it provides, so that it somehow gives a value to bitcoin.The service provided by the network is the transfer and conservation of a store of value, but for the network to have a value, bitcoin needs to have a value.Otherwise the network value would be a collective illusion.
Michael Saylor is speaking about the big bang of digital energy. But what can you build with that energy?With steel, you can build skyscrapers, but what can you build with bitcoin?
Hopefully someone has already answered those questions and you would be able to point me in the right direction.
All value is subjective. Nothing has intrinsic value.
Money is a tool with certain properties. Monetary properties include: scarce, portable, durable, divisible, and fungible.
Bitcoin objectively has the best monetary properties, and it needs nothing more than that. Hence it's now a $500B asset in the middle of global adoption.
The price of god is capped at the bottom by the use we have for it. What is capping the price of bitcoin at the bottom? It is not as clear that there is a value apart a conceptual one, the perfect monetary properties (maybe it is enough, I am just unsure).
If gold had been a boring gray metal with no practical use but perfect monetary properties, I am not sure people would have used it as money.
When people ask why bitcoin (the unit) has no intrinsic value, they must try to understand that Bitcoin (the network) is a network (like the internet), but of value exchange instead of other information, that uses bitcoin (medium of exchange) like a unit measurement for value. Imagine if the internet had a maximum amount of data that could be sent around (21 million terabytes for a simple example). Because it is so necessary for humans to use the internet, that space (each terabyte) would be very valuable. Now imagine you can own rights to some of that space, to trade for physical goods and services. That’s what bitcoin is. It’s using the Bitcoin network (internet of value). Bitcoin is the largest global decentralized, secure network to exchange value between people. The internet the largest global decentralized, secure network to exchange information value between people.
Bitcoin is often best analyzed within a monetary value framework rather than an intrinsic value framework.
Intrinsic value refers to the inherent value of an asset, which is based on its underlying properties, characteristics, and uses. For example, the intrinsic value of gold can be derived from its rarity, durability, and usefulness in jewelry and industrial applications.
Bitcoin, on the other hand, does not have any intrinsic value in the traditional sense. It is a purely digital asset that derives its value from a combination of supply and demand factors, including its limited supply, its decentralization and security features, and its growing acceptance as a legitimate asset class.
As a result, Bitcoin is often best analyzed within a monetary value framework, which focuses on the relative value of different currencies and assets in terms of their ability to function as a medium of exchange, a store of value, and a unit of account. Within this framework, Bitcoin can be compared to other currencies, commodities, and assets based on its ability to fulfill these functions, as well as on its relative scarcity and liquidity.
Overall, while Bitcoin may not have any intrinsic value in the traditional sense, it can still be analyzed and valued within a monetary value framework that takes into account its unique properties and uses as a digital currency and asset class.
Love bitcoin, got my own keys, learned how to program it, and see the usefulness for humanity.
But I have a problem with the apparent lack of intrinsic value of bitcoin. This is the only advantage gold seems to have over bitcoin.I heard some people saying that the network has a value by the service it provides, so that it somehow gives a value to bitcoin.The service provided by the network is the transfer and conservation of a store of value, but for the network to have a value, bitcoin needs to have a value.Otherwise the network value would be a collective illusion.
Michael Saylor is speaking about the big bang of digital energy. But what can you build with that energy?With steel, you can build skyscrapers, but what can you build with bitcoin?
Hopefully someone has already answered those questions and you would be able to point me in the right direction.
All value is subjective. Nothing has intrinsic value.
Money is a tool with certain properties. Monetary properties include: scarce, portable, durable, divisible, and fungible.
Bitcoin objectively has the best monetary properties, and it needs nothing more than that. Hence it's now a $500B asset in the middle of global adoption.
The price of god is capped at the bottom by the use we have for it. What is capping the price of bitcoin at the bottom? It is not as clear that there is a value apart a conceptual one, the perfect monetary properties (maybe it is enough, I am just unsure).
If gold had been a boring gray metal with no practical use but perfect monetary properties, I am not sure people would have used it as money.
This very topic was discussed almost 13 years ago. The price of Bitcoin was less than $10 then, and so far adoption is trending up.
https://satoshi.nakamotoinstitute.org/posts/bitcointalk/428/
Thanks, I knew this one, that is exactly why I was writing about a boring gray metal!
Actually I found a great explanation there:
https://keepreadin.medium.com/why-does-bitcoin-have-intrinsic-value-d2d98669e7b3
And it is:
When people ask why bitcoin (the unit) has no intrinsic value, they must try to understand that Bitcoin (the network) is a network (like the internet), but of value exchange instead of other information, that uses bitcoin (medium of exchange) like a unit measurement for value. Imagine if the internet had a maximum amount of data that could be sent around (21 million terabytes for a simple example). Because it is so necessary for humans to use the internet, that space (each terabyte) would be very valuable. Now imagine you can own rights to some of that space, to trade for physical goods and services. That’s what bitcoin is. It’s using the Bitcoin network (internet of value). Bitcoin is the largest global decentralized, secure network to exchange value between people. The internet the largest global decentralized, secure network to exchange information value between people.
Also ChatGPT gives an interesting explanation:
Bitcoin is often best analyzed within a monetary value framework rather than an intrinsic value framework.
Intrinsic value refers to the inherent value of an asset, which is based on its underlying properties, characteristics, and uses. For example, the intrinsic value of gold can be derived from its rarity, durability, and usefulness in jewelry and industrial applications.
Bitcoin, on the other hand, does not have any intrinsic value in the traditional sense. It is a purely digital asset that derives its value from a combination of supply and demand factors, including its limited supply, its decentralization and security features, and its growing acceptance as a legitimate asset class.
As a result, Bitcoin is often best analyzed within a monetary value framework, which focuses on the relative value of different currencies and assets in terms of their ability to function as a medium of exchange, a store of value, and a unit of account. Within this framework, Bitcoin can be compared to other currencies, commodities, and assets based on its ability to fulfill these functions, as well as on its relative scarcity and liquidity.
Overall, while Bitcoin may not have any intrinsic value in the traditional sense, it can still be analyzed and valued within a monetary value framework that takes into account its unique properties and uses as a digital currency and asset class.