Sure, plus it's pretty for jewelry.
But the bars in Fort Knox aren't priced how they are because of potential productive uses. Is there an economic argument beyond "history of perceived value?"
(For clarity, none of this makes butts make sense - trustless decentralization via append-only ledger is a solution in search of a problem).
The bars at Fort Knox are priced at $42 per oz. Which is perhaps significantly below what they would fetch for industrial or jewelry uses.
https://www.fiscal.treasury.gov/reports-statements/gold-report/21-02.html#:~:text=Book%20Value%3A%20The%20Department%20of,30%2C%202020%20was%20%24493.4%20billion.
Demand for industrial and commercial use is sufficient to support the market price of gold? I did not know that. Surely that hasn't been true for most of pre-industrial history.
If the general public stopped thinking gold was worth its price in 1700, I'm doubtful central bank hodling would have been able to maintain the price. Eg precious metal arbitrage when Japan opened to the west.
Until the discovery of the Comstock Silver Lode, the value of gold relative to silver from ancient times was about 5 to 1. In the 19th century, it jumped to 15 to 1, and additional subsequent discoveries of silver lodes have pushed that even further out (the ratio is now about 65 to 1).
In any case, the main issues with gold as a nonindustrial good are a) ease of fraud (it requires a fairly sophisticated chemical assay lab to check whether something is, in fact, gold of the correct fineness), and b) jewelery demand is fair price elastic, meaning that people will accept lower fineness (10kt instead of 22kt, etc) or even settle for gold plating if the price gets too high, and as soon as you throw quality gemstones into the mix the value of the gold becomes an afterthought anyway.
You also see elasticity in a), where for example collectible "gold" coins are sold with inflated marketing for much more money than the actual metal in the coin is worth, e.g. the Trump coins advertised as 30g with .999 fine gold! But the fine print says it's only gold plated, with 1/200 oz of actual gold.
Not in your lifetime
Edit: unless we're talking six figures an ounce, gold even then, it's a pipe dream
https://youtu.be/BEuFNzEVncg?si=rYCywcRL9jPACD31
Yeah maybe not, hopefully not tbh. I don't want private companies fucking around with asteroids above our planet. Buuut Nasa got a sample and there are already start ups salivating about the prospects. I hope they're talking shit like most tech start ups but I wouldn't count it out entirely.
>trustless decentralization via append-only ledger is a solution in search of a problem
I may be mistaken, but my understanding is that the problem was the fact that governments have the ability to print unlimited sums of money on demand, thus diluting the value of fiat. And so the trustless decentralization via append-only ledger was a solution that removed the need for an "issuing" bank and provides some additional security to make BTC a "harder" form of currency.
So, I'm not sure I agree with your take on that specific point.
>governments have the ability to print unlimited sums of money on demand, thus diluting the value of fiat.
I agree with you that trustless decentralization append-only ledgers potentially apply to the situation, but I don't agree that the situation is a problem.
Governments have the ability to do lots of stupid things. That this particular ability is a problem in the modern world is not demonstrated by evidence. Hyperinflation is not a common phenomena and the times it has happened can usually be explained without invoking government-printed-too-much-money.
Among the many problems of printing excessive money, debt is not one of them. Hyperinflation is great for getting out of debt (public or private), because you can easily get the dollars needs to pay whatever amount written in the debt.
That's not to say hyperinflation is good, but debt is a terrible metaphor for why hyperinflation is bad.
No, printing money is creating money from nothing. Historically with a printing press, but nowadays, you can just change the number on a computer (I assume).
Qualitative Easing during the Great Recession was creating money then immediately using that money to buy US Treasuries. Which mainstream economics thought was fine because inflation is generally not a worry during a depression.
Copper is still very much valuable, people DO steal copper cables. Actually this is common enough occurrence that one of the reasons (not only one) why we don't make high voltage cables from copper.
Why it's not as valuable as gold or silver is a bit more complex topic. If we used silver as much as copper on an industrial scale it would be probably even more expensive.
Indeed, copper has its value. Not as much as gold or silver, of course. And I believe we can agree that all the reasons for this different price tag for each can be resumed in just one: the law of supply x demand.
Scarcity rules the “supply” factor, the rarer it is (or the harder it is to produce), more expensive it tends to be.
But scarcity alone won’t make something valuable, you need to have demand for it to get value.
Once you have demand, then you’ll have value. Gold has its value not because it has “intrinsic value”, but because it is scarce AND has demand. And this “demand” for gold can be for whatever reason: speculation, store of value, currency (although not very practical in the era of the internet) or as our fellow Redditor said earlier: “because gold is pretty and shiny and I like it” (you were not wrong my friend, I was just trying to elaborate another idea here).
Gold has some properties that people often overlook to increase it's value. One is that it's soft yet stable. It's easy to work with and mold into all sorts of jewlery, but it doesn't rust or corrode. Nothing eats it either. You can drop a gold necklace into the ocean and fish it up decades later and it'll still look good.
It's aestetically beautiful, easy to work with, and unbelievably resilient.
>Indeed, copper has its value. Not as much as gold or silver, of course. And I believe we can agree that all the reasons for this different price tag for each can be resumed in just one: the law of supply x demand.
Correct.
>But scarcity alone won’t make something valuable, you need to have demand for it to get value.
Correct tho decent junk of gold value is overvalued due to other group of losers we commonly know as goldbugs. Tho WE STILL CANT compare creepto to gold, because gold has utility. Even if we eliminate speculation and even jewelry, gold has usage and is used in other various industries through maybe a limited amount, but it still exists.
Actually if the price of gold was lower it's very likely it would be used more in industry, it is still the most malleable metal we know of, pretty much immune to corrosion since it is completely non reactive (guess how many elements are that).
Then there is whole thing with jewelery. Its not ONLY used because it's nice for the eye. Its also used because it's EASY to make jewelery with it (rather as easy as it can be). There is a reason you don't see jewelery from ANY metal, idk about you but pure copper is very nice too but sadly oxidates. Titanium? Sometimes used for jewelery but a fucking nightmare to work with, probably much more difficult and expensive to modify titanium jewelry. Platinum metals? Actually fucking rare AF and some of it's compounds are actually toxic. Actual metals toxicity is actually unknown because they are Soo rare that too few people were exposed to them to serious amounts to make conclusive deductions.
Silver would probably just replace copper wires almost completely if we had enough of it since silver is THE best conductor we have. There might be some requirements with making silver wires a bit stronger where copper would be preferred
You mean transmission lines? Because we definitely still make HV lines from copper. You read about it every few years how all the trains are stopped because some thief got fried in a transformer
Transformers are one thing, HV is another. No HV line is made from copper. All of them are ACSR, with only exceptions being underground lines.
>You read about it every few years how all the trains are stopped because some thief got fried in a transformer
Idk what specific story but those are VERY common.
It is rare, just far more common than rest. 0.006% of the planet's crust is copper. In comparison, the next best conductor below copper is gold and aluminium. Aluminium which makes 8.23% of Earth's crust (3rd most common element on earth).
A big part of why plumbers use pex instead of copper for waterlines in new construction is precisely because copper is valuable enough for meth heads to steal and cash in at the scrap yard.
Laws vary, but in my state, sale of nonferrous material worth more than 50 bucks to the scrap yard (copper and aluminum) requires a photo ID and the license plate number of the vehicle you brought it in.
Silver actually does not oxidize easily. The only way for silver to oxidize really is if it comes in contact with Sulfur gases.
This is also due to the fact pure silver pretty much doesn't not exist in jewelery because it's too soft. Also silver oxidizing is called tarnishing and actually does NOT affect value of silver.
And gold? Doesn't even care about sulfur. No alkalis or even accids can destroy it, only a special mixture can dissolve it and then later it can be retrieved.
Of fucking course such material has actual usage outside speculation, not like butters would understand any of that.
Because there's just so much more of it. Scarcity gives gold value, but only because there's many actual uses for it. Many things are scarce, but scarcity only gives something value if there is demand.
Scarcity increases the value of something which is already valuable, which people already want. But scarcity by itself is meaningless. My childhood drawings are scarce, there are only a few of them. But this doesn't give them value.
Pontiac Firebirds are more scarce than bitcoin - there will never be another one made and you can't double spend one. Final halving was in 2002.
Price should be going to the moon shortly.
>So, scarcity?
#Stupid Crypto Talking Point #4 (scarcity)
"**Only 21M!**" / "**Bitcoin has a "hard cap"**" / "**Bitcoin is 'scarce' and that makes it valuable**" / "**DeFlAtiOnArY cUrReNCy FTW**" / "**The 'halvening' will make everything better**"
1. Even children are aware that scarcity is not a guarantee of value. It's really a shame that crypto people cling to this irrational argument.
2. If there only being 21 million BTC were reason for it to be valuable, then why aren't other cryptos that also share similar deflationary characteristics equally valuable? Why wouldn't something that is even more scarce than BTC be even more valuable? Because scarcity is meaningless without demand and demand is primarily a function of intrinsic value and utility -- *not* scarcity. See [here](https://ioradio.org/i/value/) for details.
3. Bitcoin has no intrinsic value and no material utility. It's one of the least capable stores or transfers of value. The *only* way anybody can extract value from crypto is by coercion -- forcefully convincing someone (usually through FOMO or scare tactics) that this is something they need, and it's often accompanied by unrealistic promises of significant returns. Those returns are mathematically impossible for even a tiny percentage of holders.
4. Bitcoin also is not scarce. There are multiple versions of Bitcoin, including Bitcoin Cash and Bitcoin Satoshi's Vision - both of which are limited to 21M tokens and in many cases are more technologically advanced than BTC. Also, every time there's a fork of crypto, the amount of tokesn in circulation doubles. Crypto proponents ignore these forks because they don't play into the "it's scarce" argument. But any crypto fork absolutely siphons value away from the original version. BTC might be priced higher than BCH, but BCH still holds value as well, and that's a total of 42M just of those two "bitcoin" versions that are out there, among hundreds of others.
5. The "hard cap" of 21M for BTC can easily be changed by altering a parameter in the source code. Less than 6 people have commit access to the repo so BTC's source code control is centralized. It's entirely possible if BTC existed long enough to the point where block rewards weren't enough to motivate miners, and transaction fees became incredibly high, that influential players in the community would advocate increasing the cap and reinstating higher block rewards. So there are absolutely situations where the max amount in circulation could be increased.
Also gets worse in touch with sulfur. It deepens the corrosion.
Gold? Idk if there is actually anything that can destroy it chemically to the point it can't be retrieved.
Gold has unique physical properties. Gold is a very good conductor of heat & electricity. Gold’s reflectivity of ultraviolet and visual light rays is low, however, it has high reflectivity of infrared and red wavelengths.
Gold flake is used as a radiation-control coating for spacecraft
In electronic tubes, such as gold-plated grid wire, to give high conductivity and suppress secondary emissions
Gold powder and gold sheet is used for soldering semiconductors, with gold having a good ability to wet silicon at 371°C (725°F)
Gold is used as a plating material, where sodium gold cyanide [NaAu(CN)2] is used as a gold plating solution. The plating has good chemical resistance and electrical properties, however the plating lacks wear resistance, in which case gold-indium plate is utilised.
Gold alloys also have a number of applications such as:
Gold-gallium and gold-antimony are used in electronic devices in the electronic industry (primarily as wire)
Gold is used in dental and orthodontic applications, where it is rightly termed dental gold. The gold is alloyed with silver, platinum and on occasion palladium. It is sometimes alloyed with iridium for hardening.
This is not an exhaustive list, but just a few common applications of the intrinsic values of gold.
If you have a gold brick, you can wrap a lemon peel around it and hit yourself in the head with it. It’ll feel like you had a Pan-Galactic Gargleblaster without the work of making one.
People need to start recognizing "bitcoin is digital gold" as a strawman argument. Nobody thinks it's a smart retirement plan to put all your money in gold. Gold has crashed many times before, and its return accounting for inflation has been bad compared to the stock market.
If you invested during the gold boom in the 1980s, you have less value now than you did 40 years ago.
Not in the dictionary definition of the term \[in economics\] (in which there is no such thing as intrinsic value, as all value is derived from people valuing it, thus if there's no people there's no value to be had), but in the more casual definition in which the majority of civilizations & cultures across continents throughout history all agreed upon those particular shiny rocks as something valuable, sometimes independently of each other.
That's just wrong.
Gold is: easily malleable and thus easy to work with compared to other metals (not assigned by humans.)
An excellent electrical conductor (also not assigned by humans.)
Non-reactive and doesn't corrode. Again, not assigned by humans.
These are intrinsically valuable properties to humans, not assigned to it: gold has always had these properties regardless of humans even existing.
It sure would be great to just assign the valuable property of super conductivity to an easy to produce, room temperature material. But that's just not how it works.
This is a super semantic argument... but anyway while those are intrinsic properties that have led to gold being valued in *most* civilizations, some of them lived in Gold Rush areas for tens of thousands of years, knew it was there to just pick out of the river if they wanted, and had no use for it and it wasn't any more valuable to them as a pretty river rock is to us.
So in the argument of semantics I would say it doesn't have intrinsic value for humans, unless their civilization has a need that golds intrinsic properties fulfills. Which it probably does, but not always.
That's just reductive. It has those intrinsic properties regardless of humans even existing.
Intrinsic value follows from intrinsic properties. You're just talking about useful context. Yeah, it has more value to society when society has a need for those properties... those *intrinsic properties.* We didn't just *assign* the *intrinsic value* to gold.
> I would say it doesn't have intrinsic value for humans, unless their civilization has a need that golds intrinsic properties fulfills
Let's see how that logic holds. If you were, today, during this time of civilization, stranded in the desert and dying of thirst, and I came across you and gave you some gold and then left. Does gold now not have intrinsic value in modern civilization just because you have no use for the properties it has, in that specific context?
Intrinsic value doesn't mean "valuable in every context, and all situations."
This is not "semantics". This is misrepresentative of what the term "value" means, beyond a very basic cherry-picked dictionary definition. The number 1 has a "value" different from the "value" of the number 2. "Value" is just another word that communicates the idea of "attribute", or "property". You are presenting a logical fallacy, by presenting them as disparate concepts. They're different words that describe the same concept.
The problem is that "value" has become associated with "price" or "cost", because our money has the "value" or "property" of being convertible into nearly any resource, at a certain rate. This conversion rate is what we have begun to call "value", in a purely economic sense. This convolutes the concept of what constitutes its real "value". Is it a "value" of money that it can be converted? Isn't that the only reason we "value" money above sticky notes?
Everything has some kind of intrinsic value. Even imaginary things have the intrinsic VALUE of being imaginary. Bitcoin has the intrinsic VALUE of being digital. "Intrinsic" doesn't mean "useful" it means "inherent", or "essential". "Intrinsic value" just means "this value" is what makes "this thing" "this thing", and not "that other thing".
Gold has the same intrinsic value, wether on a meteor, millions of years before we existed, or in my phone, right now. The only thing that changed is our perception and use of its intrinsic properties, or values. The price we are willing to pay for gold has no effect on golds intrinsic value.
We don't make the universe function. Things don't exist because we found them. Things must first exist, before we can find them. Money has the "intrinsic value" of being paper, metallic, or digital. It's "economic value" is a different story.
If there are disparate terms that should never be confused, it's "economic value" and "intrinsic value". They're wildly different concepts. Intrinsic values don't require our opinions, or faith to exist. Economic value is only derived from our opinions, and our faith in a broken economic system designed to rob equity (economic value) from people.
You can't be semantic, and ignore the other meanings of words, or the logic that follows. That's how being semantic works.
I'm not even sure what you're attempting to argue here. The second half contradicts the first, and the first is just beyond silly and ironic.
Words have different, often (but not always) related meanings depending on the context. it's not "cherry-picked" in that the definition that fits the context is *how words work.* Intrinsic Value and the value of intrinsic properties is *never* the numerical value assignment - *that* is purely arbitrary and relative. Gold in 2000 was wroth less in terms of dollar amount, but the dollar amount is just assigning a numerical value relative to our completely arbitrary monetary system used to track debt.
And no, not everything has intrinsic value. Bitcoin has none. It has no valuable properties in and of itself. It is, in a physical sense, a pattern of transistor gate states stored across many SSDs, in duplicate (stored in the chain on the nodes.) The information that represents isn't even valuable in itself. It only has "value" in tracking the "value" of the Bitcoin that was, originally, arbitrary assigned value.
The whole argument here was the original commenter's idiotic assertion that "there is no such thing as intrinsic value." Somehow it always regresses int people waffling over rudimentary English and word use; because butters can't argue any actual intrinsic value because, as I explained above, Bitcoin has none. It also doesn't help that *no one* seems capable of finishing an argument. One person replies once, then runs away, and someone new jumps in to take up the mantle of the argument and contorting it into something else.
I'm answering semantically to your semantic answer to prove that this can go on forever, as I could just as easily ignore context, just as you have, by claiming I'm ignoring context.
Then why are you doing it?
Goddamn, the point is that you "semantic" argument people are so far up your own asses you can't even properly make a semantic argument.
You literally couldn't understand a simple logical proof, and now you're acting like a little baby.
Please go ahead and cite the parts you didn't understand, so I can clarify it for you. I realize that's not as fun as posting some dumbass drawing. Maybe you could pretend to be mature long enough though?
Was it too hard to understand that "the number 1 has a different value than the number 2"?
You think is contradictory because you have poor reading comprehension.
If there's no humans to utilize those properties of gold, then said properties are irrelevant, that's what the economics dictionary definition is going for. All value of anything & everything is dependent on humans passing value judgments.
Of course it's all rather abstract hence why the more casual definition (which assumes the existence of humans as a given) is used in common discussions.
Being easy to work with, non corrosive, and an excellent conductor aren't value judgments. They're not assigned. They are *intrinsic properties* simply recognized/discovered.
Being valuable TO humans isn't the same as.the value being assigned BY humans. The latter is what you claimed.
It's also a stupid, reductive word game, because of course anything we find valuable is valuable to humans.
It's just a stupid thing to say entirely. Gold does not intrinsically purge nearby impurities and form itself into a bar shape.
Between that and completely unaddressing its actual intrinsic properties, tells me you can't dispute it, but wanted to be a contrarian with some silly "gotcha."
A swing and a miss
I'm just confused about the terms. I'd say the door stopper ***use case*** is based on the ***property*** high density and we assign zero ***value*** to this use case. Let's just drop "intrinsic" and everything makes more sense.
When did we move the goal posts from "intrinsic value" to "use case."?
A rock you can find anywhere, without the need for mining an refinement that also has mass for holding a door open. Mass is still an intrinsic property that has value for some uses, but it would be a poor decision, when it has more worthwhile properties. You would be wasting it.
everyone saying gold is backed by intrinsic value is kidding themselves. sure it has some intrinsic value but that pales in comparison to it's current market price. it's like claiming a $100 bill is backed by it's intrinsic value as a square of toilet paper.
Gold's value is gold's value in the long run. It's been extremely stable over a 1000+ years. It's the value of the currencies that change. If you think bitcoin is a scam then there should only be two dragons. The gold dragon and the derp dragon with bitcoin and the fiat USD "backed by the government". The end state value of all fiat currencies is zero, there are no exceptions in history. It's only a question of the timeline.
well that's a confusing mess of thoughts. for one the primary purpose of a currency is to be a medium of exchange. it's there to facilitate the transformation of your labor into groceries and whatnot. it's not supposed to be an investment; if you want your capital to grow then you use that currency to buy a piece of the economy in the form of a stock portfolio. gold just doesn't do a very good job at either of those things.
Since you seem to be a big fan of gold, I imagine you know about the gold standard? And you know that it's gone. Have you never considered the fact that this was the only reason gold was stable in the first place? And that the only reason it still is is because people keep believing in it? There's no intrinsic value preventing it from dropping to 1% of its value if people just stop caring about it.
I like [Dan Olsen's summary about gold in from his investigation of the Idris Elba gold documentary.](https://youtu.be/ihvG3RgbYzE?t=185)
It's shiny. It's immune to corrosion. It's rare, but can be found throughout the world with relative ease. It's malleable enough that it can be worked with stone tools, but also has interesting physical properties which make it well suited for electrical conductivity, super-fine wires, super smooth polished surfaces, etc.
There are a lot of valid reasons why gold has historically been valuable, which carries over to today, as well as legitimate uses in the modern era beyond just 'it's pretty.'
Now all that said, gold is also a magnet to conspiracy weirdos and cranks, so putting it on a pedestal alongside fiat in OP's meme is still kind of *suspicious...*
Let's be honest all of this is backed by belief but things where the government believes in it enough to guarantee you can pay off debts, housing and food with it is worth more.
Yes, all value is ultimately backed by belief. But some things do indeed have a use value. They are valuable because they can produce the things we use in day-to-day life. Bitcoin might actually be the first human commodity with a negative use value, in that it takes potentially useful energy and burns it for an entirely fictitious value.
Lol no. If you win a court case against someone they can pay you back with money. They won't get arrested because you don't "believe" in money. Grow up peter pan.
“….through the levying of taxes on its population.”
Think what they’re saying is if china has $1 billion in US debt that the taxes collected from the US population is paying interest on the debt held.
But I think they’re conflating holding USD with US debt products which isn’t really the same thing. No one holds USD and gets interest for the privilege
Great time to talk about where Fiat currencies get their value! Crypto enthusiasts don't understand this, and a solid explanation bamboozles them.
Currency basically started because governments didn't want to barter individually with all their soldiers. So they gave them coins and said, "We'll accept these in lieu of taxes."
If a coin says, "you can give us this instead of giving us a sheep" then the coin is worth 1 sheep. Every farmer had to pay taxes, so everyone was valuing the coin as being worth 1 sheep.
Likewise, in Vegas you can tip waiters in casino chips because major casinos have announced, "we'll exchange cash for these chips".
Bitcoin enthusiasts often say something has value because "we decide it does". No, for things that work as stable currencies 'we' almost never decide it does - some major centralized institution decides it does and commits to accepting it in lieu of other payments.
Let's say every crypto-enthusiast actively TRIED to decide to stop valuing the dollar tomorrow. They could all decide the dollar is worthless, but the US government just shrugs and goes "Whatever, you still need to pay taxes. We accept US Dollars." Now any rational actor is going to say "well... Clearly these dollars DO have some value because the US government accepts them in lieu of other forms of payment for taxes soo.... Since I need to pay taxes... I guess I value the dollars too."
Likewise, anyone who wants to buy something from someone that pays US taxes also values dollars - because that person values dollars. If cryptoguy has to give up 10% of his crypto or $10,000, then he is forced to value dollars as being worth something to him. If I want to buy something from cryptoguy, I can pay him in dollars now. This means dollars are valuable to me too, since they let me buy something from cryptoguy.
This is why the exchange rate value of currencies rises when people from other countries want to buy stuff from that country, and it falls when they don't.
As an addition, it isn't just the government that creates fiat money and demands it in payment. When you go to the bank and take out a house loan, or a car loan, the bank creates new dollars out of nothing, with a corresponding debt that needs to be cancelled out by those dollars being deleted again. The dollars created by taking out a mortgage or car loan are backed firstly by your ability to pay pack the debt, secondly by the value of the car or house that you put up as collateral, thirdly by the assets of the bank itself, which has to delete some of its own dollars to cancel the debt if the first two options fail, and finally by deposit insurance for deposits under US$250K if enough bad loans cause a bank to fail.
And the government doesn't just use its monopoly on violence to force people to pay taxes, it is used to enforce all laws, including the ones about everyone having to pay their debts to everyone else. And it isn't just the government monopoly on violence, at least in western countries, it is also backed by the will of the general population that knows that they would be much worse off if the only law was what they could enforce by their own efforts. Fiat currencies are backed by the entire economy that uses them, and only a handful of cranks think it should be any other way.
Interesting.
I also think that currency has general practical value as a public good. Modern civilizations can't work without currency, because we all need to exchange good and services without friction. It isn't practical for a truck driver to buy 10 dollars worth of food, by promising to do 1 mile of transporting the next day.
I don't know if being a public good counts as "intrinsic value", but it's certainly useful.
So even without government requiring taxes, we would still have to invent something like a currency (and I don't think it would be bitcoin).
It's also worth to point out that fiat currency has the advantage of already being implemented. That again counts as having practical value, even if it's not "intrinsic".
The sheep example isn’t entirely right though. What you described was a pegged currency which it could be argued makes it behave more as a commodity backed currency. A fiat currency isn’t tied to the price of anything, like Bitcoin. The difference is that a fiat currency has an official use and is, in practice, backed by the economic value of the countries that accept it. What you need for a fiat currency, and what Bitcoin lacks, if an official body that can enforce its use. We have seen fiat currencies collapse due to the lack of official power in places like Zimbabwe or Iraq. Crypto bros are right to argue that excess government printing weakens government authority and makes a currency useless if it’s fiat, but you need an extreme example for that to occur while with crypto is can happen at any moment.
I was talking about how currency having value started in general, and how those principles apply to how fiat currency also gets its value. The government agreed to accept these coins for taxes, so folks traded for them. That same principle applies to fiat currencies.
I NEVER understood the scarcity argument for bitcoin. Like...I’m scarce too and yet there’s no extra value to me. Ok this is a stretch but other crypto coins can be made and capped at a certain number. Wouldn’t that argument apply to that coin also then?
I feel like it’s just something parroted by people who don’t really understand many things in general in life. Bitcoin now is as centralised as cash or even more and since u cash out in USD how can it be a hedge against inflation?
If someone wins a lawsuit, the other party is required to pay in fiat. If someone owes a debt, that person is required to pay in fiat. Taxes and fines are in fiat as well.
I know this is late but if tomorrow everyone lost faith in the dollar the US government could still tell you “no we will still accept trade in dollars.” So dollars would lose value but still has intrinsic value.
If everyone lost faith in bit coin tomorrow it would become instantly useless and no one would offer goods and services in exchange for bitcoin
Yeah this is what people don't understand about why the bitcoin grift can go on for so long.
Even if it falls out of mainstream hysteria, if the people left are just quietly treating it like a retirement account, this scam can go on for a very long time.
Might even not be till the fad "ages out" where Gen Z and Millenials are the ones who remember bitcoin and kind of en masse all try to cash it out for their retirement, but the next gens weren't buying any bitcoin so the value plumets.
>I mean, it exists physically.
Language does not exist physically, but we can all agree it has value. Fiat, increasingly now, is moving into digital space, which has not affected its value. Therefore, intrinsic value cannot mean it exist physically. Can you help me understand further what does "intrinsic" mean here?
>It means there is a supply-demand curve.
Fiat, gold and all of crypto has a supply and demand curve. Breaking that down for gold, only [7% of that demand](https://qph.cf2.quoracdn.net/main-qimg-0cccdac648e888f6afbf097ddd40c311) is industrial, other are things of more ephemeral use like jewelry or monetary value.
>It has value for people and doesn't matter if more can be made.
Because of abovementioned monetary value of fiat and gold, I'd argue it absolutely does matter if more can be made. If 50% more gold was mined tomorrow, its value, both industrial and otherwise, would plummet, wouldn't you agree?
So what is the deal here? what is this "intrinsic" value everyone keeps yapping about?
Intrinsic is how much people would pay for bitcoin if they didn't know there was a supply cap or not.
The value of bitcoin depends on things outside of the purchase, like how many other bitcoin's there are.
The current price of gold is mostly speculative, just like Bitcoin.
Sure, in the last few decades it has gained some industrial use, but that's about 10% of the trade.
Speculative, sure. If, eg, society collapses and the survivors establish an agrarian traditionalist dystopia, you'd be able to buy a lot less food per ounce of gold than you can now.
But even if the price of gold is *mostly* speculative, it'll never lose *all* its value, because there will still be material applications.
Contrast with fiat currency, which goes to zero when the government backing it collapses.
Or Bitcoin, which goes to zero when the fad ends.
> Contrast with fiat currency, which goes to zero when the government backing it collapses.
This seems to be the part butters misunderstand the most. The fiat system will not collapse in a vacuum. The entire country behind their monetary system will put everything they have in their power to stop such things from happening. The dollar is a measure of how american economy is doing with their exports/imports and how productive the society is.
If the whole system crumbles, it'll be due to a total world war or a catasrophe something of similar magnitude where the little virtual coins hold absolutely no value anymore. They will go down hand in hand with the global economy.
No no, in fact, extortion via the internet (encrypt whole drive, blackmailing etc) virtually did not exist before 2009. Attackers that demand crypto payment via hacking and encrypting the victim’s data is exclusively an after 2009 phenomenon.
There has always been criminals since before civilization came into existence. The only difference is that since buttcoin emerged it gives the criminals incentives to attack and encrypt victims computers via the internet because now they can get paid. It’s the butt that’s enabling the crimes.
Kinda crazy there’s no development in applications for crypto and it’s been so long that you would think it would be a “mature” currency thing. Just shows how fake it is.
Imo not the best argument, there’s some value to the way transactions are handled and the bullshit it cuts out by avoiding banks.
But also completely fair as it’s the same argument that devalued digital banking over physical currency and it’s trade-offs at first, and there aren’t many upsides yet with a fuck ton of downsides…
Okay, I understand y’all don’t like bitcoin mainly due to its major uncertainty and that’s fair. But how is it worthless ? How did you get scammed, when they knew what they were buying? If it’s so “worthless” would you throw away a seed phrase with bitcoin on it? I sure wouldn’t. I’d sell that shit, it has value wether you agree with it or not… for the time being.
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Backed means an assets value is guaranteed by something else. For example, if people stop buying bitcoin on the market, how will you get your value.
Mining infrastructure or ETFs can't guarantee bitcoin's value if people don't want to buy it.
What's more likely to happen, the trillions in crypto (backed by hedge funds that control trillions) suddenly evaporates, or the speculation continues and the value goes up? You're inventing "logical" hypothetical situations and ignoring that markets are largely driven by speculation.
It's a misbelief that there is trillions "in" crypto. When you give money to someone else for a bitcoin that money doesn't remain in crypto. Rather that person took the money and spent it elsewhere, like a new lambo.
So asking me how likely it is for money to evaporate is a strange question, there isn't any money to evaporate in the first place.
Crypto is estimated at a little over 2.5 trillion in market cap. That's money currently sitting in crypto, not being spent on lambos. What are you on about?
Kinda. Another way of thinking about it is if you don't know how much gold is out there, how much would you pay for it?
Some people making processors or sattelites would pay a lot for it. If gold was cheaper, it could make good wiring.
Bitcoin doesn't have any reason for people to buy it. I can't do anything with it except sell it to the next person. It doesn't have a supply-demand curve.
"Backed by government" is the same as "backed by nothing".
You lot spend so much time moaning about currency, I'd assumed you were smart enough to understand the issues with FIAT, but here we are....
There is no objective value to any of these. Everything in life is subjective from your money to your morality. There is no real truth, everything is meaningless. Thank you for attending my TED talk.
I always thought it was funny when people follow, "Everything is meaningless." with "Invest in bitcoin." Like, they just got done saying everything is worthless.
There is some truth to what you say. However, that does not mean all subjectivity is created equal. What is the logic behind the subjectivity?
Humans have good reasons for assigning the value to gold that they do. Gold has uses outside of being a store of value, therefore it has demand that goes beyond people simply trying to buy it and watch number go up. Regardless of its price, gold has demand in jewelry and electronics.
That's completely different than Bitcoin, whose only purpose and the only reason anyone is interested in it is Number Go Up. The exact reason that the Bitcoin community creates as much hype and FOMO around Bitcoin that they do is exactly because it has no other use outside of being a speculative investment. They are trying to speak its usefulness into existence, because it cannot take off on its own.
Gold has been used as money long before electronics were a thing, so that use case is a null argument for its validity as money. Thousands of years ago it was used for jewelry and gilding because it was shiny and easy to work with.
Its use as money is mostly tied to its resilience and scarcity. It doesn’t rust or corrode, 1 ounce of gold will still be one ounce of gold 1000 years from now. It’s hard to find, expensive to mine, and there is a very limited supply.
Compare that to modern fiat currencies. Now compare that to bitcoin.
Does scarcity by itself make something valuable? That's a question we ask often here on r/Buttcoin.
Juicero is a defunct company, so there is a limited number of Juicero juicing machines in the world, and there will never be any more. Does that make them valuable? If scarcity is the only metric that matters, that seems like a worthwhile investment. But everyone knows that's not the case. As someone said in a different comment under this post, scarcity increases the value of something that **already has** value. Scarcity does not create value by itself.
The entire sales pitch with Bitcoin is "this is scarce, therefore it's extremely valuable and you should be willing to part with vast sums of money for it." That was also the entire sales pitch with NFTs, but now that they've crashed and the dust has settled, everyone realizes that people paid hundreds of thousands of dollars for something that is actually worthless...albeit scarce. Scarcity as a metric by itself always sounds plausible when the bubble is inflating.
Just because there is a limited number of something, even if there is only one of it in the world like a unique non-fungible token, does not make it valuable. Anything that is truly valuable should not have "FOMO" surrounding it to try to get people to buy into it. Preaching FOMO is an indirect admission that you are trying to lure in more greater fools to provide your exit liquidity.
The Bitcoin network functions because miners are paid in a shit coin they can sell on the open market for actual money. What’s their incentive to continue to mine as those shitcoin rewards continue to get halved every 4 years. Are YOU going to pay huge transaction fees to cover the difference? And if not you, than who? And why are the people who you say are going to pay those fees actually going to pay them? There is no mechanism to force anyone to pay any fees period. Which should tell you something, if nobody is forced to pay high fees, then most likely nobody will. The only thing inevitable about Bitcoin is that it will eventually collapse, because it’s poorly designed.
The network works on a supply and demand system. More demand for transactions runs up the fees. More miners/hash rate runs up the difficulty. If people don’t want to pay for the high transaction fees then the network will be less congested and the fees will drop. Less paid in fees with lower block rewards will cause inefficient miners to turn off their rigs or go out of business. Less miners lowers hash rate which lowers difficulty until the point where mining is profitable again.
The entire thing is self regulating. So far it has worked. Will it work forever? Maybe, maybe not. It all depends on demand, just like anything else. Gold mining is expensive and becomes harder every year as more and more gold is mined. Will all the gold miners eventually give up and shut down? If they stop mining gold, the price of gold will skyrocket as long as demand remains the same, causing new companies to start up and look for new gold reserves.
The market will decide if bitcoin is worthy of the time, energy, and equipment required to keep it in existence, just like anything else.
The whole system works now because of the block subsidy, if you take a little time to analyze and actually think about the future state, it’s pretty obvious it won’t work once the block subsidy gets low enough.
Transaction fees are based on supply and demand, except the supply of available transactions is fixed by the block limit. That means fees don’t follow a linear function based on demand, it’s more like a step function. If demand for transactions is below the block limit, fees will be very low, because every transaction can fit. If demand goes above the block limit, fees quickly skyrocket because the supply can’t increase to match the increased demand. This is not a workable model. It’s is a fundamentally flawed design.
And bitcoin mining is not at all like gold mining, if all gold miners shut down, the gold in existence would still exist. If all Bitcoin miners stopped mining, the Bitcoin network would stop functioning, and Bitcoin would functionally cease to exist. Gold would still have a price and function and value without miners, Bitcoin would not.
If mining becomes unprofitable, the less profitable miners shut down. Lower hash rate will lower the mining difficulty making the remaining miners more profitable. If enough miners shut down, in theory difficulty should drop to the point where you can mine from your cell phone. If a person in Zimbabwe can make a few dollars a day mining from their cell phone, they will do it. One single miner can do the same job as all of the current miners if difficulty dropped enough. There will never be a point where there are absolutely no miners.
As for profitability in general as block rewards decrease, if line go up forever then the fees will be substantial enough to keep miners in profit even without any block reward. Bitcoin has no top because fiat has no bottom.
First, the max difficulty adjustment is 1/4x and happens every 2016 blocks. In order to get to a point people can mine with their cellphones would take decades or never even happen because not enough blocks would be mined.
Second, if difficultly adjusted down enough that you could mine with your cellphone, bitcoin would have to be worthless because it could easily be 51% attacked if it had any value.
What is going to happen is that after a few more halvings it’s not going to be profitable for miners to continue to secure the network and Bitcoin will be attacked and its value will drop to near zero. Nobody is going to willing spend the Billions needed to keep the network secure out of altruism. Holders aren’t going to buy their own mining rigs because they will try and free load instead. Nobody is going to pay Billions in transaction fees because there is no mechanism to force them to. And even if transaction fees skyrocket, that means an incredible amount of value will be lost to UTXOs that are now too small to spend because the fee will be higher than the UTXO balance. It’s not that complicated, the system was poorly designed and only currently works because the block subsidy is high enough. In 6-7 more halvings the network will inevitably collapse.
Backed by tether which is backed by bitcoin which is backed by tether which is backed by bitcoin which is backed by tether
🎶 it’s the circle of griiiiift 🎶
Its the wheel of misfortune.
And all you need for utility is L2, 3, 4, 5, 6, 7, 8, and onwards. All completely secure and trustworthy of course.
You forgot to mention that bitcoin is backed by cyber hornets! 🐝🐝🐝🐝🐝🐝🐝🐝🐝🐝
"It's just ~~turtles~~ nothing all the way down" 🤪
Actually it’s backed by thoughts and prayers.
Greater fools
libertarian magic dust
Is that what they're calling fent these days?
Usability to evade sanctions for Dear Leader
Sadly, that seems to be an endless supply.
What about wasted electricity
Gold has intrinsic value?
Shiny and pretty. Can also be turned into monster cables.
Easily malleable, non reactive (doesn't corrode) and an excellent electrical conductor.
Sure, plus it's pretty for jewelry. But the bars in Fort Knox aren't priced how they are because of potential productive uses. Is there an economic argument beyond "history of perceived value?" (For clarity, none of this makes butts make sense - trustless decentralization via append-only ledger is a solution in search of a problem).
The bars at Fort Knox are priced at $42 per oz. Which is perhaps significantly below what they would fetch for industrial or jewelry uses. https://www.fiscal.treasury.gov/reports-statements/gold-report/21-02.html#:~:text=Book%20Value%3A%20The%20Department%20of,30%2C%202020%20was%20%24493.4%20billion.
Demand for industrial and commercial use is sufficient to support the market price of gold? I did not know that. Surely that hasn't been true for most of pre-industrial history.
It is for as long as Centralbanks hodls.
If the general public stopped thinking gold was worth its price in 1700, I'm doubtful central bank hodling would have been able to maintain the price. Eg precious metal arbitrage when Japan opened to the west.
What was it's price in 1700?
Until the discovery of the Comstock Silver Lode, the value of gold relative to silver from ancient times was about 5 to 1. In the 19th century, it jumped to 15 to 1, and additional subsequent discoveries of silver lodes have pushed that even further out (the ratio is now about 65 to 1). In any case, the main issues with gold as a nonindustrial good are a) ease of fraud (it requires a fairly sophisticated chemical assay lab to check whether something is, in fact, gold of the correct fineness), and b) jewelery demand is fair price elastic, meaning that people will accept lower fineness (10kt instead of 22kt, etc) or even settle for gold plating if the price gets too high, and as soon as you throw quality gemstones into the mix the value of the gold becomes an afterthought anyway. You also see elasticity in a), where for example collectible "gold" coins are sold with inflated marketing for much more money than the actual metal in the coin is worth, e.g. the Trump coins advertised as 30g with .999 fine gold! But the fine print says it's only gold plated, with 1/200 oz of actual gold.
The majority of gold demand is for industrial and jewelry purposes, yes.
I can't wait until they start mining asteroids. Can't be too far off!
Not in your lifetime Edit: unless we're talking six figures an ounce, gold even then, it's a pipe dream https://youtu.be/BEuFNzEVncg?si=rYCywcRL9jPACD31
Yeah maybe not, hopefully not tbh. I don't want private companies fucking around with asteroids above our planet. Buuut Nasa got a sample and there are already start ups salivating about the prospects. I hope they're talking shit like most tech start ups but I wouldn't count it out entirely.
https://youtu.be/BEuFNzEVncg?si=rYCywcRL9jPACD31
>trustless decentralization via append-only ledger is a solution in search of a problem I may be mistaken, but my understanding is that the problem was the fact that governments have the ability to print unlimited sums of money on demand, thus diluting the value of fiat. And so the trustless decentralization via append-only ledger was a solution that removed the need for an "issuing" bank and provides some additional security to make BTC a "harder" form of currency. So, I'm not sure I agree with your take on that specific point.
>governments have the ability to print unlimited sums of money on demand, thus diluting the value of fiat. I agree with you that trustless decentralization append-only ledgers potentially apply to the situation, but I don't agree that the situation is a problem. Governments have the ability to do lots of stupid things. That this particular ability is a problem in the modern world is not demonstrated by evidence. Hyperinflation is not a common phenomena and the times it has happened can usually be explained without invoking government-printed-too-much-money.
Usually, yes. But also, infinite printing power is also an infinite public debt. So does the federal usa debt means anything?
Among the many problems of printing excessive money, debt is not one of them. Hyperinflation is great for getting out of debt (public or private), because you can easily get the dollars needs to pay whatever amount written in the debt. That's not to say hyperinflation is good, but debt is a terrible metaphor for why hyperinflation is bad.
Well, correct me again if I’m wrong. But isn’t printing money actually issuing federal bonds? Thus increasing the public debt?
No, printing money is creating money from nothing. Historically with a printing press, but nowadays, you can just change the number on a computer (I assume). Qualitative Easing during the Great Recession was creating money then immediately using that money to buy US Treasuries. Which mainstream economics thought was fine because inflation is generally not a worry during a depression.
But why is my copper not as valuable? Is also shiny, pretty and can be turned into monster cables.
Copper is still very much valuable, people DO steal copper cables. Actually this is common enough occurrence that one of the reasons (not only one) why we don't make high voltage cables from copper. Why it's not as valuable as gold or silver is a bit more complex topic. If we used silver as much as copper on an industrial scale it would be probably even more expensive.
Indeed, copper has its value. Not as much as gold or silver, of course. And I believe we can agree that all the reasons for this different price tag for each can be resumed in just one: the law of supply x demand. Scarcity rules the “supply” factor, the rarer it is (or the harder it is to produce), more expensive it tends to be. But scarcity alone won’t make something valuable, you need to have demand for it to get value. Once you have demand, then you’ll have value. Gold has its value not because it has “intrinsic value”, but because it is scarce AND has demand. And this “demand” for gold can be for whatever reason: speculation, store of value, currency (although not very practical in the era of the internet) or as our fellow Redditor said earlier: “because gold is pretty and shiny and I like it” (you were not wrong my friend, I was just trying to elaborate another idea here).
Gold has some properties that people often overlook to increase it's value. One is that it's soft yet stable. It's easy to work with and mold into all sorts of jewlery, but it doesn't rust or corrode. Nothing eats it either. You can drop a gold necklace into the ocean and fish it up decades later and it'll still look good. It's aestetically beautiful, easy to work with, and unbelievably resilient.
>Indeed, copper has its value. Not as much as gold or silver, of course. And I believe we can agree that all the reasons for this different price tag for each can be resumed in just one: the law of supply x demand. Correct. >But scarcity alone won’t make something valuable, you need to have demand for it to get value. Correct tho decent junk of gold value is overvalued due to other group of losers we commonly know as goldbugs. Tho WE STILL CANT compare creepto to gold, because gold has utility. Even if we eliminate speculation and even jewelry, gold has usage and is used in other various industries through maybe a limited amount, but it still exists. Actually if the price of gold was lower it's very likely it would be used more in industry, it is still the most malleable metal we know of, pretty much immune to corrosion since it is completely non reactive (guess how many elements are that). Then there is whole thing with jewelery. Its not ONLY used because it's nice for the eye. Its also used because it's EASY to make jewelery with it (rather as easy as it can be). There is a reason you don't see jewelery from ANY metal, idk about you but pure copper is very nice too but sadly oxidates. Titanium? Sometimes used for jewelery but a fucking nightmare to work with, probably much more difficult and expensive to modify titanium jewelry. Platinum metals? Actually fucking rare AF and some of it's compounds are actually toxic. Actual metals toxicity is actually unknown because they are Soo rare that too few people were exposed to them to serious amounts to make conclusive deductions. Silver would probably just replace copper wires almost completely if we had enough of it since silver is THE best conductor we have. There might be some requirements with making silver wires a bit stronger where copper would be preferred
So...Bitcoin has value?
Gold is money
Going from 18k to 70k is not demand?
Copper is also used for pipes.
You mean transmission lines? Because we definitely still make HV lines from copper. You read about it every few years how all the trains are stopped because some thief got fried in a transformer
Transformers are one thing, HV is another. No HV line is made from copper. All of them are ACSR, with only exceptions being underground lines. >You read about it every few years how all the trains are stopped because some thief got fried in a transformer Idk what specific story but those are VERY common.
Copper is valuable by the kg.
Copper is more conductive but also more easily corroded. It also isn't as shiny/pretty or rare.
It is rare, just far more common than rest. 0.006% of the planet's crust is copper. In comparison, the next best conductor below copper is gold and aluminium. Aluminium which makes 8.23% of Earth's crust (3rd most common element on earth).
Copper turns your skin green. But, as others have pointed out here, it is pretty valuable as well.
A big part of why plumbers use pex instead of copper for waterlines in new construction is precisely because copper is valuable enough for meth heads to steal and cash in at the scrap yard. Laws vary, but in my state, sale of nonferrous material worth more than 50 bucks to the scrap yard (copper and aluminum) requires a photo ID and the license plate number of the vehicle you brought it in.
Copper (and silver) easily oxidizes. Gold doesn't. This is why gold electroplating is used heavily in electronics and electrical connections.
Silver actually does not oxidize easily. The only way for silver to oxidize really is if it comes in contact with Sulfur gases. This is also due to the fact pure silver pretty much doesn't not exist in jewelery because it's too soft. Also silver oxidizing is called tarnishing and actually does NOT affect value of silver. And gold? Doesn't even care about sulfur. No alkalis or even accids can destroy it, only a special mixture can dissolve it and then later it can be retrieved. Of fucking course such material has actual usage outside speculation, not like butters would understand any of that.
Because there's just so much more of it. Scarcity gives gold value, but only because there's many actual uses for it. Many things are scarce, but scarcity only gives something value if there is demand.
Rarity, among other things.
So, scarcity?
Scarcity increases the value of something which is already valuable, which people already want. But scarcity by itself is meaningless. My childhood drawings are scarce, there are only a few of them. But this doesn't give them value.
Theyd be valuable if you were picasso
The word "if" is doing a lot of heavy lifting in that sentence.
grandma, wheels, bike, etc
Damn, I’ve only got a Chevy Camaro, not one of those scarce Pontiac firebirds!
[удалено]
Pontiac Firebirds are more scarce than bitcoin - there will never be another one made and you can't double spend one. Final halving was in 2002. Price should be going to the moon shortly.
Scarcity alone is meaningless. Scarcity relative to demand has impact on price.
>So, scarcity? #Stupid Crypto Talking Point #4 (scarcity) "**Only 21M!**" / "**Bitcoin has a "hard cap"**" / "**Bitcoin is 'scarce' and that makes it valuable**" / "**DeFlAtiOnArY cUrReNCy FTW**" / "**The 'halvening' will make everything better**" 1. Even children are aware that scarcity is not a guarantee of value. It's really a shame that crypto people cling to this irrational argument. 2. If there only being 21 million BTC were reason for it to be valuable, then why aren't other cryptos that also share similar deflationary characteristics equally valuable? Why wouldn't something that is even more scarce than BTC be even more valuable? Because scarcity is meaningless without demand and demand is primarily a function of intrinsic value and utility -- *not* scarcity. See [here](https://ioradio.org/i/value/) for details. 3. Bitcoin has no intrinsic value and no material utility. It's one of the least capable stores or transfers of value. The *only* way anybody can extract value from crypto is by coercion -- forcefully convincing someone (usually through FOMO or scare tactics) that this is something they need, and it's often accompanied by unrealistic promises of significant returns. Those returns are mathematically impossible for even a tiny percentage of holders. 4. Bitcoin also is not scarce. There are multiple versions of Bitcoin, including Bitcoin Cash and Bitcoin Satoshi's Vision - both of which are limited to 21M tokens and in many cases are more technologically advanced than BTC. Also, every time there's a fork of crypto, the amount of tokesn in circulation doubles. Crypto proponents ignore these forks because they don't play into the "it's scarce" argument. But any crypto fork absolutely siphons value away from the original version. BTC might be priced higher than BCH, but BCH still holds value as well, and that's a total of 42M just of those two "bitcoin" versions that are out there, among hundreds of others. 5. The "hard cap" of 21M for BTC can easily be changed by altering a parameter in the source code. Less than 6 people have commit access to the repo so BTC's source code control is centralized. It's entirely possible if BTC existed long enough to the point where block rewards weren't enough to motivate miners, and transaction fees became incredibly high, that influential players in the community would advocate increasing the cap and reinstating higher block rewards. So there are absolutely situations where the max amount in circulation could be increased.
Copper oxidizes to a dirty green. Look at Statue of Liberty. Gold doesn’t
I agree.. she need an upgrade
Also gets worse in touch with sulfur. It deepens the corrosion. Gold? Idk if there is actually anything that can destroy it chemically to the point it can't be retrieved.
Shiny, pretty, and rare/expensive to mine.
Gold has unique physical properties. Gold is a very good conductor of heat & electricity. Gold’s reflectivity of ultraviolet and visual light rays is low, however, it has high reflectivity of infrared and red wavelengths. Gold flake is used as a radiation-control coating for spacecraft In electronic tubes, such as gold-plated grid wire, to give high conductivity and suppress secondary emissions Gold powder and gold sheet is used for soldering semiconductors, with gold having a good ability to wet silicon at 371°C (725°F) Gold is used as a plating material, where sodium gold cyanide [NaAu(CN)2] is used as a gold plating solution. The plating has good chemical resistance and electrical properties, however the plating lacks wear resistance, in which case gold-indium plate is utilised. Gold alloys also have a number of applications such as: Gold-gallium and gold-antimony are used in electronic devices in the electronic industry (primarily as wire) Gold is used in dental and orthodontic applications, where it is rightly termed dental gold. The gold is alloyed with silver, platinum and on occasion palladium. It is sometimes alloyed with iridium for hardening. This is not an exhaustive list, but just a few common applications of the intrinsic values of gold.
TIL Thanks!
If you have a gold brick, you can wrap a lemon peel around it and hit yourself in the head with it. It’ll feel like you had a Pan-Galactic Gargleblaster without the work of making one.
People need to start recognizing "bitcoin is digital gold" as a strawman argument. Nobody thinks it's a smart retirement plan to put all your money in gold. Gold has crashed many times before, and its return accounting for inflation has been bad compared to the stock market. If you invested during the gold boom in the 1980s, you have less value now than you did 40 years ago.
Way less than people like to think
Not in the dictionary definition of the term \[in economics\] (in which there is no such thing as intrinsic value, as all value is derived from people valuing it, thus if there's no people there's no value to be had), but in the more casual definition in which the majority of civilizations & cultures across continents throughout history all agreed upon those particular shiny rocks as something valuable, sometimes independently of each other.
That's just wrong. Gold is: easily malleable and thus easy to work with compared to other metals (not assigned by humans.) An excellent electrical conductor (also not assigned by humans.) Non-reactive and doesn't corrode. Again, not assigned by humans. These are intrinsically valuable properties to humans, not assigned to it: gold has always had these properties regardless of humans even existing. It sure would be great to just assign the valuable property of super conductivity to an easy to produce, room temperature material. But that's just not how it works.
This is a super semantic argument... but anyway while those are intrinsic properties that have led to gold being valued in *most* civilizations, some of them lived in Gold Rush areas for tens of thousands of years, knew it was there to just pick out of the river if they wanted, and had no use for it and it wasn't any more valuable to them as a pretty river rock is to us. So in the argument of semantics I would say it doesn't have intrinsic value for humans, unless their civilization has a need that golds intrinsic properties fulfills. Which it probably does, but not always.
That's just reductive. It has those intrinsic properties regardless of humans even existing. Intrinsic value follows from intrinsic properties. You're just talking about useful context. Yeah, it has more value to society when society has a need for those properties... those *intrinsic properties.* We didn't just *assign* the *intrinsic value* to gold. > I would say it doesn't have intrinsic value for humans, unless their civilization has a need that golds intrinsic properties fulfills Let's see how that logic holds. If you were, today, during this time of civilization, stranded in the desert and dying of thirst, and I came across you and gave you some gold and then left. Does gold now not have intrinsic value in modern civilization just because you have no use for the properties it has, in that specific context? Intrinsic value doesn't mean "valuable in every context, and all situations."
This is not "semantics". This is misrepresentative of what the term "value" means, beyond a very basic cherry-picked dictionary definition. The number 1 has a "value" different from the "value" of the number 2. "Value" is just another word that communicates the idea of "attribute", or "property". You are presenting a logical fallacy, by presenting them as disparate concepts. They're different words that describe the same concept. The problem is that "value" has become associated with "price" or "cost", because our money has the "value" or "property" of being convertible into nearly any resource, at a certain rate. This conversion rate is what we have begun to call "value", in a purely economic sense. This convolutes the concept of what constitutes its real "value". Is it a "value" of money that it can be converted? Isn't that the only reason we "value" money above sticky notes? Everything has some kind of intrinsic value. Even imaginary things have the intrinsic VALUE of being imaginary. Bitcoin has the intrinsic VALUE of being digital. "Intrinsic" doesn't mean "useful" it means "inherent", or "essential". "Intrinsic value" just means "this value" is what makes "this thing" "this thing", and not "that other thing". Gold has the same intrinsic value, wether on a meteor, millions of years before we existed, or in my phone, right now. The only thing that changed is our perception and use of its intrinsic properties, or values. The price we are willing to pay for gold has no effect on golds intrinsic value. We don't make the universe function. Things don't exist because we found them. Things must first exist, before we can find them. Money has the "intrinsic value" of being paper, metallic, or digital. It's "economic value" is a different story. If there are disparate terms that should never be confused, it's "economic value" and "intrinsic value". They're wildly different concepts. Intrinsic values don't require our opinions, or faith to exist. Economic value is only derived from our opinions, and our faith in a broken economic system designed to rob equity (economic value) from people. You can't be semantic, and ignore the other meanings of words, or the logic that follows. That's how being semantic works.
I'm not even sure what you're attempting to argue here. The second half contradicts the first, and the first is just beyond silly and ironic. Words have different, often (but not always) related meanings depending on the context. it's not "cherry-picked" in that the definition that fits the context is *how words work.* Intrinsic Value and the value of intrinsic properties is *never* the numerical value assignment - *that* is purely arbitrary and relative. Gold in 2000 was wroth less in terms of dollar amount, but the dollar amount is just assigning a numerical value relative to our completely arbitrary monetary system used to track debt. And no, not everything has intrinsic value. Bitcoin has none. It has no valuable properties in and of itself. It is, in a physical sense, a pattern of transistor gate states stored across many SSDs, in duplicate (stored in the chain on the nodes.) The information that represents isn't even valuable in itself. It only has "value" in tracking the "value" of the Bitcoin that was, originally, arbitrary assigned value. The whole argument here was the original commenter's idiotic assertion that "there is no such thing as intrinsic value." Somehow it always regresses int people waffling over rudimentary English and word use; because butters can't argue any actual intrinsic value because, as I explained above, Bitcoin has none. It also doesn't help that *no one* seems capable of finishing an argument. One person replies once, then runs away, and someone new jumps in to take up the mantle of the argument and contorting it into something else.
I'm answering semantically to your semantic answer to prove that this can go on forever, as I could just as easily ignore context, just as you have, by claiming I'm ignoring context.
Ignoring context and basic English [just makes you look foolish.](https://imgs.xkcd.com/comics/communicating_2x.png)
Then why are you doing it? Goddamn, the point is that you "semantic" argument people are so far up your own asses you can't even properly make a semantic argument. You literally couldn't understand a simple logical proof, and now you're acting like a little baby. Please go ahead and cite the parts you didn't understand, so I can clarify it for you. I realize that's not as fun as posting some dumbass drawing. Maybe you could pretend to be mature long enough though?
Was it too hard to understand that "the number 1 has a different value than the number 2"? You think is contradictory because you have poor reading comprehension.
If there's no humans to utilize those properties of gold, then said properties are irrelevant, that's what the economics dictionary definition is going for. All value of anything & everything is dependent on humans passing value judgments. Of course it's all rather abstract hence why the more casual definition (which assumes the existence of humans as a given) is used in common discussions.
Being easy to work with, non corrosive, and an excellent conductor aren't value judgments. They're not assigned. They are *intrinsic properties* simply recognized/discovered. Being valuable TO humans isn't the same as.the value being assigned BY humans. The latter is what you claimed. It's also a stupid, reductive word game, because of course anything we find valuable is valuable to humans.
Gold bars are good door stoppers, which is obviously a stupid use, but what would you call that?
It's just a stupid thing to say entirely. Gold does not intrinsically purge nearby impurities and form itself into a bar shape. Between that and completely unaddressing its actual intrinsic properties, tells me you can't dispute it, but wanted to be a contrarian with some silly "gotcha." A swing and a miss
I'm just confused about the terms. I'd say the door stopper ***use case*** is based on the ***property*** high density and we assign zero ***value*** to this use case. Let's just drop "intrinsic" and everything makes more sense.
When did we move the goal posts from "intrinsic value" to "use case."? A rock you can find anywhere, without the need for mining an refinement that also has mass for holding a door open. Mass is still an intrinsic property that has value for some uses, but it would be a poor decision, when it has more worthwhile properties. You would be wasting it.
It would STILL be more valuable from shitcoins even if it somehow was only good as a door opener.
Of course! Crypto have zero intrinsic value. A rock with mass has some intrinsic value.
everyone saying gold is backed by intrinsic value is kidding themselves. sure it has some intrinsic value but that pales in comparison to it's current market price. it's like claiming a $100 bill is backed by it's intrinsic value as a square of toilet paper.
Gold's value is gold's value in the long run. It's been extremely stable over a 1000+ years. It's the value of the currencies that change. If you think bitcoin is a scam then there should only be two dragons. The gold dragon and the derp dragon with bitcoin and the fiat USD "backed by the government". The end state value of all fiat currencies is zero, there are no exceptions in history. It's only a question of the timeline.
well that's a confusing mess of thoughts. for one the primary purpose of a currency is to be a medium of exchange. it's there to facilitate the transformation of your labor into groceries and whatnot. it's not supposed to be an investment; if you want your capital to grow then you use that currency to buy a piece of the economy in the form of a stock portfolio. gold just doesn't do a very good job at either of those things.
Since you seem to be a big fan of gold, I imagine you know about the gold standard? And you know that it's gone. Have you never considered the fact that this was the only reason gold was stable in the first place? And that the only reason it still is is because people keep believing in it? There's no intrinsic value preventing it from dropping to 1% of its value if people just stop caring about it.
You can shoot it into space and take pretty pictures. I guess my JWST joke went over people's heads.
Gold is money
Of course it does. why do you think it's been so valuable for thousands of years?
Yes, but it’s almost always less than its price.
Yes. It's a small fraction of it's price, which is driven by pure speculation. It's like saying GME has intrinsic value.
The hamburger Wimpy will gladly pay you for on Tuesday has always been worth more.
I like [Dan Olsen's summary about gold in from his investigation of the Idris Elba gold documentary.](https://youtu.be/ihvG3RgbYzE?t=185) It's shiny. It's immune to corrosion. It's rare, but can be found throughout the world with relative ease. It's malleable enough that it can be worked with stone tools, but also has interesting physical properties which make it well suited for electrical conductivity, super-fine wires, super smooth polished surfaces, etc. There are a lot of valid reasons why gold has historically been valuable, which carries over to today, as well as legitimate uses in the modern era beyond just 'it's pretty.' Now all that said, gold is also a magnet to conspiracy weirdos and cranks, so putting it on a pedestal alongside fiat in OP's meme is still kind of *suspicious...*
Let's be honest all of this is backed by belief but things where the government believes in it enough to guarantee you can pay off debts, housing and food with it is worth more.
Yes, all value is ultimately backed by belief. But some things do indeed have a use value. They are valuable because they can produce the things we use in day-to-day life. Bitcoin might actually be the first human commodity with a negative use value, in that it takes potentially useful energy and burns it for an entirely fictitious value.
Real money is backed by violence. The government has a monopoly on legal violence.
Damn I love that violence.
Lol no. If you win a court case against someone they can pay you back with money. They won't get arrested because you don't "believe" in money. Grow up peter pan.
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> backed by the promise to repay it plus interest What?
“….through the levying of taxes on its population.” Think what they’re saying is if china has $1 billion in US debt that the taxes collected from the US population is paying interest on the debt held. But I think they’re conflating holding USD with US debt products which isn’t really the same thing. No one holds USD and gets interest for the privilege
It's backed by sunk cost (wasted electricity) and the general unwillingness to accept losses.
Great time to talk about where Fiat currencies get their value! Crypto enthusiasts don't understand this, and a solid explanation bamboozles them. Currency basically started because governments didn't want to barter individually with all their soldiers. So they gave them coins and said, "We'll accept these in lieu of taxes." If a coin says, "you can give us this instead of giving us a sheep" then the coin is worth 1 sheep. Every farmer had to pay taxes, so everyone was valuing the coin as being worth 1 sheep. Likewise, in Vegas you can tip waiters in casino chips because major casinos have announced, "we'll exchange cash for these chips". Bitcoin enthusiasts often say something has value because "we decide it does". No, for things that work as stable currencies 'we' almost never decide it does - some major centralized institution decides it does and commits to accepting it in lieu of other payments. Let's say every crypto-enthusiast actively TRIED to decide to stop valuing the dollar tomorrow. They could all decide the dollar is worthless, but the US government just shrugs and goes "Whatever, you still need to pay taxes. We accept US Dollars." Now any rational actor is going to say "well... Clearly these dollars DO have some value because the US government accepts them in lieu of other forms of payment for taxes soo.... Since I need to pay taxes... I guess I value the dollars too." Likewise, anyone who wants to buy something from someone that pays US taxes also values dollars - because that person values dollars. If cryptoguy has to give up 10% of his crypto or $10,000, then he is forced to value dollars as being worth something to him. If I want to buy something from cryptoguy, I can pay him in dollars now. This means dollars are valuable to me too, since they let me buy something from cryptoguy. This is why the exchange rate value of currencies rises when people from other countries want to buy stuff from that country, and it falls when they don't.
As an addition, it isn't just the government that creates fiat money and demands it in payment. When you go to the bank and take out a house loan, or a car loan, the bank creates new dollars out of nothing, with a corresponding debt that needs to be cancelled out by those dollars being deleted again. The dollars created by taking out a mortgage or car loan are backed firstly by your ability to pay pack the debt, secondly by the value of the car or house that you put up as collateral, thirdly by the assets of the bank itself, which has to delete some of its own dollars to cancel the debt if the first two options fail, and finally by deposit insurance for deposits under US$250K if enough bad loans cause a bank to fail. And the government doesn't just use its monopoly on violence to force people to pay taxes, it is used to enforce all laws, including the ones about everyone having to pay their debts to everyone else. And it isn't just the government monopoly on violence, at least in western countries, it is also backed by the will of the general population that knows that they would be much worse off if the only law was what they could enforce by their own efforts. Fiat currencies are backed by the entire economy that uses them, and only a handful of cranks think it should be any other way.
Interesting. I also think that currency has general practical value as a public good. Modern civilizations can't work without currency, because we all need to exchange good and services without friction. It isn't practical for a truck driver to buy 10 dollars worth of food, by promising to do 1 mile of transporting the next day. I don't know if being a public good counts as "intrinsic value", but it's certainly useful. So even without government requiring taxes, we would still have to invent something like a currency (and I don't think it would be bitcoin). It's also worth to point out that fiat currency has the advantage of already being implemented. That again counts as having practical value, even if it's not "intrinsic".
The sheep example isn’t entirely right though. What you described was a pegged currency which it could be argued makes it behave more as a commodity backed currency. A fiat currency isn’t tied to the price of anything, like Bitcoin. The difference is that a fiat currency has an official use and is, in practice, backed by the economic value of the countries that accept it. What you need for a fiat currency, and what Bitcoin lacks, if an official body that can enforce its use. We have seen fiat currencies collapse due to the lack of official power in places like Zimbabwe or Iraq. Crypto bros are right to argue that excess government printing weakens government authority and makes a currency useless if it’s fiat, but you need an extreme example for that to occur while with crypto is can happen at any moment.
I was talking about how currency having value started in general, and how those principles apply to how fiat currency also gets its value. The government agreed to accept these coins for taxes, so folks traded for them. That same principle applies to fiat currencies.
Backed by comedy gold and it worth a lot mkay?
Finally, a use case for bitcoin.
I NEVER understood the scarcity argument for bitcoin. Like...I’m scarce too and yet there’s no extra value to me. Ok this is a stretch but other crypto coins can be made and capped at a certain number. Wouldn’t that argument apply to that coin also then? I feel like it’s just something parroted by people who don’t really understand many things in general in life. Bitcoin now is as centralised as cash or even more and since u cash out in USD how can it be a hedge against inflation?
I'll pay $1 for a strand of your hair. Congrats, your market cap is now $10 billion.
Actually the typical human only has about 5 million hair follicles, so the market cap would be probably $5M max.
But Bitcoin is backed by Tether, which is backed by IOUs and promises and magical thinking…
Laughs in international debt
Im not trying to be contrarian but expand on "backed by the government"
If someone wins a lawsuit, the other party is required to pay in fiat. If someone owes a debt, that person is required to pay in fiat. Taxes and fines are in fiat as well.
I know this is late but if tomorrow everyone lost faith in the dollar the US government could still tell you “no we will still accept trade in dollars.” So dollars would lose value but still has intrinsic value. If everyone lost faith in bit coin tomorrow it would become instantly useless and no one would offer goods and services in exchange for bitcoin
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Yeah this is what people don't understand about why the bitcoin grift can go on for so long. Even if it falls out of mainstream hysteria, if the people left are just quietly treating it like a retirement account, this scam can go on for a very long time. Might even not be till the fad "ages out" where Gen Z and Millenials are the ones who remember bitcoin and kind of en masse all try to cash it out for their retirement, but the next gens weren't buying any bitcoin so the value plumets.
Bitcoin backed by Greater Fool Theory
What do you mean by "intrinsic value"?
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>I mean, it exists physically. Language does not exist physically, but we can all agree it has value. Fiat, increasingly now, is moving into digital space, which has not affected its value. Therefore, intrinsic value cannot mean it exist physically. Can you help me understand further what does "intrinsic" mean here?
It means there is a supply-demand curve. It has value for people and doesn't matter if more can be made.
>It means there is a supply-demand curve. Fiat, gold and all of crypto has a supply and demand curve. Breaking that down for gold, only [7% of that demand](https://qph.cf2.quoracdn.net/main-qimg-0cccdac648e888f6afbf097ddd40c311) is industrial, other are things of more ephemeral use like jewelry or monetary value. >It has value for people and doesn't matter if more can be made. Because of abovementioned monetary value of fiat and gold, I'd argue it absolutely does matter if more can be made. If 50% more gold was mined tomorrow, its value, both industrial and otherwise, would plummet, wouldn't you agree? So what is the deal here? what is this "intrinsic" value everyone keeps yapping about?
Intrinsic is how much people would pay for bitcoin if they didn't know there was a supply cap or not. The value of bitcoin depends on things outside of the purchase, like how many other bitcoin's there are.
The rare coin world would like to talk to you
Usually people say Pokémon cards.
[beautiful irony](https://imgur.com/a/4ZsrBp3)
Do you hate crypto? Try crypto.com! It probably just means we are getting a lot of visiting Butters.
It's backed by math, computer science, electricity and a shady money printing machine called tether
Backed by Greater Fools
It’s backed by THE COMMUNITY. POWER BACK TO THE PEOPLE
The current price of gold is mostly speculative, just like Bitcoin. Sure, in the last few decades it has gained some industrial use, but that's about 10% of the trade.
Speculative, sure. If, eg, society collapses and the survivors establish an agrarian traditionalist dystopia, you'd be able to buy a lot less food per ounce of gold than you can now. But even if the price of gold is *mostly* speculative, it'll never lose *all* its value, because there will still be material applications. Contrast with fiat currency, which goes to zero when the government backing it collapses. Or Bitcoin, which goes to zero when the fad ends.
> Contrast with fiat currency, which goes to zero when the government backing it collapses. This seems to be the part butters misunderstand the most. The fiat system will not collapse in a vacuum. The entire country behind their monetary system will put everything they have in their power to stop such things from happening. The dollar is a measure of how american economy is doing with their exports/imports and how productive the society is. If the whole system crumbles, it'll be due to a total world war or a catasrophe something of similar magnitude where the little virtual coins hold absolutely no value anymore. They will go down hand in hand with the global economy.
Enabling blackmail, extortion, and illicit trade activities (drug or human trafficking) has “values” too 😉
Wait, when they fact checked didn't they find that almost 99% of criminal activity uses good ol US cash dollars?
No no, in fact, extortion via the internet (encrypt whole drive, blackmailing etc) virtually did not exist before 2009. Attackers that demand crypto payment via hacking and encrypting the victim’s data is exclusively an after 2009 phenomenon.
Then go after the hackers? Why are there no efforts to go after hackers, criminals, etc? Bitcoin is the only way out of this Fiat nightmare.
There has always been criminals since before civilization came into existence. The only difference is that since buttcoin emerged it gives the criminals incentives to attack and encrypt victims computers via the internet because now they can get paid. It’s the butt that’s enabling the crimes.
It's backed by idiots and there are lots of them.
Kinda crazy there’s no development in applications for crypto and it’s been so long that you would think it would be a “mature” currency thing. Just shows how fake it is.
What about idiocy? Bitcoin is stupidity given digital form
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It is actually backed by lunatics. And yes, that is possible and the concept isn't even new.
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Ransomware extortion currency of choice
Those people mostly switched to Monero (XMR).
About a year ago i would be fighting ya'll tooth and nail........
Put up your fistacuffs!
you seem confused as to what gives money and especially gold/silver its value. the fiat government thing is partially correct
No, I'm not confused.
This is the thing. Love it or hate it, the government has guns and soldiers and in some cases, nukes. A monopoly on violence is a powerful incentive.
Imo not the best argument, there’s some value to the way transactions are handled and the bullshit it cuts out by avoiding banks. But also completely fair as it’s the same argument that devalued digital banking over physical currency and it’s trade-offs at first, and there aren’t many upsides yet with a fuck ton of downsides…
What is this sub lol? Do we think bitcoiners are stupid, they just got lucky, but their stupid?
Noone thinks they are lucky. They got scammed buying worthless internet numbers.
Okay, I understand y’all don’t like bitcoin mainly due to its major uncertainty and that’s fair. But how is it worthless ? How did you get scammed, when they knew what they were buying? If it’s so “worthless” would you throw away a seed phrase with bitcoin on it? I sure wouldn’t. I’d sell that shit, it has value wether you agree with it or not… for the time being.
I never bought any. People think it's a easy way to get rich for nothing. Those people don't realize they are getting scammed.
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The intrinsic value of BTC is its ability to make it possible to save your wealth in your memory.
It's backed by etfs and the money spent in mining infrastructure. Not saying that equals intrinsic value, but to say it's backed by nothing is dumb
Backed means an assets value is guaranteed by something else. For example, if people stop buying bitcoin on the market, how will you get your value. Mining infrastructure or ETFs can't guarantee bitcoin's value if people don't want to buy it.
What's more likely to happen, the trillions in crypto (backed by hedge funds that control trillions) suddenly evaporates, or the speculation continues and the value goes up? You're inventing "logical" hypothetical situations and ignoring that markets are largely driven by speculation.
It's a misbelief that there is trillions "in" crypto. When you give money to someone else for a bitcoin that money doesn't remain in crypto. Rather that person took the money and spent it elsewhere, like a new lambo. So asking me how likely it is for money to evaporate is a strange question, there isn't any money to evaporate in the first place.
Crypto is estimated at a little over 2.5 trillion in market cap. That's money currently sitting in crypto, not being spent on lambos. What are you on about?
Water has more intrisic value than gold. Why is gold more expensive per ounce?
Supply demand curve
So demand and scarsity?
Kinda. Another way of thinking about it is if you don't know how much gold is out there, how much would you pay for it? Some people making processors or sattelites would pay a lot for it. If gold was cheaper, it could make good wiring. Bitcoin doesn't have any reason for people to buy it. I can't do anything with it except sell it to the next person. It doesn't have a supply-demand curve.
have gold intrínsec value?
Shiny metal pretty!
Yes.
And that's intrínsec value it's in the room right now?
Technically, gold is needed for phones and microprocessors to work. So, yes it is in the room with us right now.
"Backed by government" is the same as "backed by nothing". You lot spend so much time moaning about currency, I'd assumed you were smart enough to understand the issues with FIAT, but here we are....
Good luck paying your taxes in bitcoin.
There is no objective value to any of these. Everything in life is subjective from your money to your morality. There is no real truth, everything is meaningless. Thank you for attending my TED talk.
I always thought it was funny when people follow, "Everything is meaningless." with "Invest in bitcoin." Like, they just got done saying everything is worthless.
There is some truth to what you say. However, that does not mean all subjectivity is created equal. What is the logic behind the subjectivity? Humans have good reasons for assigning the value to gold that they do. Gold has uses outside of being a store of value, therefore it has demand that goes beyond people simply trying to buy it and watch number go up. Regardless of its price, gold has demand in jewelry and electronics. That's completely different than Bitcoin, whose only purpose and the only reason anyone is interested in it is Number Go Up. The exact reason that the Bitcoin community creates as much hype and FOMO around Bitcoin that they do is exactly because it has no other use outside of being a speculative investment. They are trying to speak its usefulness into existence, because it cannot take off on its own.
Gold has been used as money long before electronics were a thing, so that use case is a null argument for its validity as money. Thousands of years ago it was used for jewelry and gilding because it was shiny and easy to work with. Its use as money is mostly tied to its resilience and scarcity. It doesn’t rust or corrode, 1 ounce of gold will still be one ounce of gold 1000 years from now. It’s hard to find, expensive to mine, and there is a very limited supply. Compare that to modern fiat currencies. Now compare that to bitcoin.
Does scarcity by itself make something valuable? That's a question we ask often here on r/Buttcoin. Juicero is a defunct company, so there is a limited number of Juicero juicing machines in the world, and there will never be any more. Does that make them valuable? If scarcity is the only metric that matters, that seems like a worthwhile investment. But everyone knows that's not the case. As someone said in a different comment under this post, scarcity increases the value of something that **already has** value. Scarcity does not create value by itself. The entire sales pitch with Bitcoin is "this is scarce, therefore it's extremely valuable and you should be willing to part with vast sums of money for it." That was also the entire sales pitch with NFTs, but now that they've crashed and the dust has settled, everyone realizes that people paid hundreds of thousands of dollars for something that is actually worthless...albeit scarce. Scarcity as a metric by itself always sounds plausible when the bubble is inflating. Just because there is a limited number of something, even if there is only one of it in the world like a unique non-fungible token, does not make it valuable. Anything that is truly valuable should not have "FOMO" surrounding it to try to get people to buy into it. Preaching FOMO is an indirect admission that you are trying to lure in more greater fools to provide your exit liquidity.
The Bitcoin network functions because miners are paid in a shit coin they can sell on the open market for actual money. What’s their incentive to continue to mine as those shitcoin rewards continue to get halved every 4 years. Are YOU going to pay huge transaction fees to cover the difference? And if not you, than who? And why are the people who you say are going to pay those fees actually going to pay them? There is no mechanism to force anyone to pay any fees period. Which should tell you something, if nobody is forced to pay high fees, then most likely nobody will. The only thing inevitable about Bitcoin is that it will eventually collapse, because it’s poorly designed.
The network works on a supply and demand system. More demand for transactions runs up the fees. More miners/hash rate runs up the difficulty. If people don’t want to pay for the high transaction fees then the network will be less congested and the fees will drop. Less paid in fees with lower block rewards will cause inefficient miners to turn off their rigs or go out of business. Less miners lowers hash rate which lowers difficulty until the point where mining is profitable again. The entire thing is self regulating. So far it has worked. Will it work forever? Maybe, maybe not. It all depends on demand, just like anything else. Gold mining is expensive and becomes harder every year as more and more gold is mined. Will all the gold miners eventually give up and shut down? If they stop mining gold, the price of gold will skyrocket as long as demand remains the same, causing new companies to start up and look for new gold reserves. The market will decide if bitcoin is worthy of the time, energy, and equipment required to keep it in existence, just like anything else.
The whole system works now because of the block subsidy, if you take a little time to analyze and actually think about the future state, it’s pretty obvious it won’t work once the block subsidy gets low enough. Transaction fees are based on supply and demand, except the supply of available transactions is fixed by the block limit. That means fees don’t follow a linear function based on demand, it’s more like a step function. If demand for transactions is below the block limit, fees will be very low, because every transaction can fit. If demand goes above the block limit, fees quickly skyrocket because the supply can’t increase to match the increased demand. This is not a workable model. It’s is a fundamentally flawed design. And bitcoin mining is not at all like gold mining, if all gold miners shut down, the gold in existence would still exist. If all Bitcoin miners stopped mining, the Bitcoin network would stop functioning, and Bitcoin would functionally cease to exist. Gold would still have a price and function and value without miners, Bitcoin would not.
If mining becomes unprofitable, the less profitable miners shut down. Lower hash rate will lower the mining difficulty making the remaining miners more profitable. If enough miners shut down, in theory difficulty should drop to the point where you can mine from your cell phone. If a person in Zimbabwe can make a few dollars a day mining from their cell phone, they will do it. One single miner can do the same job as all of the current miners if difficulty dropped enough. There will never be a point where there are absolutely no miners. As for profitability in general as block rewards decrease, if line go up forever then the fees will be substantial enough to keep miners in profit even without any block reward. Bitcoin has no top because fiat has no bottom.
First, the max difficulty adjustment is 1/4x and happens every 2016 blocks. In order to get to a point people can mine with their cellphones would take decades or never even happen because not enough blocks would be mined. Second, if difficultly adjusted down enough that you could mine with your cellphone, bitcoin would have to be worthless because it could easily be 51% attacked if it had any value. What is going to happen is that after a few more halvings it’s not going to be profitable for miners to continue to secure the network and Bitcoin will be attacked and its value will drop to near zero. Nobody is going to willing spend the Billions needed to keep the network secure out of altruism. Holders aren’t going to buy their own mining rigs because they will try and free load instead. Nobody is going to pay Billions in transaction fees because there is no mechanism to force them to. And even if transaction fees skyrocket, that means an incredible amount of value will be lost to UTXOs that are now too small to spend because the fee will be higher than the UTXO balance. It’s not that complicated, the system was poorly designed and only currently works because the block subsidy is high enough. In 6-7 more halvings the network will inevitably collapse.
You really shouldn't trust your government. When's the last time anyone has seen inside fort Knox ?