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Gold has no value whatsoever as well. Yet it's considered a commodity. Even money has no value whatsoever. Money is a promise from a government to grant some go

by esbio 12y ago

Gold has no value whatsoever as well. Yet it's considered a commodity. Even money has no value whatsoever. Money is a promise from a government to grant some goods or services. If the government gives up, or its companies close down or leave, or decides to devalue its currency, you lose money regardless. Commodities are assigned the value humans agree on, according to market. Bitcoin is no different. It's a digital commodity, but a commodity nevertheless. It will have its bubbles, but they are fueled by human greed, not the nature of bitcoin per se.

Goronmon 12y ago
Gold has no value whatsoever as well. You mean other than in jewelry and electronics? Even money has no value whatsoever. Money is a promise from a government to grant some goods or services. I think you are using a strange definition of "no value".
- TomGullen 12y ago
  > You mean other than in jewelry and electronics? What % of Golds value do you think is based on usage in jewelry and electronics? Hint, not much.
  - canvia 12y ago
    66% isn't a lot? "In 2010, jewelry accounted for approximately 54% percent of gold demand, which totaled 3,812 tonnes, according to the World Gold Council and The London Bullion Market Association. ... Another 12% of demand is attributed to medical and industrial uses for gold, where it is used in the manufacturing of medical devices like stents and precision electronics like GPS units." http://www.investopedia.com/financial-edge/0311/what-drives-the-price-of-gold.aspx http://www.investopedia.com/financial-edge/0311/what-drives-...
    - mynameisvlad 12y ago
      He never said what amount of gold goes into jewelry, which your source gives (the demand). His point was not the demand, but the value of gold associated with its use in jewelry or electronics (which I would argue is also high, but that's just my opinion).
- jasonisalive 12y ago
  If you think about what they're implying instead of just being snarky, they're really saying that bitcoin/gold/other monetary commodities have no intrinsic value beyond their a) suitability as exchange technologies and b) broad recognition as desirable. Another way of thinking this one through would be to say, okay, gold may be desired for jewelery and electronics, but so are many other metals, so why did gold become a principal money and other metals didn't? The answer doesn't have anything to do with gold's desirability for jewelery/electronics - it has to do with gold's: good mix of abundance and scarcity, impossibility to forge, durability, friability, etc. It's a rhetorical exercise necessary to make people understand that while Bitcoin may just be a bunch of numbers someone invented, the combined decision of humans to value it gives it its real value (facilitated of course by its suitability as an exchange technology.)
- morganvachon 12y ago
  No, he's right: Money is a fiat currency. As long as the US government backs paper money, it has perceived value. The moment the Fed stops backing it, it loses its perceived value and becomes only as valuable as its physical contents, i.e. paper and ink, so you could burn it or wipe your ass with it, but you can't eat it. Let the apocalypse happen and see how valuable that paper money is, along with that bitcoin, and that bank account, and that credit card. That's when real, valuable things like salt, non-perishable food, fuel, certain metals, tools, and so on will have barter value. But the idea of a currency will (for a time at least) go away under those circumstances. Modern wealth is really a very fragile construction when you think about it; it's all just perceived value in the end.
  - lbsnake7 12y ago
    Money represents work. When you do work, you get money. When you want work done, you give money to someone else. That's fundamentally what our economy runs on. You could argue that some people take advantage of this on the top, but the vast majority of any economy is based on people doing work. The dollar is backed by the US government. When you go to a store and say you want to buy something, they have to take your money. In fact it's illegal for someone to not accept legal tender. That is the value of the dollar. So now you say, but the US government isn't anyone special. Countries come and go in dominance, why is the dollar worth more than any other currency? Because their really is no other country with which everyone else wants to trade with on a massive scale. Americans are willing to give more money for work than any other country, so it is in other countries best interest to take dollars, which in turn increases the demand for said dollar. Wouldn't it be useful for a digital currency like bitcoin to replace all of that? Not really, unless it has actual ties with actual money. A digital currency's only real value is being able to send and receive money, fast. But once it gets wherever, it still has to be converted back to the local currency. Gold and other commodities have physical values with physical properties than can physically do things. That in itself makes them have a base value, when they go up or down, that's just the market being the market. You could start talking about how more companies (like Microsoft) are accepting bitcoin, so potentially you'll never have to convert it back to local currency but that conversation leads to the dollar being essentially worthless and the US government could collapse any minute and you should save all your money in bitcoin. Which sounds stupid and goes into pump-and-dump territory.
- esbio 12y ago
  > You mean other than in jewelry and electronics? Again, it's perceived and agreed value. Gold is valuable because we decided it is. Jewels are as valuable as the fashion agrees them to be. In fact, you can find jewels worth thousands of dollars that are made of steel. Their intrinsic value for the material is a few cents. > Even money has no value whatsoever. Money is a promise from a government to grant some goods or services. I think you are using a strange definition of "no value". What I mean is that the value is just what the system agrees on. If the system decides that the US are insolvent, or can't back their currency (which is a _promise_ to deliver) its value goes down, potentially to the value of the paper it's printed on. In the end, the value of something depends on what people agree it's backing in terms of goods and services. It's an agreement, a child's game among adults, and can change in a whim.

by esbio 12y ago

Goronmon 12y ago

Gold has no value whatsoever as well. You mean other than in jewelry and electronics? Even money has no value whatsoever. Money is a promise from a government to grant some goods or services. I think you are using a strange definition of "no value".

TomGullen 12y ago
> You mean other than in jewelry and electronics? What % of Golds value do you think is based on usage in jewelry and electronics? Hint, not much.
- canvia 12y ago
  66% isn't a lot? "In 2010, jewelry accounted for approximately 54% percent of gold demand, which totaled 3,812 tonnes, according to the World Gold Council and The London Bullion Market Association. ... Another 12% of demand is attributed to medical and industrial uses for gold, where it is used in the manufacturing of medical devices like stents and precision electronics like GPS units." http://www.investopedia.com/financial-edge/0311/what-drives-the-price-of-gold.aspx http://www.investopedia.com/financial-edge/0311/what-drives-...
  - mynameisvlad 12y ago
    He never said what amount of gold goes into jewelry, which your source gives (the demand). His point was not the demand, but the value of gold associated with its use in jewelry or electronics (which I would argue is also high, but that's just my opinion).
jasonisalive 12y ago
If you think about what they're implying instead of just being snarky, they're really saying that bitcoin/gold/other monetary commodities have no intrinsic value beyond their a) suitability as exchange technologies and b) broad recognition as desirable. Another way of thinking this one through would be to say, okay, gold may be desired for jewelery and electronics, but so are many other metals, so why did gold become a principal money and other metals didn't? The answer doesn't have anything to do with gold's desirability for jewelery/electronics - it has to do with gold's: good mix of abundance and scarcity, impossibility to forge, durability, friability, etc. It's a rhetorical exercise necessary to make people understand that while Bitcoin may just be a bunch of numbers someone invented, the combined decision of humans to value it gives it its real value (facilitated of course by its suitability as an exchange technology.)
morganvachon 12y ago
No, he's right: Money is a fiat currency. As long as the US government backs paper money, it has perceived value. The moment the Fed stops backing it, it loses its perceived value and becomes only as valuable as its physical contents, i.e. paper and ink, so you could burn it or wipe your ass with it, but you can't eat it. Let the apocalypse happen and see how valuable that paper money is, along with that bitcoin, and that bank account, and that credit card. That's when real, valuable things like salt, non-perishable food, fuel, certain metals, tools, and so on will have barter value. But the idea of a currency will (for a time at least) go away under those circumstances. Modern wealth is really a very fragile construction when you think about it; it's all just perceived value in the end.
- lbsnake7 12y ago
  Money represents work. When you do work, you get money. When you want work done, you give money to someone else. That's fundamentally what our economy runs on. You could argue that some people take advantage of this on the top, but the vast majority of any economy is based on people doing work. The dollar is backed by the US government. When you go to a store and say you want to buy something, they have to take your money. In fact it's illegal for someone to not accept legal tender. That is the value of the dollar. So now you say, but the US government isn't anyone special. Countries come and go in dominance, why is the dollar worth more than any other currency? Because their really is no other country with which everyone else wants to trade with on a massive scale. Americans are willing to give more money for work than any other country, so it is in other countries best interest to take dollars, which in turn increases the demand for said dollar. Wouldn't it be useful for a digital currency like bitcoin to replace all of that? Not really, unless it has actual ties with actual money. A digital currency's only real value is being able to send and receive money, fast. But once it gets wherever, it still has to be converted back to the local currency. Gold and other commodities have physical values with physical properties than can physically do things. That in itself makes them have a base value, when they go up or down, that's just the market being the market. You could start talking about how more companies (like Microsoft) are accepting bitcoin, so potentially you'll never have to convert it back to local currency but that conversation leads to the dollar being essentially worthless and the US government could collapse any minute and you should save all your money in bitcoin. Which sounds stupid and goes into pump-and-dump territory.
esbio 12y ago
> You mean other than in jewelry and electronics? Again, it's perceived and agreed value. Gold is valuable because we decided it is. Jewels are as valuable as the fashion agrees them to be. In fact, you can find jewels worth thousands of dollars that are made of steel. Their intrinsic value for the material is a few cents. > Even money has no value whatsoever. Money is a promise from a government to grant some goods or services. I think you are using a strange definition of "no value". What I mean is that the value is just what the system agrees on. If the system decides that the US are insolvent, or can't back their currency (which is a _promise_ to deliver) its value goes down, potentially to the value of the paper it's printed on. In the end, the value of something depends on what people agree it's backing in terms of goods and services. It's an agreement, a child's game among adults, and can change in a whim.