The intrinsic value of USD is it's the only currency you can use to pay taxes to the US government. The intrinsic value of gold is its industrial/commercial uses. The intrinsic value of bitcoin is a nearly incorruptable transaction ledger while also being trust less.
None of these things "just work", some or all will fail eventually.
This isn't intrinsic value. The government can conceivably decide USD is worthless (it won't, probably ever, unless the US collapses). USD relies on the US government for value.
Being able to burn money to start a fire would be intrinsic value. Same for gold's conductivity and its other industrial uses. They are physical properties.
If you look at an ATX motherboard from 2009 with an Intel processor and a MacBook Pro mainboard from 2017, the amount of material consumption to create a similar product has fallen dramatically. You can actually see Moore's Law, it's kinda beautiful.
Excuse me ?
Is there historical precedent for something to be as widely accepted as gold, which isn't considered valuable today?
https://gizmodo.com/how-aluminum-cost-more-than-gold-1575564...
What this is worth to the consumer (is currency a product? opinions vary) will vary, but diamonds without industrial use were valued at billions of dollars only 150 years ago. Large diamonds still carry multimillion dollar values, despite that a 32-karat diamond can be grown from carbon ash in a small plasma cell for only hundreds of dollars. Maybe even less if the laboratory is powered with a renewable energy source.
The diamond was perhaps my favorite currency to study. It is an object historically backed partially by human fascination with light, partially by industrial demand, but the industrial demand was slowly diminished by the introduction of synthetic grit and stones. Despite the low cost of manufacturing a synthetic diamond for jewelry, they usually depreciate immediately--that may be a comment on the consumer's demand by those who practice valuation, or it may be that a "used" diamond is somehow worth less than a "newly discovered or grown" diamond. Impossible to say.
Good talking to you!
Saying Bitcoin is "backed" by generated electricity and computer hardware is like saying paper money is "backed" by the printing presses and labor that made it. Economically this is nonsense.
It is not backed by energy in a literal sense of course, that would be obviously meaningless. But the price of energy, BTC and mining difficulty are connected. A change in one variable affects the others.
https://en.wikipedia.org/wiki/List_of_aircraft_carriers_of_t...
and other things like that. Which is why even drug dealers that are hunted by the US trust US dollar.
But that is not income and would only put the US in debt, devaluing the USD.
I think the point he was alluding to is that countries hold a significant chunk of their foreign reserves in USD, which keeps demand for USD high. Other than the obvious trade aspect, one of the major reasons countries do so is because they purchase goods and services from the US military. (e.g. Japan, South Korea).
From an economic standpoint it isn't backed by anything. Bitcoin doesn't have a direct correspondence with any commodity. I can't turn in a bitcoin and get the electricity back.
It's back by nothing. Monopoly money. So is the USD dollar and all other fiat currency. Bitcoin is a fiat currency without the fiat.
The labor of manufacture is perhaps why the fiat currency has value. This argument heads toward philosophy, but without the minting process (and its technological backbone), to some degree the dollar would be valueless cotton.
In nations where the fiat currency is printed on polymer, I feel that their fiat currency states something like, "Not only do we stand as the people of this nation and its currency, but our belief is such that we have printed the currency with a specialized ink on an advanced polymer."
Before you consider military or government or the world outlook, a belief like that is not worth nothing. That note has indeed been backed by something, and no way is it Monopoly money!
There was a time when we hadn't the technology to produce aluminium in significant quantities like we do in today's factories, and it was more expensive than gold. And for that reason, it was used in jewellery, expensive cutlery and even the Washington monument.
Gold is mostly valuable for its scarcity and the way our culture has used scarce metals as a store of value, not because of its intrinsic value as a metal.
Today we can create artificial scarce tokens digitally, before using a centralised party to manage the ledger, today in a decentralised manner. Who knows whether gold's status will last, or in fact bitcoin's. Perhaps the noble notion of decentralisation won't be valued by markets in the end, perhaps there's no reason to respect one token's value for its scarcity when you can programmatically create a million clones on a single computer.
I've been a bitcoin enthusiast for half a decade, but the past few years I've seen a major decline in genuine interest in bitcoin other than as a get rich quick scheme. We used to have lots of cool and fun things going on, now it's bland and boring. People forget bitcoin's only value is its decentralised nature, yet the price increases don't reflect any significant growth in capturing the value of decentralisation, at all.
There are many valuable things that are not made into jewelry. There are metals that are more valuable than gold, but they are not as commonly used in jewelry because they aren't as aesthetically appealing. Gold was used for making beautiful things in cultures that did not treat it as money. It became valued because it was uniquely workable, beautiful, and durable.
Part of gold's value is its rarity, certainly. But another part of it is utility. If investor demand for gold collapsed, it would still be valued.
You seem to ignore the simple fact that as demand grows for a limited resource, the price grows. So even if the "value" of bitcoin viz a viz decentralization has remained constant, its market cap goes up because demand has exploded.
Thus, it is not the actual properties that make them desirable as jewelry. It is solely the fact that they are valuable that people want them for jewelry.
If the price of gold was to collapse tomorrow, it's use in jewellery would continue without pause.
https://www.statista.com/statistics/299603/gold-demand-by-se...
Jewelry is definitely not just a fancier way to store gold. How many people do you know that sold their wedding rings when prices spiked?
I don't think intrinsic value is a meaningful term. Gold has been valued for millennia because it is very useful for making pretty things. And the price has been high for a long time because the supply of it is low.
I don't know how to read this other than as stating the same thing with different words, i.e. "tracking inflation" is just another way of saying that its valuable.
Maybe in US inflation isn't a problem but in my country until a few years 7% inflation was low, although maybe the official inflation is low, but as far as I know asset prices have gone up due to quantitative easing.