That it is consistent does not mean it is equivalent. Humans are pretty poor at avoiding conflating their terms and categories into messes of confusion. This fiction that gold (or any other thing) possesses intrinsic value is one of best examples of such confusion in economics. Things have value because people decide they do—and as soon as they decide otherwise, that value steadily declines to zero, despite how many people ardently believed that value was intrinsic to the thing itself, as if it was one of the physical properties of the thing, an indivisible part of the object. This is nonsense.

Moreover, there is no logical fallacy here on my part. I was not refuting an argument that was not made—I was directly disputing the coherence of an economic adage the average person has been taught is actually rational and sensible when it was brought into the discussion.

Value is never intrinsic, but always created by economic actors—the logical fallacy is arguing otherwise.

Gold, like silver, various other precious metals, and a number of other things—like land, for example—have long histories of value. The historic value of gold among human societies can not be disputed. But that long history has not infused value as a physical property upon gold—or any other thing—itself.

My original statement was neither outrageous nor illogical. Bitcoin is in this case a rather perfect example that highlights exactly what I’m pointing out—the value of bitcoin is in no way intrinsic to bitcoin itself. Bitcoin possesses a number of properties which, analogous to similar properties in a physical object like gold, are found to have both use and exchange value among economic agents. But that value is not actually a core property of bitcoin anymore than value is a core property of gold. Agents identify properties in bitcoin and assign them value. This is always where value comes from—use values from the things one can do with the commodity, and exchange values from the things one can buy with the commodity.

Sure, you can argue that a house, a hamburger, and a car have no intrinsic value per se, but only in relation to humans and/or because we give them value.

But again, with that you're departing from the modern economic notion of intrinsic value in discussions of money.

Do you mean the numismatic notion of intrinsic value? Because that is a very different thing from saying economic intrinsic value. I’m not departing at all on the economic part, I am directly talking to that notion.

What is the actual value of gold? (it's intrinsic value) How is that determined?

It’s an abuse of definitional scope. The commenter is not arguing against a point that has not been made (that would be a strawman); instead, they’re arguing against the applicability of terminology in an argument that was made, but by using an incorrect or alternate definition for the terminology.

In this specific instance, the commenter is using a non-standard definition of “intrinsic value” to argue that gold has no such value. I like to call this “Wittgensteinian chaos” - you see it happen whenever two or more parties fail to explicitly define terms before arguing. It’s usually accidental, not deceptive. In particular, this is likely to happen with technical terminology that does not look enough like jargon to prompt people to look it up, because it also has a coherent, non-technical meaning.

Now circle back to “intrinsic value” - if you aren’t immediately aware that this is a specific economic term[1], you might think to yourself, “oh I get what he’s trying to say”, and proceed to try and refute it. I think economics is particularly prone to this in internet debates.

As I stated in my other reply to you, I am very well aware “intrinsic value” is a specific economic term. I was speaking exactly to that term—what it means, what it implies—and disputing the logical sense of the term itself.

You have twice now in your comments made a host of assumptions about my intentions and the coherence, relevance, and applicability of my statement. You’re ascribing an awful lot of impossible-to-possess knowledge of my mental processes here.

The notion that gold has intrinsic value—despite the longstanding place that notion has remained in social and economic thought for quite some time—is inconsistent with reality. There is no damage done to gold, its value, its physical properties, or economics itself to point out this inconsistency. We’d be better served to use terms that reflect and remain consistent with reality. And when it comes to economic value, the harsh reality we ought to always keep in mind is that no value is intrinsic—despite how frequently it feels (or even seems sensible to believe) otherwise.

The thing your argument is that no one is arguing about these philosophical ideas of intrinsic value. People are just saying: 'if people didn't use gold as money anymore because they lost faith in it, the gold would still be useful (ie as in jewlery, circuit boards, etc).'

I mean I could do you one better with this type of argumentation and say 'your idea is wrong because all ideas are social constructs, so all are equally the imagination of peoples and all are equally valid,' and we could just have nothing left to talk about and get nowhere with anything.

Well, yeah. I didn’t realize I was going to trigger an internet argument.

Anyway, it’s pretty late, and you make a great point that nobody wants to talk about philosophical ideas. Cheers.

You could do one better but that would be missing the point.

The claim was that gold have intrinsic value and bitcoin doesn't. But to the extent of discussing intrinsic value in economical terms then bitcoin does too.

In other words you can't both have your cake and eat it.

Either both bitcoin and gold has intrinsic value in economical terms or none of them have in philosophical terms.

That's not true.

What's not true?

This:

> Either both bitcoin and gold has intrinsic value in economical terms or none of them have in philosophical terms

The argument is precisely that gold has, and bitcoin hasn't, intrinsic value (in the economic sense).

Gold can fulfil the functions of money, but also has other uses. Bitcoin can fulfil some functions of money (barely), but has no other uses.

Bitcoin can fulfill the function of money (but just like gold it's cumbersome, try and pay for a tshirt with gold in H&M).

Bitcoin also have other uses such as store of value (just like gold) and a unique footprint which makes it useful in the digital space.

So no it's not wrong at all.

There was a time when gold wasn't useful for much other than as a store of value and as jewelry. If we are to follow your own argument then Gold had no intrinsic value because of it's limited use before the industrial revolution.

Only the market determines whether something have value. The idea of intrinsic value in anything (also when used in economic terms) is simply misleading and not representing reality but rather the illusion of a reality that doesn't exist.

Gold can loose it's value completely.