In real terms it’s worth whatever the next buyer is willing to pay. It annoys me that people cite the run-up over the last decade as evidence of it’s brilliance when it’s nothing of the sort, but I’d just sound like a loon screaming into the wind.
Personally I think it’s worthless. Honestly I suspect Satoshi Nakamoto (if they’re still alive) probably thinks the same; One of the later posts Satoshi made before disappearing was making the point that if it accrued any value at all then it would be useable to transact and therefore viable.
The problem is that if that’s true of Bitcoin, it’s also true of all tokens, meaning the scarcity argument is entirely imaginary - if one token is perceived as too expensive then the perception of value will shift to another that’s viewed as ”cheaper” (and thus more likely to “mooon!”), meaning the supply of tokens taken as a whole is actually infinite and arbitrary, rather than scarce, and the value of the cryptocurrency market as a whole is therefore infinitely and arbitrarily small per unit (i.e. worthless).
But what do I know? I’m just some loon screaming into the wind.
Yes, that's how scams and con games are played too. I personally can't tell the difference between a cryptocurrency and the classic gold brick scam.
While at a theoretical level different crypto tokens are the same that will not be how the market plays out. That sort of computing power isn't easily replaced and while it exists Bitcoin is unique. So it does have value at the moment, but the value is not inherent in the protocol.
The argument is essentially that the computing and hashing power has intrinsic value for other use cases it could be reapplied to if not doing this. It could, but that value would accrue to the person selling the energy and/or the hardware, not whoever held the token at that time.
If you think about it, what you actually mean is that you don't recognise the utility, not that there isn't utility there. If we do a classic comparison with gold, pretty much nobody gets any utility out of the gold, and yet a tonne of gold still has very high intrinsic value because it has just enough utility to some rare people.
> It could, but that value would accrue to the person selling the energy and/or the hardware, not whoever held the token at that time.
That isn't how anything else works. Little of the value of the economy accrues to the people who mine coal or oil, but they provide most of the raw grunt to make all of everything work.
The economy doesn't have to directly link creation of value to who gets rewarded.
I wasn’t comparing anything to gold (or whatever other asset). The energy expended is cited as a reason for the value of the token, but the utility of that energy, even if it were a near infinite amount, is still zero, because it’s already been expended. It’s a fully sunk cost.
The magic that people try to conjure by saying the cost of mining means it’s valuable is provably not true. That energy isn’t stored as value in the token, it’s gone.
To use your analogy - I’m not saying the value accrues to the miner of the coal/gold/whatever. It accrues to the owner. The asset in this case is not the token, it’s the energy.
The re-deployment of that energy to other use cases is not a transaction between the purchaser of the energy and the owner of the token, it’s a transaction between the purchaser and the energy company. In dollars.
Consider the oracle problem, the fact that running Hello World requires mining a block, that software contains errors and cannot be patched on the blockchain, the curious absence of real world applications of blockchain after all those years, and the inevitable precedence of the Law in the real world that makes any "the code is the law" ideas moot...
A complicated, hard to understand scheme like blockchain is just the right thing to keep the crypto hype going and to attract more of that money that is looking for investment opportunities in this world of overvalued assets and low-interest rates.
(Of course there are many more ways I could lose a house that's ledgered on a blockchain, one thing I missed earlier: The impossibility for an individual to operationally secure the secrets for the crypto scheme against theft or loss.)
Weirdly, that seems worse than having just lawyers.
So the blockchain doesn't have intrinsic value because the crypto currency doesn't have intrinsic value.
Utility, for many use cases, it does have.
If the value goes down the network decreases difficulty of mining so it is cheaper to mine (remember these things started being worth nothing). This also decreases economic security though, we should find some combination of what security is adequate and that will be represented in the tokens.
Let’s not end up in that sad authoritarian cbdc future, instead we can build and adopt global foss systems like the ones we’ve been building the past decade. Or we could ignore it all, call it a scam, and let it be captured by VCs and governments.
And you can take a guess of which cryptocurrencies are going to be the ones powering these CBDCs?
Stellar [0], and XRP [1].
The other useless cryptocurrencies with no other use cases such as the memecoins, meme tokens, etc will wither away.
[0] https://resources.stellar.org/stellar-for-cbdcs
[1] https://ripple.com/insights/ripple-joins-the-digital-pound-f...
Nonetheless, to the extent that you are being serious and not sarcastic, I largely agree with you.
Problem is that if you’ve been alive awhile you’ve seen situations over and over and over again where things that important institutions valued very highly did in fact turn out to be worthless.
(And it's a bit ironic to see crypto enthusiasts place so much weight on the opinion of the largest players in the traditional financial system!)
So is crypto. Some people came up with a collective hallucination that they considered useful and valuable, and convinced some other people that it was, because, hey, we all like valuable things, especially when we can create them out of thin air and sell them to people for other shiny things that we like.
Yes there is. Typically money is legal tender, which means you’re mandated to accept it by a government with large numbers of guns and prison cells.
That’s what for all debts public and private means.
> Yes there is. Typically money is legal tender ...
Parent comment was right, subjective value thesis says people will value things (including money) differently.
And legal tender laws are only "typical" of government coercion in the central bank era, basically the past century or so. Prior to that the king or the local sovereign may have required taxes paid in his coin, but multiple monies circulated and people freely chose which ones to spend, save, accept, or not.
And were routinely scammed out of their savings as a result, it should be noted.
For a global economy, we need a global currency, and USD/EUR have been the closest thing to that so far.
You're missing that we can get really close to things-in-themselves. It's like you got an erection as soon as you read that we were fundamentally separate from things-in-themselves, and just ran with it.
My point is just that value isn't some simple natural thing that you could consider as a positive fact, like you are trying to do. Value doesn't 'take its 'shape' (whatever that would mean) from necessities of human life', and has no immediate special relation to necessities.
Extreme subjectivism never fed nobody nor kept them worm. It only made them think they are smart.
Solipsism 2.0
Of course you can only do a valuation on cash producing assets. Non-cash producing assets can only be priced.
That obviously does not mean that gold, oil, crypto, art, any highly demanded collectible have a price of zero.