Re:Terra Luna crash: CTO of Tether welcomes fair regulation ...
by olalonde on Wednesday June 15, 2022 @09:11AM
(#31752362)
Bingo. A lot of people mistakenly conclude that Bitcoin's "fair value" must be 0 because it lacks an intrinsic value. But they fail to realize that fiat money also lacks an intrinsic value. Even gold to a large extent lacks an intrinsic value in the sense that its intrinsic value is a negligible fraction of its actual market value.
Re:Terra Luna crash: CTO of Tether welcomes fair regulation ...
by nradov on Wednesday June 15, 2022 @11:25AM
(#31754402)
Intrinsic value (or fair value) is a meaningless concept when applied to currencies. The US dollar has value because the US government maintains a fairly effective monopoly on violence over a large chunk of real estate. They require residents to pay taxes in that currency, and if you don't pay then the government will seize your assets by force. Overall this system works pretty well.
Re:Terra Luna crash: CTO of Tether welcomes fair regulation ...
by arbitrage on Wednesday June 15, 2022 @09:28AM
(#31752572)
You're close. Fiat money has value when it's backed by something. The US$ is backed by the US government. It's still fiat money.
Re:Terra Luna crash: CTO of Tether welcomes fair regulation ...
by olalonde on Wednesday June 15, 2022 @09:56AM
(#31752940)
It is "backed" as in endorsed, or supported, by the US government. In the same sense that Bitcoin is "backed" by its many worldwide supporters and miners. It is not "backed" in the traditional meaning of being redeemable for something else at a fixed rate ("backed by gold", "backed by silver", etc.).
That's what is "fair".
Otherwise we need to speak about "intrinsic value". And there's really no intrinsic value in Bitcoin, money doesn't have an "intrinsic value" against something else.
And if you want to argue that "but the technology!", then what can we talk about? Bitcoin's code is open source, if we launch our own coin does it have intrinsic value as well? Can we create endless new blockchains and create value out of thin air?
This is why I don't believe Bitcoin has a "fair" price, to have it, it would need to have a value and then the loop begins again.