Paper bills, or “fiat” money, also have no intrinsic value.
Using paper money has already defined you as a participant in accepting the societal construct of money.
As such, Bitcoin having no intrinsic is not novel or consequential and has no bearing on its utility.
Well, I mean (a) it is unwise to accumulate a big pile of paper money (or the equivalent in a bank); if you do this, you will in the long run lose money in real terms. By design. Money (or at least modern money; things were somewhat different in persistently-deflationary pre-industrial economies) is not designed for investment. Money should not be the comparison; it’s a tool, not an investment vehicle.
But (b) money is given some real grounding by states; you can pay tax with it, in particular. It’s not much, and it’s not bulletproof, but by comparison to cryptocurrency, well, it’s _something_.
But really, it makes no sense as an argument that hoarding cryptocurrency is a good idea, because hoarding _money_ is, notoriously, a _bad_ idea.
Modern money has operated as you describe for less than one human lifetime. It might not work long-term, and indeed there are significant reasons for worry that it won't. Not that it _can't_ in principle, but that it _won't_ due to mismanagement and misaligned political incentives. A future alternate system might well have deflationary characteristics.
If you mean Bretton Woods, that is in many ways an implementation detail. Ignoring the Great Depression (which probably _should_ be treated as a special case), and brief (~1 year) shocks after WW1 and 2, the last time the US, to take an example, saw _persistent_ deflation was the late 19th century.
Fiat currencies have value because you have to pay your taxes with it. There’s no choosing not to participate.
> Gold has its uses. It’s a pretty metal and has practical uses in engineering and medicine.
Would you say gold’s value is determined mostly by its practical use? Because it seems demand is largely driven by speculation as an alternative currency.
Gold has its uses. It’s a pretty metal and has practical uses in engineering and medicine.
It has been a choice for jewelry for thousands of years.