You can argue that USD are backed by fiat laws. We have to hold them in order to pay taxes. I can see real value in free market currencies backed by network effects. I agree there is no intrinsic value in bitcoin but what is the intrinsic value of a bank note? What separates the value of different bank notes other than the number on them?
Currency doesnt need intrinsic value if it is a secure medium of exchange.
I see crypto as branded ledgers. Brands have value, ledgers can be trusted to persist over time. But brand loyalty can change and debt can be voided. I prefer my money without counterparty risk to be a store of value over time
I really don't want to speculate in crypto. I can see it being useful as a currency but I would not want it as money and CBDC are the beast system
Currency doesnt need intrinsic value if it is a secure medium of exchange.
Without something intrinsic, what is the value of it? I agree that currencies don't need intrinsic value since their purpose is just transfer of value, not storage of it.
I prefer my money without counterparty risk to be a store of value over time
Au and Ag.
I own lots of Au and Ag, I understand why they have value.
Crypto doesn't need intrinsic value beyond its nature of being secure, fungible, and portable. As long as the block chain exists your crypto is as secure as your pass phrase. You can travel anywhere with your pass phrase in your head and as long as the network is accessible at your destination you can access your money. This strikes me as a good thing, a useful tool.
Raoul Pal did an interesting video for Real Finance where he talks about the value of networks. For example if you are the only person on Facebook it has zero value but as the network grows its value increases.
There are no doubt limits to growth and diminishing returns but we are currently seeing a growth phase. Bitcoin may be the next Myspace or it may be the backbone of a global currency system and the early adopters are being rewarded for foresight and stomach for risk.
Holding Bitcoin isn't owning part of the network. The value of the network is separate.
early adopters are being rewarded for foresight and stomach for risk.
How are they investing in the network? It's a bunch of opportunists hoping for an even more greedy opportunist to buy their coins at a higher price. See NFTs.
Money represents a store of value of human endeavors. Whether storing the value of digging up gold or the accounting effort of recording transactions is largely a matter of personal preference.
What else has a track record like those two metals? They also have actual uses, physically exist, and are naturally scarce.
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