Any question answered...

The Fed says it’s a commodity. In fact it’s the only digital currency classified as such.

I'm not sure that's quite right - a share gives a right to share in income and assets of the company (either on paying dividends or winding up). Yes that's based on the legal structure of company law, but it is still a distinction to bitcoin, which gives a right to share in nothing at all - no underlying business to pay dividends, no assets that could be distributed on winding up

And no debts (ie, tax) that can only be settled with BTC. Unless you've done something extremely unwise involving organized crime, I guess.

I don't think those are sufficiently intrinsic for me to make a distinction.

Put it this way; I don't think any economists would say that the currency of say Laos has no intrinsic value, but I would guess that Bitcoin is probably bigger and more economically secure than the currency of Laos.

• If the Laotian Kip has no intrinsic value but the US Dollar does, then that's completely arbitrary and the threshold for "intrinsic value" is just a matter of personal opinion
  
• If the Laotian Kip has intrinsic value then I don't see why Bitcoin can't have intrinsic value. There are a group of people who want it and you can exchange it for other things and that seems good enough.
  

bitcoin, which gives a right to share in nothing at all - no underlying business to pay dividends, no assets that could be distributed on winding up

I would say owning 2 Bitcoin gives you a right to move 2 Bitcoin around at your whim, including exchanging 2 Bitcoin for 2 Bitcoin's worth of something else. So long as there are enough people with an interest in Bitcoin to maintain the blockchain processing infrastructure stuff, anyway.

Can I just suggest a crucial clarification on the meaning of ‘intrinsic’ regarding money?

There’s two basic types of money: commodity money and fiat. Commodity money has intrinsic value; fiat does not.

1) Commodity money is made of any material that is valued in a society and has a use other than being money. Europeans used gold and silver, Aztecs used cacao beans. We don’t really use this money today for a bunch of reasons but particularly because the price of a material can change rapidly depending on supply-demand. An example is when the Spanish discovered loads of silver in the Americas, and had to keep it secret and locked away because they used silver money, and if the price of silver tanked then everything would quickly become massively expensive to buy, and their economy would tank.

2) Fiat money, Latin for let it be (worth whatever it says), has little to no intrinsic value. The main reason for using fiat is that it is a cheap, easily transportable stand-in for something valuable held securely by the issuer of the money. Previously this was gold, and countries had massive fortresses storing tons of gold. Nowadays fiat is tied to the value of the economy, and the issuing country’s “word” helps makes it a strong currency.

The difference is that fiat currency (not backed by gold) is issued by a government, essentially as a means of "keeping score" of everything that's under its control. That's why you have to pay tax to that government in their currency. Bitcoin is not keeping track of anything tangible, just (as described) the value of the work done to discover/mine it.

Sure, but that's the same as the ownership right anyone has in anything. I could say the same about any of my possessions

"intrinsic value" is such a blurry concept

It's blurry at the edges, but it builds pretty well even up to the level of fiat currency if you take it as read that there is some sort of collaborative society, even one as simple as "will work for food"

Commodity money has intrinsic value

Often claimed, but not convincing.

Most of gold's "intrinsic" value comes from the fact that there's always someone to sell to who also thinks it has value, just the same as fiat currency.

Its actual intrinsic value as a non-oxidizing conductor is tiny (because you only need very small amounts). Jewellery is fashion, there's nothing intrinsic about that demand. It might be reliable demand, but that's not the same as being intrinsic.

I want to buy a buggy from FB marketplace. I've responded to 2 ads which were listed in london. when asking for their address to collect it turns out the location is their road name, not london borough.
Both have agreed to send the buggy to me. Both have replied with very similar messages. Is this some kind of scam? AI generated text? Mad coincidence?
Both items seem good value but would say averagely priced, not 'too good to be true'

2 Attachments

Ah well I've not lived there for nearly a decade so it could well have shut down/moved

Right, but isn't a government just an arbitrary set of representatives of a bunch of people? They have some set of resources at their disposal and they say "this piece of paper has value because we say it has value, and we will prop up the systems that allow you to transfer it around and exchange it for things, and we have a consensus to maintain some kind of order in the system" and they are successful to varying degrees.

It doesn't seem fundamentally different from Bitcoin

Is this some kind of scam?

If you're asking this, it probably is. Is it a babyzen?

£7.49 to send a huge heavy buggy?

Nah

The key characteristic of bitcoin is its volatility. It makes it unattractive as a currency, and superficially attractive as an investment proposition for muppets who think they can time the market.

The price of a currency is dictated by demand for that currency, which at a fundamental level is connected to the need to complete transactions in that currency. Albeit there are a lot of complex factors overlaying that.

In simple terms, if you want to buy goods from a UK company, which in turn needs to pay its taxes (and probably most of its suppliers and employees) in sterling, then you need to buy sterling to buy the goods, which at sufficient scale would push up the price of sterling relative to other currencies.

I don't think you can say the same for bitcoin. What are the fundamentals that underlie the price?

Try "mining" some sterling and find out what the difference is.

A government isn't just an arbitrary group of people. They have the power to enforce the relationship between their currency and actual physical stuff in the country (barring revolution) and to force you to use that currency to pay tax to them because it is their money.

£7.49 will only get you something up to 10kg. Plus it has to be packaged in a box that is max 46x46x61cm.

https://send.royalmail.com/send/youritem?compensation=20&country=GBR&format=MediumParcel&weight=10000&weightUnit=G

Yeah postage seemed cheap to me too. But boxed it’s 42x52x16 or something. What’s the scam? They send a brick not a buggy?

How much are you risking?
How would you be paying?
Would you know their address to go round and install frozen sausages in a suitable place?

The government is an arbitrary set of people (not necessarily representatives, since not everywhere is a democracy) that can use the police, courts and army to enforce payment of taxes in its desired currency.

Bitcoin doesn't have an army attached, and with some particularly stupid exceptions you can't use it to pay taxes or settle court fines anywhere.

Although you may be more interested in a currency's ability to buy pizza and/or drugs, they're not generally more important than staying out of prison.

£130-150
PP G&S
Yes, supposing what they've given me is their actual address. And I could be bothered to travel to Blackpool...

Your perspective highlights an important point: the notion of intrinsic value is largely subjective and context-dependent, particularly when discussing commodity money like gold, or cacao beans as I also mentioned. Value is a consensus. For both commodity money and fiat currency, their value comes from the collective agreement and confidence in their exchangeability for goods and services.

Historically, the intrinsic value of gold and similar commodities has been attributed to their physical properties: scarcity, durability, divisibility, and others that make them suitable for use as money. However, as you've pointed out, the utility value of gold, especially in industrial applications like electronics due to its non-oxidizing properties, represents a fraction of its market value.

The value attributed to gold for uses like jewelry is subject to cultural and fashion trends, which of course fluctuate. These provide a demand floor for gold, and that’s where "intrinsic" conflates reliability with inherent value.

Fiat, however, is rather useless other than as currency.

It still all seems arbitrary. I don't see a practical difference between a currency backed by a bunch of rich and powerful people who theoretically have an army and a bunch of rich and powerful people who do not have an army

An army is just a bunch of people with resources

It’s all a human construct, so at some point yes it is arbitrary. Just like the legal system.