There is no such thing as intrinsic value, all value is subjective, only existing if there is a conscious being that can provide a valuation. These beings have shifting, impermanent, prefecerences, and non-uniform preferences. The many factors which affect their considerations also change quite frequently: a glass of water is worth very little when I'm boating across a large pristine lake, yet it is worth an enormous sum as I stumble across a scorched desert.
BTW, the majority of gold's current market price does not stem from industrial/ornamental usage, but a collective "delusion" of monetary value (that has lasted thousands of years). Not to say gold shouldn't have any monetary value, as it is one of most useful materials in that regard. But the intrinsic value argument against bitcoin seems silly to me, given the story of gold.
Uhh, yes there is such a thing as intrinsic value and... you just proved it!
"a glass of water is worth very little when I'm boating across a large pristine lake"
So you're saying that when someone is offering you 1 dollar, doesn't matter much to you, if
you sleep in a bed made of dollars. No way!!!
I hope you understood that water didn't lose its intrinsic value. Because you can(and want to)
still drink it and it will still keep you alive. Whether you have lots of it, or none at all,
your body will keep asking for its usual dosage.
This only because humans need water to live, and they are the ones performing the valuation. There is nothing "intrinsic" about it. Water has very large demand that is extremely entrenched due to its biological importance. This is unlikely to change, and this confusingly may seem like some sort of intrinsic value. But it isn't.
Value is an extrinsic property, meaning it stems purely from entities outside of the object itself. If humans evolved to not need any water, then perhaps they wouldn't value it at all. How can the intrinsic value of object A depend on the nature of some external object B?
You would have saved a lot of typing if you had just read the definition of "intrinsic value" as a
finance term. Basically in your first paragraph you explained why it has intrinsic value.
You obviously brought a philosophical argument to an economics debate :P
Haha ok glad we are on the same page now. I was originally responding to a comment about the intrinsic value of gold. How does one apply http://en.m.wikipedia.org/wiki/Intrinsic_value_(finance) to gold? It produces no cash flow or income. This is why I used a philosophical approach :p
Heh, approaching economics from a philosophical standpoint is the road to madness. I'd argue that
sociology is a better approach to understanding economics, but then I would have fallen into your
trap; because then we'd have a philosophical discussion :P
I'm far from an expert in economics, but if you're interested in the (very dirty)history of gold, the
wikipedia page of the "Gold Standard" is a good start.
BTW, the majority of gold's current market price does not stem from industrial/ornamental usage, but a collective "delusion" of monetary value (that has lasted thousands of years). Not to say gold shouldn't have any monetary value, as it is one of most useful materials in that regard. But the intrinsic value argument against bitcoin seems silly to me, given the story of gold.