Gyroscopic Investing

edsanville wrote: I do value bitcoins

What is it about them that you value?

Kshartle wrote:

edsanville wrote: I do value bitcoins

What is it about them that you value?

(Deeeeep breath)

Well, on the most visceral level, it's interesting to be a part of bitcoin, and actually own my 0.1 BTC now .

But, beyond that, are my intellectual reasons for believing that cryptocurrencies have a very bright future.

I believe that value is inherently subjective:  each individual decides what they value, and nobody can tell them they are wrong.  This is the way the world works, as far as I've observed, and many great economists have written about this over the years, (Mises, Hayek,  etc).  I don't believe in the Labor Theory of Value, or in any theories of "absolute" value.  You cannot prove that one collection of subatomic particles has more "value" than another collection.  It is subjective.

I believe that value is inherently ordinal:  each individual arranges goods and services in order of preference.  On an internal level, we only value things relative to other things.  I could say that I value an apple more than a banana, but I might personally value an apple and a banana more than two apples.  Maybe I want a couple different fruits for my snack today.  The first apple is valued more than the banana, but the second apple is valued less than the first banana.

The startling conclusion is:  The only reason transactions occur in the economy is because value is inherently subjective, and each individual's internal order of preference is different. 

I go to work because I value my paycheck more than I value 40 hours of my life each week.  My employer pays me because they value my 40 hours of work more than my paycheck.  Neither of us is "incorrect" about our value assessments.  If the values were objectively equal, then neither of us would get any profit from the transaction, which is also clearly untrue.

I go to the store and exchange $X for some fresh mangoes because I value the mangoes over the $X.  The grocery store sells me the mangoes because they value the $X over the mangoes.  Neither of us is "incorrect" about our value assessments.  If the values were objectively equal, then neither of us would get any profit from the transaction, which is again clearly untrue.

Goods and services only have quantifiable "prices" because of the price discovery mechanism of the marketplace, which is always in motion, and is always tentative.  It is the result of millions of people exchanging goods and services for varying quantities of some fungible, divisible, standardized, scarce asset, using their own personal orders of preference.  The orders of preference for different individuals are constantly in flux as a result of supply and preference changes, because we're only human beings.

With that said, gold has been a wonderful medium of exchange for all of human history because of its inherent qualities.  There's nothing special about that particular element on the periodic table, and I don't believe gold is valued as money because of some industrial demand, or even jewelry demand.  I simply don't believe in the concept of absolute value, as value is a human-bestowed, subjective parameter, and isn't even a quantitative one at that, (being ordinal).  Gold, however, along with silver and even copper, has always been a fantastic medium of exchange.  People have speculated about the "reasons" for this, but that's kind of irrelevent.  In the end, the market chose gold, (and silver, and copper, etc).  Other markets have selected shells, and giant stone coins, (Yap Island).

I believe that, as a medium of exchange, well-engineered cryptocurrencies have huge, world-changing potential.  I believe they have the potential to become valuable global currencies in their own right.  Would I replace my gold with bitcoins?  Absolutely not!  But I firmly believe that 15 years from now, the cryptocurrency market will be much larger, with many, many more transactions around the globe. 

The critics are correct that, right now, BTC make a piss-poor currency because of their wild gyrations in price.  However, as more people use BTC as a medium of exchange, the trading volume will go up, and their price will become much less volatile.  BTC will start to behave like a "real" currency, albeit one without any centralized control.  And, at that point in time, they will be very difficult to stop.  Before that time, though, they have a long, long way to appreciate, IMHO.  And the price is going to continue to fluctuate wildly, no doubt about it.

Or, I could be wrong and BTC is forgotten in a few years.  Or, more likely IMHO, a different cryptocurrency overtakes BTC and conquers the world.  I really don't know, but I'll be paying close attention to this market, and buying more bitcoins over time as part of my VP.

Kshartle wrote:

edsanville wrote: I do value bitcoins

What is it about them that you value?

I value them because:

1. They are limited in supply, I trust no one can print more of them at will, so the value will be kept.
2. The extra supply will go down over time and become zero, so even better than gold that continues to be mined, so the value will actually go up over time.
3. I can pay someone anywhere in the world, within minutes, with no transactions costs, any amount.
4. I can hold them and store them myself, I don't need to trust anyone.
5. I can own them anonymously, and pay anonymously.
6. If necessary I can hide them in my brain and take them across borders.

above US$600. Maybe it's time to stop giving those away, Marc, and start buying Amazon gift cards.

edsanville,

I appreciate the thoughts and comments, it took some effort. I hope everyone realizes that disagreements about this stuff are not personal attacks. People get extremely defensive when their ideas are challenged and that's normal but it's too bad when it happens.

I agree with plenty of your comments. What I didn't get from it though is what you actually value about a bitcoin, just that you do. I haven't heard from anyone yet as to why they value a bitcoin...just that they do.

Being able to exchange them can't make them valuable. I can exchange a jar of poop but that doesn't make it valuable.

Being scarce can't make them valuable. I can grab a bunch of crayons and litterly scribble a 100% unique "painting". It wouldn't just be scarce...it would be completely unique. It would still be worthless.

The fact that it has a price does not give it value. If I own a t-shirt shop and I mark up all the shirts from $10 to $1,000 they are not 100 times more valuable. 

The fact that it costs a lot to create one does not give it value. It costs a lot of money to get ice cubes from the North Pole. Now....you might be able to sell them for a little bit more to some people as a novelty, but you cannot make a viable business out of this becase the cost is much higher than the value (that is a 100% objective fact, no one is paying for North Pole ice cubes).

So what gives a bitcoin value? We know where the price comes from, that's different (see the t-shirt example for how price and value are different).

The examples above should prove conclusively that none of those characteristics convey value. What I am hearing from everyone (which is what I suspected) is that they believe more and more people will want bitcoins and will pay more for them in the future. This is 100% the greater fool theory. You should own them because people will want them more and more. But why would anyone want one in the first place? It's obvious that people want them. I get it. They want them and are paying for them. I think I know why. I want to hear from the people holding them why THEY want them. PS is the only one i think that really admitted it so far.....he listed two reasons that were essentially the same:

1. speculative purposes; I believe the price will continue to rise
2. in case it ever develops into a real stable currency, I want to have some already

People used shells as money in the past. They traded valuable stuff for something that was worthless. At some point they realized they were worthless and the people who traded valuable stuff for shells lost, just like the tulips. They were wrong to trade valuable stuff for something worthless.  When will people realize bitcoins are worthless? If they aren't worthless, what is there worth based on? We know why a car has value, why food has value, why gold copper and silver have value.........

Why does a bitcoin have value?

Marc wrote:There you go P2T

Thank you very much!

Yeah, the party has started already but you are still early. The masses have not yet joined so the best is yet to come. Prices will likely go from the current $500 to $5000 in already 1 year, $50,000 in 2 years, $500,000 in 3 years and may even overschoot to $5 million per coin.

It's so interesting that a friend called me the other day and said almost exactly the same thing.  Truth be told, I don't know enough about it yet to form an opinion, but I'm even now making my way through the links in this thread and other places, so the education has begun anew

Thanks again!

P2T

Marc wrote:

Kshartle wrote:

edsanville wrote: I do value bitcoins

What is it about them that you value?

I value them because:

1. They are limited in supply, I trust no one can print more of them at will, so the value will be kept.

Supply is one factor of price....but not value. Something is not valuable because it's scarce...or expensive.

• The extra supply will go down over time and become zero, so even better than gold that continues to be mined, so the value will actually go up over time.

Same comment about supply not being a factor in deriving value....just price.

• I can pay someone anywhere in the world, within minutes, with no transactions costs, any amount.
• I can hold them and store them myself, I don't need to trust anyone.

I can hold and store a jar of poo. Does that make it valuable?

• 
  I can own them anonymously, and pay anonymously.
• If necessary I can hide them in my brain and take them across borders.

You can own them and take them with you....ok, but what do you actually own? Do you actually have anything of value? Even a tulip was at least nice to look at or smell. When you own a bitcoin....what do you actually own?

If you expected the price of bitcoin to fall (just imagine that for a moment.....), would you want to own any?[/list]

Kshartle wrote:That is true. My question is why?

Because other people value them as well. Yes, this is circular, I know, but that does not make it less true.

Rien wrote:

Kshartle wrote:That is true. My question is why?

Because other people value them as well. Yes, this is circular, I know, but that does not make it less true.

Of course, KShartle is talking about intrinsic value — not extrinsic value.

I totally agree that a currency doesn't need to have intrinsic value. Sea shells, cuneiform receipts and clay tokens have acted as currency long before gold ever did. They had no intrinsic value, but people valued them because they represented labor or goods.

And of course, the reason it's impossible to "value" a bitcoin is because it has no intrinsic value. And that enables speculative bubbles:

Wikipedia.org wrote:An economic bubble (sometimes referred to as a speculative bubble, a market bubble, a price bubble, a financial bubble, a speculative mania or a balloon) is "trade in high volumes at prices that are considerably at variance with intrinsic values".

Source: http://en.wikipedia.org/wiki/Economic_bubble

Now, just because something is a "mania" doesn't make it a bad speculation...

Joe Weisenthal wrote:I want to be clear that saying something is a bubble is not saying it will go down. It could go to $500 or $1000 or $10,000. That's the nature of manias.

But make no mistake, Bitcoin is not the currency of the future. It has no intrinsic value.

Now this idea of "intrinsic value" when it comes to currency bothers people, and Bitcoin Bugs will immediately ask why the U.S. dollar has intrinsic value. There's an answer to that. The U.S. Dollar has intrinsic value because the U.S. government which sets the laws of doing business in the United States says it has intrinsic value. If you want to conduct commerce in the United States you have to pay taxes, and there's only one currency you're allowed to pay taxes in: U.S. dollars. There's no getting around this fact. Furthermore, if you want to use the [US] banking system at all, there's no choice but to use U.S. dollars, because that's the currency of the Fed which is behind the whole thing.

On top of all these laws requiring the U.S. dollar to be used, the United States has a gigantic military that can force people around the world to use dollars (if it came to that) so yes, there's a lot of real-world value behind greenbacks.

Bitcoin? Nada. There's nothing keeping it being a thing. If people lose faith in it, it's over.

Source: http://www.businessinsider.com/bitcoin- ... ns-2013-11

I think Bitcoin is a relatively inexpensive way to speculate on what could end up being one of the largest manias on the planet because Bitcoin has no intrinsic value.

Gumby wrote: Of course, KShartle is talking about intrinsic value — not extrinsic value.

  I'm trying to totally stay away from intrinsic value since it's a much much more difficult and less well undertood concept. Bitcoins have no "extrinsic" value. You can't use them for anything. All you can do with them is trade them back and forth. As far as I can tell they have no acutal use....they are just passed back and forth.

Food has extrinsic value, clothes do, cars do, even gold and silver do. Bitcoins do not.

Kshartle wrote:

Gumby wrote: Of course, KShartle is talking about intrinsic value — not extrinsic value.

  I'm trying to totally stay away from intrinsic value since it's a much much more difficult and less well undertood concept. Bitcoins have no "extrinsic" value. You can't use them for anything. All you can do with them is trade them back and forth. As far as I can tell they have no acutal use....they are just passed back and forth.

Food has extrinsic value, clothes do, cars do, even gold and silver do. Bitcoins do not.

I could be wrong, but I thought the idea of extrinsic value is that it's mostly in the eye of the beholder. For instance...

Investopedia.com wrote:A piece of residential real estate would have intrinsic value based on factors such as its age, condition, square footage and location. The fact that it is the seller's childhood home is part of the home's extrinsic value, and will not be factored into the price a buyer will pay for the home. In this situation, the extrinsic value of the home cannot be conveyed to any buyer except, perhaps, another family member.

Source: http://www.investopedia.com/terms/e/extrinsicvalue.asp

So, for a Bitcoin holder, the Bitcoin makes them feel all warm and fuzzy inside for reasons they can't put into words. And they can be occasionally exchanged for nerdy computer parts and maybe a drink somewhere. Wouldn't that be extrinsic value?

Gumby wrote:

Wikipedia.org wrote:An economic bubble (sometimes referred to as a speculative bubble, a market bubble, a price bubble, a financial bubble, a speculative mania or a balloon) is "trade in high volumes at prices that are considerably at variance with intrinsic values".

Source: http://en.wikipedia.org/wiki/Economic_bubble

Now, just because something is a "mania" doesn't make it a bad speculation...

Joe Weisenthal wrote:I want to be clear that saying something is a bubble is not saying it will go down. It could go to $500 or $1000 or $10,000. That's the nature of manias.

But make no mistake, Bitcoin is not the currency of the future. It has no intrinsic value.

Now this idea of "intrinsic value" when it comes to currency bothers people, and Bitcoin Bugs will immediately ask why the U.S. dollar has intrinsic value. There's an answer to that. The U.S. Dollar has intrinsic value because the U.S. government which sets the laws of doing business in the United States says it has intrinsic value. If you want to conduct commerce in the United States you have to pay taxes, and there's only one currency you're allowed to pay taxes in: U.S. dollars. There's no getting around this fact. Furthermore, if you want to use the [US] banking system at all, there's no choice but to use U.S. dollars, because that's the currency of the Fed which is behind the whole thing.

On top of all these laws requiring the U.S. dollar to be used, the United States has a gigantic military that can force people around the world to use dollars (if it came to that) so yes, there's a lot of real-world value behind greenbacks.

Bitcoin? Nada. There's nothing keeping it being a thing. If people lose faith in it, it's over.

Source: http://www.businessinsider.com/bitcoin- ... ns-2013-11

I think Bitcoin is a relatively inexpensive way to speculate on what could end up being one of the largest manias on the planet because Bitcoin has no intrinsic value.

Joe is close here and I agree with what he's "trying" to explain here. But he's wrong when he says the dollar has intrinsic value. It doesn't. He doesn't understand the meaning of the word. It has value by FIAT. Value by FIAT is the opposite of intrinsic value. FIAT money has value in spite of the fact it's intrinsically worthless. The lack of intrinsic value is what BTC and USD have in common.

Dollars actually have more extrinsic value because if you get a paper version you can make an airplane, start a fire, measure stuff with it......

• Kshartle wrote:

  Marc wrote:

  Kshartle wrote: What is it about them that you value?

  I value them because:
  

  1. They are limited in supply, I trust no one can print more of them at will, so the value will be kept.

  Supply is one factor of price....but not value. Something is not valuable because it's scarce...or expensive.

  • The extra supply will go down over time and become zero, so even better than gold that continues to be mined, so the value will actually go up over time.

  Same comment about supply not being a factor in deriving value....just price.

  • I can pay someone anywhere in the world, within minutes, with no transactions costs, any amount.
  • I can hold them and store them myself, I don't need to trust anyone.

  I can hold and store a jar of poo. Does that make it valuable?

  • 
    I can own them anonymously, and pay anonymously.
  • If necessary I can hide them in my brain and take them across borders.

  You can own them and take them with you....ok, but what do you actually own? Do you actually have anything of value? Even a tulip was at least nice to look at or smell. When you own a bitcoin....what do you actually own?

  If you expected the price of bitcoin to fall (just imagine that for a moment.....), would you want to own any?

[/quote]


Yes, many times have I expected prices to fall, sometimes very hard, yet I always held minimum half of my coins, independent of price expectation.

I do the same for gold. I always have some, independent of price expectation. I do the same for cash, bonds and stocks by the way. They all can prove to be very valuable later on, against all expectation.

Kshartle wrote: Joe is close here and I agree with what he's "trying" to explain here. But he's wrong when he says the dollar has intrinsic value. It doesn't. He doesn't understand the meaning of the word. It has value by FIAT. Value by FIAT is the opposite of intrinsic value. FIAT money has value in spite of the fact it's intrinsically worthless. The lack of intrinsic value is what BTC and USD have in common.

Correct. Well said.

Gumby wrote:

Kshartle wrote:

Gumby wrote: Of course, KShartle is talking about intrinsic value — not extrinsic value.

  I'm trying to totally stay away from intrinsic value since it's a much much more difficult and less well undertood concept. Bitcoins have no "extrinsic" value. You can't use them for anything. All you can do with them is trade them back and forth. As far as I can tell they have no acutal use....they are just passed back and forth.

Food has extrinsic value, clothes do, cars do, even gold and silver do. Bitcoins do not.

I could be wrong, but I thought the idea of extrinsic value is that it's mostly in the eye of the beholder. For instance...

Investopedia.com wrote:A piece of residential real estate would have intrinsic value based on factors such as its age, condition, square footage and location. The fact that it is the seller's childhood home is part of the home's extrinsic value, and will not be factored into the price a buyer will pay for the home. In this situation, the extrinsic value of the home cannot be conveyed to any buyer except, perhaps, another family member.

Source: http://www.investopedia.com/terms/e/extrinsicvalue.asp

So, for a Bitcoin holder, the Bitcoin makes them feel all warm and fuzzy inside for reasons they can't put into words. And they can be occasionally exchanged for nerdy computer parts and maybe a drink somewhere. Wouldn't that be extrinsic value?

No.

From wiki - "Instrumental value (or extrinsic value, contributory value) is the value of objects, both physical objects and abstract objects, not as ends-in-themselves, but as means of achieving something else. It is often contrasted with items of intrinsic value."

When something has extrinsic value it has some use...it acheives something. Food is the obvious example...it's valuable because it satisfies our hunger and keeps us alive. A car has extrisinc value because it gets us from point A to point B fast and in comfort.

What does a bitcoin do? As far as I can tell they don't do anything, you just trade them back and forth. So there's no intrinsic value or extrinsic.

Kshartle wrote:No.

From wiki - "Instrumental value (or extrinsic value, contributory value) is the value of objects, both physical objects and abstract objects, not as ends-in-themselves, but as means of achieving something else. It is often contrasted with items of intrinsic value."

When something has extrinsic value it has some use...it acheives something...What does a bitcoin do? As far as I can tell they don't do anything, you just trade them back and forth. So there's no intrinsic value or extrinsic.

The "extrinsic" value of a Bitcoin is simply that it is a medium of exchange (like poo in a jar or shells). What it achieves is a purchase of goods/services as long as some idiot is willing to accept it.

See: The Daily Paul: Bitcoin Debate: the Lack of Intrinsic Value

JixMainstream wrote: According to Wikipedia, "[Extrinsic] Value" is the value of objects (...) not as ends-in-themselves, but as means of achieving something else. For gold, this EV is in its properties of being a good medium of exchange. Said another way, people are willing to pay MORE than the IV of gold BECAUSE of its EV!

Source: The Daily Paul: Bitcoin Debate: the Lack of Intrinsic Value

Gumby wrote:

Kshartle wrote:No.

From wiki - "Instrumental value (or extrinsic value, contributory value) is the value of objects, both physical objects and abstract objects, not as ends-in-themselves, but as means of achieving something else. It is often contrasted with items of intrinsic value."

When something has extrinsic value it has some use...it acheives something...What does a bitcoin do? As far as I can tell they don't do anything, you just trade them back and forth. So there's no intrinsic value or extrinsic.

The "extrinsic" value of a Bitcoin is simply that it is a medium of exchange (like poo in a jar or shells). What it achieves is a purchase of goods/services as long as some idiot is willing to accept it.

That doesn't explain why people value it. Something doesn't have value because you can trade it.....you can trade anything. Being able to transfer ownership of something doesn't make it valuable, you can transfer ownership of anything.

When I trade A to get B I am literraly handing over ownership of A. I am saying......."here, you have A, I prefer B". The act of me handing over A, and preferring B does not and cannot give A value".

The ability of something to be given away (as Marc has done here), or traded away, as PS did for that shirt......is not an accomplishment of that something. It's just a transfer of ownership. The bitcoin hasn't done anything because it can't do anything. You can't look at, can't use for anything, it does nothing. It just passes from one person to another without ever doing anything of value to anyone. I can give you a jar of poo, and I can sell you one.

Neither of those actions constitute the poo doing anything other than passing from me to you and neither of them make the poo valuable. - Does anyone disagree? I am willing to test this theory out.

Kshartle wrote:That doesn't explain why people value it. Something doesn't have value because you can trade it

Well, let's turn the question around. What is it about the extrinsic value of gold that makes it more valuable than its intrinsic properties? Isn't it that it's just an alternative currency?

Gumby wrote:

JixMainstream wrote: According to Wikipedia, "[Extrinsic] Value" is the value of objects (...) not as ends-in-themselves, but as means of achieving something else. For gold, this EV is in its properties of being a good medium of exchange. Said another way, people are willing to pay MORE than the IV of gold BECAUSE of its EV!

Source: The Daily Paul: Bitcoin Debate: the Lack of Intrinsic Value

Gold's EV is based on what it can be used for (to make jewelry, conduct electricity, fillings etc.)

The market price is much higher that the EV because of it's IV. We know this because far far more gold is stored than consumed. If the price of gold was much lower it would all get consumed. It's too valuable to consume it all due to the IV.

This guy has it completely backasswards. 

Gumby wrote:

Kshartle wrote:That doesn't explain why people value it. Something doesn't have value because you can trade it

Well, let's turn the question around. What is it about the extrinsic value of gold that makes it more valuable than its intrinsic properties? Isn't it that it's just an alternative currency?

It's intrinsic value is higher than the extrinsic value (utility value, what you can do with it). That's why it's not all used up but instead stored.

Transferring ownership of something is not actually using it.

If we pass a peice of food back and forth for days until it rots did we ever actually use it?

If we transfer the title of a car back and forth but never actually drive it did we use it?

What about the value of enabling people to easily hedge one's exposure to fiat currencies?

What about the value of the bitcoin network?

Bitcoin Wiki wrote: While historically intrinsic value, as well as other attributes like divisibility, fungibility, scarcity, durability, helped establish certain commodities as mediums of exchange, it is certainly not a prerequisite. While bitcoins lack 'intrinsic value' in this sense, they make up for it in spades by possessing the other qualities necessary to make it a good medium of exchange, equal to or better than commodity money.

Another way to think about this is to consider the value of bitcoin the global network, rather than each bitcoin in isolation. The value of an individual telephone is derived from the network it is connected to. If there was no phone network, a telephone would be useless. Similarly the value of an individual bitcoin derives from the global network of bitcoin-enabled merchants, exchanges, wallets, etc... Just like a phone is necessary to transmit vocal information through the network, a bitcoin is necessary to transmit economic information through the network.

Source: https://en.bitcoin.it/wiki/Myths#Bitcoi ... _things.29

I think you'd have to admit that one can find some kind of nebulous "value" in the Bitcoin network, as a whole, even though the Bitcoin itself has no intrinsic value.

Something doesn't need intrinsic value to function successfully as money. The USD clearly demonstrates this. When something is bartered....it is performing the function of money (medium of exchange / store of value). Canned goods don't have intrisic value. They aren't ends unto themselves, they only have extrinsic or utility value (you can eat what's inside, maybe use the can to store something). They can be used as money even though they have no intrinsic value because they have extrinsic value. The point is they have value.

In "How you can profit from the coming devaluation", chapter 2 What is Money?, Browne describes 4 attributes make gold and silver good money....

1. Durable
2. Convenient
3. Easily divisible
4. Consistent in quality

He then wrote "for short periods in history, each of these four rules has been violated by various commosities that still managed to serve adequately as money. But for a commodity to suffice as money...a fifth attribute is absolutely neccessary. For we are talking about human beings whose futures and securities are at stake. And they won't produce and exchange unless they believe it will lead ultimately to something useful.

This means that the individual must be confident that what he is receiving today will be exchangable tomorrow. And how can he be sure of that?

5. The commodity must have accepted VALUE. It must be usable and accepted for a non-money purpose before it can serve as money. Only then can the reipient be sure he isn't receiving a white elephant.

He then goes on to describe some uses of gold and why we know people will always want it.

Notice how the first four items, which have been presented throughout this thread as reasons for bitcoins value, are kept entirely separate from the 5th requirement of accepted value? That is because those things do not convey value. Bitcoins don't have value for any of those reasons. As Gumby has correctly pointed out they aren't even serving as money right now except in a very limited sense. The price is being driven up by speculating and hoarding. How high will it go? There's absolutely no telling.

Ehhh....sorry for beating a dead horse guys. I had given myself the project for 2014 to make a decision on whether or not I should own bitcoins. This thread has really helped cement the decision to not trade anything of value for them since they appear completely worthless (though certainly not free )

Good luck to all on your bets....obviously it has been working out fantastic so far and I hope you all buy low and sell high.

Gumby wrote: What about the value of enabling people to easily hedge one's exposure to fiat currencies?

What about the value of the bitcoin network?

Bitcoin Wiki wrote: While historically intrinsic value, as well as other attributes like divisibility, fungibility, scarcity, durability, helped establish certain commodities as mediums of exchange, it is certainly not a prerequisite. While bitcoins lack 'intrinsic value' in this sense, they make up for it in spades by possessing the other qualities necessary to make it a good medium of exchange, equal to or better than commodity money.

Another way to think about this is to consider the value of bitcoin the global network, rather than each bitcoin in isolation. The value of an individual telephone is derived from the network it is connected to. If there was no phone network, a telephone would be useless. Similarly the value of an individual bitcoin derives from the global network of bitcoin-enabled merchants, exchanges, wallets, etc... Just like a phone is necessary to transmit vocal information through the network, a bitcoin is necessary to transmit economic information through the network.

Source: https://en.bitcoin.it/wiki/Myths#Bitcoi ... _things.29

I think you'd have to admit that one can find some kind of nebulous "value" in the Bitcoin network, as a whole, even though the Bitcoin itself has no intrinsic value.

A network trading something that is worthless (though not free) doesn't convey intrinsic or extrinsic value. You still can't use the bitcoin for anything, you can just transfer ownership of it.

Meanwhile the price just hit $675. Holy moses!

Is anyone here considering selling any?

Looks like the government is starting to get involved.

http://www.ibtimes.com/bitcoin-goes-was ... es-1474094