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by peterjlee 3074 days ago
Anything can have "value" if someone is willing to pay for it. The US dollar is just a piece of paper if nobody is willing to exchange anything for it. Cryptocurrency has value because some speculator is willing to pay for it because they think it'll be worth more in the future.
1 comments

Price != Value

"Price is what you pay, value is what you get." Warren Buffett

You have use value and exchange value.

Exchange value is most often price, but it is in reality the vector of the equivalent amount of goods and services you will receive for a unit of some good or service.

The point of money is that it collapses all exchange values to two vectors, one for selling to money, one for buying with money.

The downside of money is that it hides many very obvious relationships. In a topical case, that the cost of video cards has essentially stayed constant when expressed as etherium units.

tl;dr: money lets you calculate prices as n, exchange values needs n^2.