[ur-whale]

> If I buy Bitcoin, what value-creating activity occurs that pays for my reward?

None. But then:

    1. You reasoning applies exactly to gold. Yet, people keep buying it. It's call supply and demand. Demand doesn't have to be grounded in anything rational. If it exists and the supply is limited, the price will go up.

    2. Bitcoin has never been about value creation. It's about *preserving* value, something the USD has been historically terrible at [1]

[1] https://www.in2013dollars.com/us/inflation/2000?amount=1

[ac29]

> You reasoning applies exactly to gold

About half of gold is used to make jewelry, and 10% is used in industry [per wikipedia]. If the demand for the remaining portion that is purchased as investments/speculation fell to zero, gold would still have value. If bitcoin's investment/speculation interest fell to zero, the price would also fall to zero (or close to it) - it doesnt really do anything else.

[ur-whale]

>About half of gold is used to make jewelry,

Jewelry, a really useful thing if there ever was one.

You're missing the point here, like all acolytes of the "intrinsic value" cult.

There is no such thing as intrinsic value, as much as most people like to sing themselves that lullaby.

There's is just one thing: supply and demand.

Where demand comes from, whether it is rational or irrational is completely irrelevant to the equation.

People want gold (who knows why, whether it's rational or not, and who cares), the supply is scarce (even though it's not limited) therefore it has value.

People want Bitcoin, the supply is finite, therefore it has value.

Add in the fact that it has some nice properties that gold doesn't have (e.g. easy to move and very hard to confiscate unless you're dumb enough to disclose your holdings) ... you get the price we have today.

People need air, therefore demand is strong. However, supply is - for all intent and purposes - infinite (a bit like the USD), therefore it has no value.

No such thing as intrinsic value.

Just supply and demand.

Econ 101.

[nootropicat]

>Jewelry, a really useful thing if there ever was one.

If people didn't care about their looks everyone would use plain color clothes. Gold jewelry also works as a status symbol. It definitely performs some utility that way. If gold had only speculative demand it would be long forgotten by now.

Nothing like that for bitcoin, it's purely speculative demand and to realize a profit you need another speculator to sell to, and the situation repeats. It's also inflationary and requires billions to run, generating losses, which mathematically guarantess that average bitcoin has negative EV. How do you know when to sell?

So far it only exists during the longest bull market in history, leaving many people and companies with a lot of paper wealth they don't know what to do with. If that situation ever ends, forcing people and companies to spend their financial reserves just to survive, purely speculative bubbles like bitcoin are going to collapse the most - as buyers disappear and many sellers appear.