[tptacek]

So, marketing? Ok! I'll just run a 2-for-1 sale on Flitcoin.

Less snarkily: why are people using Bitcoin? What's the intrinsic value they see in Bitcoin? Based on what evidence can they predict that Bitcoins purchased today will be convertible to gold, dollars, or even toenails at any valuation? You've begged the question.

[browep]

Here's a nice concrete example. You start a content/news blog/site. Instead of selling adspace you charge for your content by the pageview. Now how much are people willing to spend per pageview ? Probably not very much. Let's say < 1 cent. You start looking around for ways to charge people < 1 cent. Turns out it's ridiculous idea, no credit/online banking proposition is interested in < 1 cent transactions, it just doenst exist because of transactions costs. Hola Bitcoin. I can send you < 1 cent for every pageview I consume with 0 transaction costs.

The tools to do this are currently in the pipeline or are really not that hard to devise. This is what bitcoin offers that others don't. Forget anonymity or libertarian arguments, 0 transaction costs are extremely disruptive.

[tptacek]

This is an application of Bitcoin. It says, "well, people want something that promises what Bitcoin promises; therefore, Bitcoin must be intrinsically valuable". But it's obvious why that isn't true. Flitcoin promises precisely the same things.

[browep]

i'm not really worried about the intrinsic value of bitcoin, it goes up, it goes down, it doesn't matter. You don't have to store your wealth in bitcoin, USD goes in USD goes out when you want it to at usually 0.5% transaction cost ( or less some places ). And there's no reason Flitcoin can't succeed in the same places. I'm not sure why that would have anything to do with intrinsic value or why intrinsic value is of paramount importance.

[tptacek]

In other words, you're content to ride out the "greater fool" theory, confident that you'll be able to jump out before the market spirals down to zero. And that's fine, but it doesn't address the question that roots this thread.

[browep]

you can jump out whenever you get bitcoins. You don't have to hold onto bitcoins more than a few minutes after a transaction is confirmed. You can tie goods/service to the market rate and sell your bitcoins whenever you get them. It won't matter what the price is, $30 or $0.30. No fooling going on. And tell me again what the question is that roots this thread?

[wnight]

In other words, you're ignoring all problems about value transfer systems like gold and cash while assigning basic problems like that nobody trades food for gold when starving to BTC alone.

Gold for instance, seems to be a fool's buy, because there are few truly-useful non-technical things to do with it (you can't eat it) but actually works well as a basis for some value transfers. In a crash your bitcoins would depreciate wildly because nobody would part with anything of value for some bits - or a piece of paper - or some shiny metal.

This is just inherent in trading - there has to be a difference in value or the trade wouldn't happen, and if there's a difference in value the values may not relatively correspond at all points.

To some people, at some times, a token may be a useful marker in trade, as cash is now. With World of Warcraft healthy, there can be a good market in magic swords. With a healthy world economy, cash can be useful. When either fails, current holders will suffer. Gold will suffer differently, it won't be counterfeit or lost, but it won't be liquid. Ditto for BTC, they just become irrelevant relative to food.

Gold is anonymous, but can't practically be traded that way in large quantities. Cash is only pseudonymous like BTC as usually used - bills are scanned when dispensed and deposited. It's not globally visible, just to the most likely and well funded enemy - your own government.

It really seems like you should be harshing on representational value systems in general, or something.

[icebraining]

>You've begged the question.

No, you just asked a different question.

>What's the intrinsic value they see in Bitcoin?

Well, free transfers, for one, and not being subject to having your money frozen by online payment companies (e.g. Paypal).

[tptacek]

"Free transfers" isn't an intrinsic value of Bitcoin. It's a benefit you get by supposing that Bitcoin has some intrinsic value.

What's the intrinsic value? Why is Bitcoin unlikely to be worth $0 in 10 years? Because it is spectacularly unlikely that gold will be worth $0 in 10 years, and similarly unlikely that a dollar will be. Virtually any trader in the world would take the other side of that bet.

[icebraining]

Let me preface this by saying that I'm very ignorant about this subject.

>What's the intrinsic value? Why is Bitcoin unlikely to be worth $0 in 10 years?

Why does a currency require a value as anything other than a currency to be expect to have value?

Bitcoin offers a useful service. There's is no reason to believe this service will stop being useful in 10 years. Therefore, it's reasonable to expect a demand for Bitcoin in 10 years, making it worth more than $0.

>Because it is spectacularly unlikely that gold will be worth $0 in 10 years

Isn't most of gold's value based on its demand as a currency? If people stopped buying gold just to trade and store value, wouldn't current gold owners lose immensely?