[gitfan86]

People can and do speculate on collectables. The difference is that there is underlying value in the collectable. There are people who would like to own a Babe Ruth signed baseball just because it is a unique piece of sports history and have no plan to sell the baseball when the price goes up.

Speculation on that asset can make the price go up far above the underlying value. But that comes at a high risk of the price falling down to the underlying value. For crypto this underlying value is basically zero.

[darkteflon]

If only I had a dime for every time someone on HN unironically threw around the term “underlying value” like it meant something they could build an argument off.

[chowchowchow]

You don’t believe in any concept of utility relating to value? You’d argue that a house has no underlying value due to location and comforts?

[darkteflon]

I think a house has “value” related to utility.

I also think the putative concept of “underlying value” - always defined in opposition to some other form of value the speaker is railing against - is a lazy rhetorical crutch that provides nothing of analytical value to a discussion.

Every time these crypto threads come along we have tens of people drawing this same distinction and hordes of software engineers nodding along in agreement like it’s actually a thing. It’s not a thing. At least, not the way it’s deployed here.

Usually I just ignore it but it’s beginning to pass into accepted wisdom through sheer repetition.

[chowchowchow]

So to me it sounds like you do acknowledge the concept of underlying value. A house has utility, it is scarce, there is competition for it, ergo its value is a function of demand for the asset (aka a proxy for the utility of owning the asset). This can be extrapolated to other assets besides houses. Unclear if it can be to crypto, it’s sort of you believe or you don’t on that one. I think that’s what people mean when they say it has no underlying value.

TLDR scarcity + utility is where value comes from. Crypto really only has scarcity arguing for it. Much like collectibles actually.

[darkteflon]

There’s just “value”. People use the term “underlying value” as a proxy for “real value”, in opposition to “not real value”. You can verify that by looking at any example of its use in this thread.

I’m saying it’s a rhetorical crutch that doesn’t lead to meaningful discussion or insight.

If people acknowledged in these threads that “value” is way more complex and nebulous than these facile comparisons make it out to be, we’d have more interesting discussion.

[chowchowchow]

I think it’s clear people are distinguishing value based purely on speculation in a scarce asset and value based on demand (and still maybe speculation) for some underlying good which has utility. Be that a house, a car, or stock of a SaaS business, a retail operation, whatever.