# Last edited on 2014-02-04 21:32:56 by stolfilocal # Reply to "Gideon Greenspan" # Not sent # Re: Intrinsic value of bitcoins Dear Gideon, thanks for the reply. However, you write: > [ Gideon Greenspan:] > So the blockchain can be used > as a kind of decentralized notarization service and bitcoin is the > currency that one needs to use this service. But that is also true for the roster of shareholders maintained by a company. It too is a sufficiently reliable proof that someone owns or owned a share of that company at a specific time. Like the blockchain, the shareholder's roster makes it possible to use shares as a payment method, since it prevents double spending, stealing, etc. The company's stock is then the the currency one needs to use that service. Indeed, company shares *are* often used as means of payment, e.g. as employee bonuses, in mergers, etc. Yet the utilitarian value that the shares of a company derive from their potential use as a means of payment is never counted as an "asset" of *the company*. It is part of the market value of *the shares*, which is never counted as an asset either. Consider the hypothetical Zeron Corp., that has no buidings, cash, or stockpiles, no products, services, or customers, and pays no dividents --- but issued 21 million shares for free on its IPO, solely for the purpose of them to be used as means of payment. Even if Zeron's shares acquire a market value and are used for payments, analysts will still say that the company has no assets, and that its shares have no intrinsic value. So the claim that "bitcoins have no backing asset or intrinsic value" is not a myth, but an undeniable fact, given the well-established meaning of those words. Bitcoins may still have lasting market value or currency value, but to answer that criticism one must justify how this will occur *in spite of* them having no intrinsic value, rather than trying to deny this fact or redefine the term. Currencies with no intrinsic value are not unheard of, but I do not know whether there are any examples which were clear and lasting successes. Finding such examples may be a way of answering that criticism. On a broader level, it worries me that the Wiki seems to be rather one-sided. It seems intent on convincing people that Bitcoin will succeed, rather than providing a neutral view of it. For instance, all the entries in the "Myths" section are rebuttals to criticisms. What about mythical virtues - untrue positive statements that are still being used to lure investors? For example: * Goernments cannot Perhaps one should use colored backgrounds, say drab gray for negative statements, warm pink for positive ones. That might help keeping a fair balance between the two. 8-) All the best, --stolfi -- Jorge Stolfi Full Professor/Professor Titular Instituto de Computação/Institute of Computing UNICAMP