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Comment by hotpockets | Hacker News Reader

but copper doesn't have value until it is used. Copper wires aren't useful just sitting around being copper.

Copper just sitting around has the intrinsic value of being copper, ledger entries do not. This is the meaning of intrinsic value.

In other words if copper stops being used as money it still holds value as copper. You can melt down the coins and make it into wire or pots or waterer else people buy copper to make. Economists argue that these types of things don't make good currency because then the currency is effected by unrelated things like the copper industry. One would not want an entire national economy to fluctuate in value due to the ebb and flow of one industry.

Sorry, I don't get it. If there were an easier way to obtain copper, the value of copper would fall. Likewise if a superior metal was found, copper's value would drop. This value doesn't sound very intrinsic. And my initial claim was not about whether something makes a good currency or not. I was claiming that that which imbues copper with value is basically the same thing that imbues bitcoins with value. Namely, their utility to people and being noncounterfeitable.

The fact that the value of copper changes is not relevant to it's intrinsic value. An item either has an intrinsic value or not, the price of that value doesn't really enter into it. Think of a dollar bill, it has a monetary value $1, but the paper itself has no intrinsic value. If we used the same paper with the same security features, but printed something different on it, it would be worthless.

The issue with a copper currency is that any actual unit of copper has intrinsic value, maybe very small, but it has it. A coper coin has the value of copper in it in addition to it's monetary value unlike a dollar bill or a bitcoin. An individual bitcoin has absolutely zero intrinsic value because an individual bitcoin is just a ledger entry in the bitcoin system.

What you are referring to that has value with respect to bitcoin is the entire bitcoin system, not an individual unit of that system. If we remove the monetary value of individual bitcoins they would have no value at all, just like the dollar bill, but exactly unlike copper.

Does that help?

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