I like bitcoin and gold, yet I don't think they have "intrinsic value". At least that's certainly not the main point. To me gold has no intrinsic value. It's just a metal. I can't eat it. I have on a personal level no use for it. It's terrible as a construction metal, I'm not interested in jewelry and there are probably many shiner alloys anyway. "Intrinsic value" is not the point, and I don't think money needs any such thing to be useful.
Money is a complex concept, but to me one of its functions is to be a tool for measuring value in economic exchanges. All other things being equal, the value of goods is inversely proportional to their amount. For instance if the amount of gold was suddenly multiplied by two, then the price of gold would drop by half.
Thus, to measure the value of goods, one needs to get an idea of its quantity. So you need to compare quantities. You thus need a fixed reference of quantity for comparison. Just as for measuring say length you need an object of fixed length somewhere to use as a reference.
That's why bitcoin proponents often also like gold : they are attracted by the idea of a fixed amount of money.
By contrast, most central banks pilot the amount of money in circulation in order to try to keep the price of goods stable. This is, imho, as absurd as changing the length of the meter because we've noticed that generations after generations people are getting taller and taller.
When prices vary, this is supposed to have a meaning in the economical sense. Prices are economical signals. Tempering with them defeats their purpose.
>By contrast, most central banks pilot the amount of money in circulation in order to try to keep the price of goods stable. This is, imho, as absurd as changing the length of the meter because we've noticed that generations after generations people are getting taller and taller.
Indeed, and this is why central banks are counter productive to automation.
The two primary goals of the Federal Reserve are to maintain stable prices and achieve maximum employment, despite the fact that automation is making goods and services better, faster, and cheaper and designedly eliminating the need for human labor.
Money is a complex concept, but to me one of its functions is to be a tool for measuring value in economic exchanges. All other things being equal, the value of goods is inversely proportional to their amount. For instance if the amount of gold was suddenly multiplied by two, then the price of gold would drop by half.
Thus, to measure the value of goods, one needs to get an idea of its quantity. So you need to compare quantities. You thus need a fixed reference of quantity for comparison. Just as for measuring say length you need an object of fixed length somewhere to use as a reference.
That's why bitcoin proponents often also like gold : they are attracted by the idea of a fixed amount of money.
By contrast, most central banks pilot the amount of money in circulation in order to try to keep the price of goods stable. This is, imho, as absurd as changing the length of the meter because we've noticed that generations after generations people are getting taller and taller.
When prices vary, this is supposed to have a meaning in the economical sense. Prices are economical signals. Tempering with them defeats their purpose.