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42 sats \ 25 replies \ @fourrules OP 19h \ parent \ on: What bitcoin taught me: Value is not subjective econ
But I'm limiting to those 4 traits, as in what humans value always reduces down to those fundamentals, in all contexts, and therefore an individual can literally be wrong in their subjective evaluation of something. There is an accounting for taste.
Nobody agrees with me on this, especially not libertarian Bitcoiners.
Take make-up as an example. Its a deception, like Tungsten, because it imitates qualities that held evolutionary value. People can be fooled, but underneath is always something real and stable that they are desiring.
Beauty is derivative of the 4 principles that make up proof of work.
I'd have to think about it more to know if I disagree with your categories, but from the standpoint of economic theory it's still in the Subjective Value framework.
From a libertarian perspective, I'd say "So what?" It doesn't change anything about when it's ok to use violence against someone.
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Maybe my comment about libertarians was misplaced, but I think temperamentally they feel that value is emergent based upon consensus, as in there is nothing to value beyond an aggregate of the price that the market is willing to pay.
I'm saying the market is not efficient and can be wrong, that there is actual value underpinning commodities and 'things' in the world that is determinate beyond people's perceptions, and the only question is how long it takes for the market to catch up.
In the words of WSB, "we can stay irrational for longer than you can stay solvent".
This is true, but when people talk about fundamentals or intrinsic value, even if they don't know it, they are talking aspects of tokens or units of things that are ground in, or derived from, some form of proof of work, and bitcoin is objectively the highest value token because it technically meets the criteria most efficiently.
If everyone magically forgot about bitcoin tomorrow then something with the exact same qualities of bitcoin would emerge, maybe more or less efficiently, turbulently, but inevitably.
This doesn't fall within the subjective value framework.
I can be even more esoteric to illustrate my point: the four principles are the foundation of the monomyth:
- fight the dragon (challenge)
- get the gold or tooth (verification)
- as a shepherd or everyman
- alone
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Again, there can be reasons things are valued by people without refuting subjective value theory. And, whatever those reasons are will have implications for the kinds of properties that end up filling market demands.
I don't know about whether there's a tendency amongst to feel like value is emergent and based on consensus. That wouldn't be correct.
When we say that things are "worth what their purchaser will pay", that's not a statement about market prices. In fact, it's upstream of market prices. All we know from market prices is that purchasers value their purchases at least as much as the other uses of that amount of money and non-purchasers value non-purchased goods less than the other uses of that money (assuming they have enough of it). It doesn't mean anything about some true value of the good.
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When in doubt zoom out.
You can get a glimpse at objective value by looking at long term terrorism trajectories.
Invariably it seems, when the long-term trajectory of prices change (accelerating in the same direction, or reversing direction), as happened in 1971, it's because something fundamental changed.
This doesn't sound like a profound statement by itself, it's obvious, the criteria I'm describing are what all of those value changes reduce to, universally.
If you introduce a third party the value goes down. If something becomes easier to extract or create, the value goes down. If it's easier to fake the value goes down. If something cannot be owned by specific groups the value goes down.
But our entire modern civilization is built on the aggregation of revealed preferences, which is a completely different theory of value.
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To the point @kepford made, you already admitted that you're talking about Subjective Value in the way economists use it, which was my initial comment, but you're proceeding to act as though there's a non-existent disagreement.
If you introduce a third party the value goes down. If something becomes easier to extract or create, the value goes down.
No. The price goes down, which means it became available to people who value it less and weren't previously buying it. Value is what an individual is willing to pay, not what the market actually charges.
On a supply and demand graph, the price goes down because the supply curve shifts outward, while the demand curve remains fixed. The demand curve is the one reflecting people's values.
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I'm saying value doesn't come from subjective opinions. I never admitted that I was using the word value as economists use it, because they tie themselves in knots and contradictions by assuming what you just said.
Value is what an individual is willing to pay
Price signals can communicate fundamental changes to the underlying value, the reality, the objective value. An introduction of a third party objectively devalues the thing intrinsically.
Bitcoin is objectively valuable because of it's objective properties, that's why it's possible to speculate reliably on its future value, as opposed to betting on a horse race.
Demand follows the objective properties, from which the value is derived, supply and demand determine current price.
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Given the subject of this conversation, it's quite ironic that you subjectively feel that you didn't admit something that you objectively did admit.
I am an economist and my first comment to you was that you are describing subjective value, as we understand and use the term in economics: i.e. each individual gives different weight to different properties. Unless you are going to argue that everyone values everything to an identical degree, you are in alignment with subjective value theory.
An introduction of a third party objectively devalues the thing intrinsically.
What third party are you talking about? I think I already addressed this and you added nothing new here.
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Fiat is a system based upon privileges and regulations governed by a hierarchical system with a centralised authority. Its not completely centralised, but it is a third-party, distinct from a security only in the complexity of the issuance.
In other words it's a system that relies on a counterparty to function. Commodity money hit limitations as it tried to adapt to the pace of modern economies, as Lyn Alden explains clearly. The pragmatic solution was to introduce an intermediary to verify that the commodity backing the paper existed. In other words, at the scale of commerce and the velocity of the money the verification became too expensive for the monetary system in place. To reduce the cost of verification they introduced a third-party: that's called a trade-off.
In 1971 they cut the cord and the shared fiction dissolved, sending the monetary system into free-fall, dependent upon the issuance of new currency to back the previously issued currency, loans collateralising loans, turtles all the way down, which in any other context is called a ponzi scheme.
Its hard to imagine any other solution given the game theory of competing states trying to rape their citizens the hardest by debasing their currency, but nobody said humanity had it's shit together.
Nobody agrees with me on this, especially not libertarian Bitcoiners.
It is interesting to openly state that nobody agrees with something you say and still think you are in the right. I'm far from a joiner or anyone that feels pressure in being in the out group. I am often the only one with a view in a small group but my views align with many people in history and people more knowledgeable in the areas I may discuss.
Most of the time, if no one agrees with you on something(and I mean no one) either you are wrong or you are not really understanding or being understood. This sounds like the former. I agree with @Undisciplined. It sounds like you are NOT disagreeing with subjective value. You are using slightly different words to describe it and just saying you disagree.
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I don't think agreement has anything to do with accuracy.
If we're talking about aligning with historical consensus then I think my view is the dominant view across pre-modern history, although it wasn't really possible to articulate and they didn't have the examples of digital technology.
In general you are just side stepping my proposition and pretending to engage without saying anything about it. At least @Undisciplined sounds like they're engaging in good faith.
I'm not describing subjective value, I'm describing the properties of objective value, in contrast to subjective value.
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I'm not describing subjective value, I'm describing the properties of objective value, in contrast to subjective value.
Then I misunderstood you.
Seems as if you were to me. I'm just saying it doesn't sound like you are disagreeing with most bitcoiners to me at all.
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But your title says "value is not subjective". You just said you are contrasting objective value with subjective value. Do you see why that is confusing. You said no one agrees with you and yet when I read your post that statement seemed absurd.
It sounds to me as if you just rephrased the two types of value and then claim this is a view that isn't common. Seems like making difference where there isn't one.
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Fair point, subjective value is an opinion, objective value is what something is actually worth, even if nobody alive is willing to pay that price today.
Edit: People in the modern world do not believe, in general, that there is such a thing as objective value, beyond price.
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Indeed. How you measure value? How do you know your value is the objective one?
The bigger question is this framework useful? To say something has an objective value is one thing. Easier case to make. Value is not obvious sometimes.
I believe bitcoin has objective value but that doesn't help others. Just me.
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I don't think it's a matter of belief. Bitcoin fulfils these criteria therefore it's objectively valuable, inevitable.
Using this framework in any other context is extremely difficult because outside bitcoin the world is full of noise and obscurity and opacity. I don't think I'm saying anything novel, people use this framework in all of their value judgments innately, it's just complex.
But bitcoin is certain because it's pristine.
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Through your own rational judgment. I don't have to look at the current market price to value BTC. I can observe the mechanics of how BTC works in relation to the macro economy and decide for myself what a reasonable price should be, then buy or sell based on whether the market price is above or below my price. Reality tends to reward people that do the work of determining value, while punishing the people who wait for others to do the valuation for them.
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Bitcoiners value bitcoin, but they refused to see the connection between it and historical systems that progressively emerged based upon the same properties, whether stone henge or mythological representations.
They don't see bitcoin within it's proper historical context because that conflicts with their other priors, other modern ideas that they have heavily invested in.