'Intrinsic value' meaning 'objective value' is a useless concept because all value is subjective.
What I think people generally mean when they say 'intrinsic value', especially when talking about currencies, is something more like 'having some uses other than to simply trade away again to someone else, or perhaps being backed by something which has intrinsic value'.
Dollars have intrinsic value according to that definition, because they are backed by the fact that there are many people who must give the US government dollars in order to avoid being prosecuted for non-payment of taxes. That's where taxes come in. Without taxes, and perhaps some other things like legal tender laws, dollars would have no 'intrinsic value' according to this definition, just like BTC.
Both USD and BTC could still have value, even if they don't have 'intrinsic value' according to that definition.
In that case, no currency has intrinsic value. If we went back to the days where I'd trade you 2 bags of rice for a fish, those things have value and other use.
Why does everyone fall back to the default argument that the USD is "backed" by the US govt. It is in theory but what does it really mean? The USD is no longer backed by physical gold. If the world decided the USD was useless tomorrow, does "backed" mean you walk up to Capitol Hill and they will give you something in exchange for your dollars? Unlikely IMO. It's backed by debt that the Fed just creates out of thin air. All this talk about "intrinsic value" is nonsense.
I just gave you my definition of intrinsic value and explained exactly why the dollar has intrinsic value according to that definition. If you want to argue that what I said was wrong, you can either prove my definition is contradictory or useless, or you can prove the dollar doesn't fit the definition that I gave. Simply stating 'no currency has intrinsic value' suggests to me you didn't read, or didn't comprehend, my comment.
>If we went back to the days where I'd trade you 2 bags of rice for a fish, those things have value and other use.
Yes, so according to the definition of 'intrinsic value' that I gave, they have intrinsic value.
>If the world decided the USD was useless tomorrow, does "backed" mean you walk up to Capitol Hill and they will give you something in exchange for your dollars? Unlikely IMO.
'Backed' means the IRS is going to accept dollars in exchange for not prosecuting you for non-payment of taxes. That is the crucial point. People value not being prosecuted for non-payment of taxes. The state of being free from being prosecuted has 'intrinsic value' to people. The IRS, at least as of right now, guarantees people that if they pay the IRS the dollars the IRS says they owe the IRS, they will be free from being prosecuted for non-payment of taxes. If the IRS stopped taking dollars in exchange for guaranteeing people freedom from prosecution for non-payment of taxes, then dollars would cease to be backed by the US government. It is certainly true that not all people (like people living in foreign countries) have to worry about being prosecuted by the IRS in the first place. But there are millions upon millions of people who do have to worry about being prosecuted by the IRS. There are enough to establish that the dollar is backed by freedom from being prosecuted for non-payment of taxes.
So are they giving you something in exchange for your dollars? That depends on how you look at it. Either they're giving you freedom from prosecution in exchange for your dollars, or they're not taking your freedom from prosecution away from you. Whichever way you look at it, the argument is the same. To the extent that you believe the US government will continue to accept dollars in exchange for not prosecuting people for non-payment of taxes, you believe the dollar is backed by the US government.
>It's backed by debt that the Fed just creates out of thin air.
What does it mean for something to be backed by debt? Am I guaranteed to be able to buy the debt someone owes someone else with my dollars, like when banks sell mortgages to other banks?
'Intrinsic value' meaning 'objective value' is a useless concept because all value is subjective.
What I think people generally mean when they say 'intrinsic value', especially when talking about currencies, is something more like 'having some uses other than to simply trade away again to someone else, or perhaps being backed by something which has intrinsic value'.
Dollars have intrinsic value according to that definition, because they are backed by the fact that there are many people who must give the US government dollars in order to avoid being prosecuted for non-payment of taxes. That's where taxes come in. Without taxes, and perhaps some other things like legal tender laws, dollars would have no 'intrinsic value' according to this definition, just like BTC.
Both USD and BTC could still have value, even if they don't have 'intrinsic value' according to that definition.