Physical money has intrinsic value equal to the metal or paper it's made of. Of course that is not what makes physical money valuable and I am equally confused by that quote.
USD/EUR/JPY currency (either physical as bank notes and coins, or electronic) has intrinsic value because it is almost universally accepted, taxable, and backed by debt that (at least in theory) will have to be repaid at some point in time. Bitcoin proponents like to point out that bitcoins are decentralized as if that's only an advantage of the currency, but it's the fact that commonly accepted currencies are centralized, controlled and regulated that makes them trustworthy enough that people keep accepting them in exchange for goods or labor. It's called 'fiat money' for a reason. Bitcoin has none of this, and the 'value' it derives from the 'trust' people buying them is based on nothing but speculation and hype. Anyone who thinks otherwise is fooling themselves.
Disclaimer: I'm not 'anti-bitcoin', 'anti-cryptocurrency', 'pro-government' or a big fan of fiat money and how central banks are handling it. I'm just stating my observation how the bitcoin hype and echo-chamber has made people almost blind to see the risk it will some day go to zero (maybe soon)
Same disclaimer as above.
All regular currencies are fungible and its super-questionable that BTC is divisible (the network can't handle more then what, a million transactions per second? What's the use of a currency that splits into microscopic sizes if you can't make lots of micropayments with it).
USD may be the most ubiquitous currency on the planet. However, go visit a country like Japan. Once you're out of reach of any currency exchange, you won't have much luck using your USD. Ironically, you'll have better luck using a Visa/Mastercard (which, btw, are not used anywhere other than perhaps ATMs). Those credit cards require a network to be used.
I've been to Internet cafes in Japan. But I never bought a single thing with USD. I don't see Bitcoin having any issues here. Internet is more widely available than places that take whatever your paper currency is.
You can easily take Bitcoin with you. You take your credit card with you. Both require electronic communication to work. There is no difference here.
The difference is, all national currencies have an offline only form which is good anywhere within that nation. Bitcoin does not.
A distributed ledger with proof of ownership that makes it impossible to forge transactions
That my friends is a first in history, Greenspan and others have not realised yet the implications of this.
All that means is that I can prove beyond any doubt that I own something that's worth nothing... :-)
http://www.bloomberg.com/video/greenspan-on-bitcoin-i-guess-...
>> Of course that is not what makes physical money valuable and I am equally confused by that quote.
Not going to jail is pretty valuable, and that's what governments "give us" in exchange for paying taxes in their fiat currency of choice. It's quite simple.
The thing is, most of the money/credit that has ever been created (derivatives and such) makes the amount the physical money in circulation a joke in comparison. It's as if some bitcoin enthusiast decided to etch a bitcoin wallet onto gold (because that has "value" since jewellery and electronics have been deemed "valuable") and placed a fraction of a bitcoin on it compared to the total that have been mined so far.
It's also interesting that an ever so fluctuant of a social construct is used to justify existence of one thing over another thing. One would think existence alone would suffice, but I guess that is not what man seeks…
The intrinsic value of Bitcoin is the payment network. That may not be a physical good, but it is a powerful idea.