[AnneOminous]

This isn't a failure of Bitcoin. It's a failure of the market.

Bitcoin has an approximate "intrinsic value", which in economic terms is a bit above the cost of mining. Current market price has been very far from that.

Bitcoin market right now is pretty much the definition of a bubble. Beware. In a "bubble" market, your money can disappear overnight.

But again: that's not Bitcoin's fault. It's the fault of idiots vastly and irrationally driving up market prices.

This is really a textbook lesson in why Wall Street does not represent the "real" exonomy.

[dragonwriter]

> Bitcoin has an approximate "intrinsic value", which in economic terms is a bit above the cost of mining.

The current cost of mining is a rough replacement cost of bitcoin (and thus, in a sane market, ought to be a ceiling on its market value, since if the exchange cost is higher than that, you are better of mining then buying), but since mining isn't inherently reversible its not an intrinsic value.

[dllthomas]

"and thus, in a sane market, ought to be a ceiling on its market value, since if the exchange cost is higher than that, you are better of mining then buying"

Modulo time preferences...

But yes, bitcoin's intrinsic value is that it is the only method to pay transaction fees to have work done on your behalf by the bitcoin network. I don't know how to price that, though.

[AnneOminous]

Quote: "...but since mining isn't inherently reversible its not an intrinsic value."

It IS "value", because the resources used for mining have measurable value, and can be traded for things other than Bitcoins.

It may be an indirect measure of value, but it's still a measure of value.