No commodity has "intrinsic value". It's worth whatever someone else is willing to pay for it. There's nothing intrinsically valuable about gold, for instance. It's worth what it's worth because people believe it will be worth something in the future and are willing to pay a price for it.
Gold has practical applications. At minimum people are willing to pay considerable sums for it for use in personal adornments. It's also an instrument used as a hedge and traded by speculators, but there's a fundamental underlying value, that is a demand for it apart from speculation. If all the speculation stopped, the price would drop but not to zero.
Other commodities like timber have much more intrinsic value because they are mostly used, not speculated on. If people stopped speculating in the timber market there would be less liquidity but the price wouldn't change much, people still want to build things with it.
Cryptocurrency has no fundamental value, it's a digital good without practical applications and no fundamental demand. if the speculation stopped, the price would go to zero.
>"[for gold] there's a fundamental underlying value"
The fundamental value for it's technical applications is probably < 1/10 of it's real value.
If people wake up tomorrow and stop using it as reserves/ investment /savings, you would loose virtually all your money, down to a few percent. So yeah, that 5% or whatever of value is secure, but how nuch does that help?
Timber is obviously not a usefull store of value because it does not last, it is not fungiable, is expensive to store - imagine 100 million dollars worth of timber, and you would store that.
I think this took a wrong turn. I don't aim to defend gold a store of value. It's not clear what its value would be if people stopped using it as a financial instrument, and I always advise people not to buy gold.
My point was that tangible commodities do have at least some intrinsic value, as opposed to digital commodities like cryptocurrencies.
It's intrinsic value is that it's a digital asset, decentralized throughout the globe, computationally secured by mathematics, that nobody can counterfeit or spend without your key.
Bitcoin does has an intrinsic ability: transacting in bitcoin gives the user power to make secure, irreversible updates on a trust-less distributed ledger.
That ability gives it value for people who need that. For some people and use-cases, that ability is comparable to how gold is valuable for its ascetic and chemical properties.
Isn't that true for any kind of barter? If two parties barter with lumber and gold, the transaction is also irreversible. The ledger is just an implementation detail.
Unlike dollar bills and gold, you can own and move bitcoin without putting it in your pocket. You can walk across the border with it. You don't have to declare it for the crime of carrying more than $10,000 like you do with cash.
You can't store lumber or gold in your head in a brainwallet or in a securely-encrypted digital file. And the lumber or gold ownership relies on a legal authority to recognize and protect the ownership.
From what I gather, the ledger is what makes it possible for bitcoins to be owned. Without a ledger anyone could claim any bitcoin their own. If my understanding is correct, you're basically saying that bitcoins have the ability to be owned, an ability most physical assets already have. Not comparable at all with the actual intrinsic properties of gold.
Anything you can use directly has intrinsic value. Intrinsic value is a negligible part of the total value of gold. But it's a significant part of the total value of e.g. cereal grain, which is historically a common monetary commodity.
