What bitcoin taught me: Value is not subjective \ stacker news ~econ

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What bitcoin taught me: Value is not subjective

704 sats \ 30 comments \ @fourrules 3h econ

People hate this idea because it means that the concept of value is baked into the universe through the properties of actual things. But for me since I learned about bitcoin thinking any other way is akin to denying that 2+2=4, I simply cannot unsee it.

The properties of objective value are a description of proof of work:

work / difficulty / sacrifice / effort / cost to generate
proof / truth / honesty / verity / cost to verify
universality / care / inclusivity / diversity / cost of exclusion / for my enemies and friends
independence / responsibility / sovereignty / property / cost of control / not your keys, not your coin

What is subjective is only the judgment of an individual as to the degree to which something meets these 4 criteria, and their personal priorities if trade offs are required.

I believe that bitcoin is valuable because of its own properties, same as gold, and that the only thing that takes time is for people to understand those properties and the degree to which any element or commodity fulfills them.

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69 sats \ 15 replies \ @Undisciplined 3h

What is subjective is only the judgment of an individual as to the degree to which something meets these 4 criteria, and their personal priorities if trade offs are required.

That's sufficient for what economists mean by "subjective value", though.

There's no real argument about whether human beings tend to value certain traits more than others.

42 sats \ 14 replies \ @fourrules OP 3h

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.

42 sats \ 6 replies \ @kepford 2h

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.

21 sats \ 5 replies \ @fourrules OP 2h

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.

42 sats \ 4 replies \ @kepford 2h

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.

Edit: 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.

53 sats \ 1 reply \ @fourrules OP 2h

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.

0 sats \ 0 replies \ @SqNr65 43m

If nobody is willing to pay that price, how can you be sure that's the real value?

5 sats \ 1 reply \ @fourrules OP 2h

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.

0 sats \ 0 replies \ @kepford 2h

No disagreement here.

42 sats \ 6 replies \ @Undisciplined 3h

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.

42 sats \ 5 replies \ @fourrules OP 3h

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

0 sats \ 4 replies \ @Undisciplined 2h

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.

42 sats \ 3 replies \ @fourrules OP 1h

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.

64 sats \ 2 replies \ @Undisciplined 1h

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.

42 sats \ 1 reply \ @fourrules OP 45m

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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0 sats \ 0 replies \ @SqNr65 54m

Are there numerical values that you can assign to each of these categories to determine the total value of the good?

Like is it:

score of 5 on work / difficulty / sacrifice / effort / cost to generate

Score of 7 on proof / truth / honesty / verity / cost to verify

Score of 1 on universality / care / inclusivity / diversity / cost of exclusion / for my enemies and friends

Score of 9 on independence / responsibility / sovereignty / property / cost of control / not your keys, not your coin

Total value: 22

Or something like that?

0 sats \ 1 reply \ @kepford 2h

What would you say to this statement.

Object value exists but humans have to discover it. It is not known.

This is how I view bitcoin. It has objective value now but it is not realized by the market due to ignorance. Price is one way we measure value today and prices need to be discovered. They don't just pop out for us to see as individuals.

The problem with objective value is that it is highly subjective to time and other things. If suddenly a superior element were discovered that trumped gold for example would this change gold's "objective" value?

0 sats \ 0 replies \ @fourrules OP 1h

The criteria are known, and in fact they have been denied, because one of the criteria is "no third party" (independence, sovereignty). That's not simply my preference, it's an objective criteria of value. At best I might prioritise it over one or more of the other 3 criteria.

And there aren't 3 or 7 or 89 criteria, people can't add any or remove any. They were permanent pillars, embedded in reality itself.

0 sats \ 1 reply \ @Scoresby 2h

only the judgment of an individual

The whole world slips through this hole.

Your properties of objective value are broad enough that darn near anything fits in them.

But more than this: value is just a way of talking about how much people want a thing. That's why I don't buy any kind of idea that value is objective or can be narrowed down very much. It's always dependent on real people in real circumstances...which are hugely variable.

0 sats \ 0 replies \ @fourrules OP 1h

Water doesn't meet the criteria to the degree that silver does. The criteria measure the value of things against other things. Everything fits the criteria that is a thing.

But there is such a thing as negative value too, described most lucidly by Kafka in The Trial.

0 sats \ 8 replies \ @88b0c423eb 2h

"that the only thing that takes time is for people to understand those properties" that is a subjective valuation which many people can agree upon. And that's the whole point, value comes from what they believe in as such. Take vaccines for example, for me their value is negative but for most people they have a high value as they believe it has properties to save lives.

0 sats \ 7 replies \ @fourrules OP 2h

You're confusing price with value

0 sats \ 6 replies \ @88b0c423eb 2h

why? Did you ever read Ludwig Von Mises on this subject? Saying value is objective is a very marxist idea.

0 sats \ 5 replies \ @fourrules OP 2h

Marxists don't believe what I'm describing.

Btw, your friend-enemy distinction is showing.

0 sats \ 4 replies \ @88b0c423eb 1h

They do, they believe that every work has its value, regardless of the subjetive valuation of others. Rothbard shit cake is a great example.