Does a Thing Have Value Just Because We SAY it Does?

With the crypto markets once again on the rise, and the market cap of Bitcoin being well above a trillion dollars, and the market cap of all crypto tokens being well above two trillion dollars I find myself pondering the age old question about "value" is.

Moreover, I find myself posing the question of who determines what value actually is? What has value?

It's not always an easy concept for people to grasp, but value is what we decide that it is.

Perhaps that sounds a bit cryptic, but ultimately value is very hard to tangibly define, because it is ultimately nothing more than an agreement between multiple parties as to the worth of something.

If that sounds like so much rubbish consider this scenario: In the zombie apocalypse what do you think has more value: an intact can of beans or an iPhone?

In other words, value is an agreement. But what has value? And can we give something value simply by declaring it has value even if it actually doesn't have any tangible value? Consider NFTs, for a moment.

Consider the fact that I have been a dealer in Old Paper collectibles, and I have on occasion sold old postage stamps for upwards of $500. Does a tiny square of paper 1 inch on each side actually have any tangible value? It's old, and therefore brittle, it's very small so you can't write anything on it and you can't start a fire with it so why does it have value?

It only has value because some collectors of postage stamps are in alignment that this specific item is interesting and desirable and "I want it" and I wanted enough that this is the value I assigned to it.

Many many years ago when we lived in Kenya, they were still some small villages out in the countryside where local tradesmen would rather be paid with cowries - a form of seashell - than with the official Kenyan shilling.

Nonsense! How can a seashell you can pick up at the seashore have value? Not a question I can answer... it's simply a fact that this particular group of indigenous people determined that in their world cowries had value as a trading unit.

What does that have to do with the beginnings of a potential crypto bull run? What does this have to do with web 3.0?

Again, it comes back to value. And it comes back to who determines what value is and what has value. In this world where we can pretty much tokenize everything I can essentially declare that my pocket lint has value and mint a token to represent the value of that pocket lint.

Whether that pocket lint and the LINT token actually has value... well that depends on the agreement between me and other people who perhaps are interested in studying pocket lint, or are collectors of pocket lint from around the world.

What's my point here? Well as I see it, just because we can tokenize absolutely everything does that mean it's necessarily the right thing to do? Do we need to make some kind of revolutionary change to the world of everything to declare that thin air suddenly has value and it needs to be traded.

That seems to me to be a bit of a flimsy house of cards! Unless, of course, we are suddenly at risk of running out of thin air...

I suppose the ultimate question might become one of where we draw some kind of bottom line. We can keep issuing tokens to our hearts' content and declare that arbitrary things we see around us somehow "have value" and deserve to be tokenized, but if you take a step back and take the hundred thousand foot overview it's not really all that different from conventional governments setting the Fiat printing presses to run and just spitting out more and more and more money in a pretense that that somehow makes us "wealthier."

But does it actually?

I have my doubts. Ultimately what we're doing is based on resources and dividing up resources and allocating resources between individuals and organizations.

Presenting something that isn't actually a resource as a resource and saying it has value doesn't actually give it value. And if I come up to you with my LINT token I doubt very much you're going to buy it unless of course you perceive that somebody is going to do a pump and dump and you can be part of the front end of that!

Which circles are straight back to the beginning, and the question of whether we're creating something out of thin air.

We may be sending at the edge of a whole brand new paradigm, but we ultimately end up back where we've always been. Unless... there is some kind of observable utility to what you're offering it doesn't generally have much of a chance to succeed in the long run.

If you've been around long enough, you might remember those crazy chain letters that would go around 30, 40, 50 years ago. You send a dollar each to a bunch of people on a list, and the idea is that they send a dollar each to a bunch of people and so on so forth and you pay somebody up the road for sending you this Chain Letter. And after a while you'll end up with $250,000!

But here's the kicker. You don't actually end up with 250,000. Most likely you end up with $30 worth of postage costs and nothing.

And the thing is, if it actually worked, absolutely everybody would be doing it and they would all be getting $250,000, and if everybody suddenly had $250,000... you could go to the supermarket and chances are that a loaf of bread would cost you $250,000.

We keep trying to come up with ways in which life is not a zero-sum game but nobody has managed to cheat that parricular paradigm as of yet.

Meanwhile, I'm holding on to my tokens and hope that this is the beginning of a bull market that'll end up getting me paid for these words about pretty much nothing!

Thanks for stopping by and have a great Friday!

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Created at 2024-05-24 01:03 PDT
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