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RE: What Is Financial Value?

in #economics7 years ago

From my perspective, taxation is theft and the courts and police are just more monopoly service providers provided by a violent monopoly. That means, to me, the current system is a forced narrative, but still a narrative just the same.

If we talk about future cash flows, cryptocurrency, I think, will have far greater value becuase it’s a better form of money (a better ledger) and people will want it over fiat.

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From my perspective, taxation is theft and the courts and police are just more monopoly service providers provided by a violent monopoly. That means, to me, the current system is a forced narrative, but still a narrative just the same.

Not just the same. Ask any libertarian.

If we talk about future cash flows, cryptocurrency, I think, will have far greater value becuase it’s a better form of money (a better ledger) and people will want it over fiat.

That is not what cash flow means in the context of calculating the intrinsic value of an asset. I'm not even sure if the same method is applicable for other types of assets. Commodities like oil have no cash flow in the same sense. You can trade them and profit from them if you sell them for more than you bought them. But equities like properties or company stock have incoming cash flows like rent income or dividends and outgoing cash flows in the case of properties like heating, maintenance, property taxes etc. This is standard economics. The dollar, by the way, has no intrinsic value, either, except for the fact that you need to have it to pay your taxes and fines.

It is a valid question whether or not cryptocurrencies will have higher extrinsic value compared to fiat money, that is, will distributed ledgers secured by cryptography be favored over centralized ledgers in the future. Typically, centralized money ledgers are maintained by banks. Their advantage is that they are more energy efficient than distributed ledgers using cryptography but require trust despite accounting obligation and going through regular audits.

I think distributed ledger technology will become popular in IoT and distributed apps in the future. Dealing with banks is simply too cumbersome for those purposes.