21 lines
2.9 KiB
Markdown
21 lines
2.9 KiB
Markdown
# Use Value
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*Use value* or *intrinsic value* is a feature of an asset which can satisfy some human requirement, want or need, or which serves a useful purpose. It is an [asset](assets.md) whose demand curve is generated by organic economic activity rather than by [artificial demand](artificial-demand.md) or [narrative](narrative-economics.md).
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An example of a [commodity](commodity.md) with use value is wheat, whose use is the ability to produce flour and bread which can provide sustenance and satisfy human hunger and need for sustenance. Alternatively the use value of petrol is the capacity to burn it to produce energy.
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An example of a [financial asset](financial-asset.md) with no use value is a [stock](stock.md). Instead its [market value](market.md) is derived from its [fundamental value](fundamental-value.md) which originates from both the [legal framework](security.md) that gives rise to its existence and whose demand is generated from its exposure to [income-cashflows](income-cashflows.md).
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The [dollar](dollar.md) has no use value and no [fundamental value](fundamental-value.md), however it is a [monetary](money.md) instrument because of its efficacy as a [currency](currency.md).
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[Cypto assets](cryptoasset.md) are a [speculative](speculation.md) investment that has both no use value, no [fundamental value](fundamental-value.md) and are also non-monetary. Instead their demand curve is generated from [narrative](../claims/is-narrative-economics.md) and the [greater fool theory](greater-fool-theory.md).
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A historical pathological example of a [ficticious commodity](ficticious-commodity.md), with both no use value and no [fundamental-value](fundamental-value.md), would be [indulgences](https://en.wikipedia.org/wiki/Indulgence) sold by the medieval church based on [artificial demand](artificial-demand.md) induced by [narrative](narrative-economics.md).
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See the [asset comparison table](assets.md) for a larger enumeration of asset classes and their properties.
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## References
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1. Shri T Rabi Sankar. n.d. ‘Cryptocurrencies – An Assessment’. Reserve Bank of India. Accessed 2 March 2022. https://rbi.org.in/Scripts/BS_SpeechesView.aspx?Id=1196.
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1. Silverman, Gary. 2021. ‘Crypto Has “No Inherent Worth” But Is Good to Trade, Says Man Group Chief’. Financial Times, 26 July 2021. https://www.ft.com/content/9275baf4-0422-43a1-b8c9-9317882ca874.
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1. Weisenthal, Joe. n.d. ‘Bitcoin Is a Faith-Based Asset’. Accessed 2 March 2022. https://www.bloomberg.com/news/articles/2021-01-21/bitcoin-is-a-faith-based-asset-joe-weisenthal.
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1. Glongloff, Mark. n.d. ‘Bitcoin, GameStop Are More Cults Than Investments’. Bloomberg. Accessed 2 March 2022. https://www.bloomberg.com/opinion/articles/2021-03-02/bitcoin-btc-gamestop-gme-are-more-cults-than-investments.
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1. Diehl, Stephen. 2021. ‘The Intellectual Incoherence of Cryptoassets’. 7 November 2021. https://www.stephendiehl.com/blog/crypto-absurd.html. |