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Krzysztof Jurewicz @KrzysiekJ

I’ve received an email with a suggestion that should use to obtain “intrinsic value”.

The problem with such thinking is that the labour theory of value (offen associated with ) has been refuted. The work in general has no value in itself. The fact that work has been performed may provide “psychological value” for some, but there’s no real utility associated with it. More on this topic: mises.org/wire/labor-theory-va

@Wolf480pl According to Google Translate, utility is “the state of being useful, profitable, or beneficial”.

@KrzysiekJ and you didn't mean anything more specific by it in this context?
Ok, so let's say that the person who said about proof-of-work sells electricity, and their earnings depend on the amount of electricity sold. Surely for them it is profitable and beneficial that people mine a proof-of-work currency, because this increases the profits from selling electricity to those miners.

@Wolf480pl Well, in that sense if I turn a light bulb on, but close it in a black box, then it is profitable to electricity sellers. However it is neither profitable nor beneficial to me, hence from my point of view there is no utility in turning the bulb on. What utility does proof of work provide to cryptocurrency users (unless it is used to obtain security, as in Bitcoin)?

@KrzysiekJ oh, so it's not about creating _any_ utility, and increasint the total amount of utility in the world, but it's about creating utility for the person that performs the action?

@KrzysiekJ So eg. if I host a file upload service that anybody on the internet can use for free, and I don't have any profits from it, I'm doing something pointless because _I_ don't get any utility from it?

@Wolf480pl If you host a file upload service for free, then it may have utility for your users and for you the utility may be that you help spreading some files and make your users happy.

@KrzysiekJ I'd call the latter "psychological value". But yeah, the utility for the users is real, and probably greater than the hosting costs, so it should be a net gain.

@Wolf480pl Giving money doesn’t sound like creating previously non-existent utility; it’s just changing ownership of resources. And clearly some resources (energy) which have utility are destroyed in proof of work. Refer to Bastiat’s parable of the broken window: en.wikipedia.org/wiki/Parable_

@KrzysiekJ hm... yeah, you're right.

Wasting electricity isn't a net gain in utility, because the amount of utility lost by the one wasting is at least as big as the amount gained by the electricity seller.

@Wolf480pl Let’s say that we both have some electricity to sell. I then pay you, say, $150 to burn 1000 kWh. You then also pay me $150 to burn 1000 kWh. Money outcome of transactions is 0… but we both now have 1000 kWh less of electricity, so this is a clear loss.

@KrzysiekJ In Marx' theory nobody cares how hard one works. The relevant 'unit' in this context is the socially necessary labour time. The main problem with it (or better misunderstanding) is that it's a theoretical tool, not a unit you can quantify.

@stefannagy Doesn’t Marx however compare labour quantitatively, like “if this commodity is exchanged for two times the price of that commodity, then it requires two times more labour to be produced”?

@KrzysiekJ Have a look at the wikipedia article about socially necessary labour time, it's quite good: en.m.wikipedia.org/wiki/Social

@KrzysiekJ

> #proof_of_work to obtain “intrinsic value”.
- this has very little to do with the LTOV (which by the way has not been refuted, regardless of the delusions held by Austrian school economists), as proof-of-work refers to processor cycles in this case. But that's not even the point here. The interesting bit is that somebody out there thinks a cryptocurrency can hold "intrinsic value"...

@Antanicus Well, human labour can be exchanged for computer labour, so I see no problem in that matter except that Marx’s Law of Value seems to artificially limit itself to human labour (at least when reading the abstract at en.wikipedia.org/wiki/Law_of_v ). Let’s say that we have a transport service. Does the value of that service fundamentally depend on whether it is performed by a human, by a horse or by an autonomous car?

@KrzysiekJ
> Does the value of that service fundamentally depend on whether it is performed by a human, by a horse or by an autonomous car?

-Of course. The marginal value of a good or service is always calculated based on the input cost vs. the unit cost. As the cost of machine labor is negligible compared to human labor and is infinitely available, then the value of a good/service produced by a machine will necessarily decrease over time to the least possible price.

@Antanicus So the law of value basically tells us that non-human resources are abundant? This seems coherent with marxists’ dislike for property rights (which are introduced to deal with scarcity of physical objects).

@KrzysiekJ no, the LTOV tells us that the value of a product/service includes the cost of the labor that is needed to produce it. Which is why capitalism doubled down on automation since the very beginning: automating away human jobs is the best way to lower the price of a product and thus sell more units and/or undercut the competitors.

@Antanicus I can perhaps agree with the above (assuming we’re talking about transactional price), however Wikipedia defines both terms differently:

LTV: “the economic value of a good or service is determined by the total amount of »socially necessary labor« required to produce it”. Hence it should not matter if a car has square wheels.

law of value: “the relative exchange-values […] are proportional to the average amounts of human labor-time”. “Proportional”, hence capital does not matter.