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  Benjamin Davies addressed criticism #2494.

Thanks for the criticism. New argument: Utility (besides usefulness as money) is not strictly necessary, although it may be nice to have. The value of a currency is set by supply and demand.

Supply: A limited supply (scarcity) may increase the value.

Demand: Demand is set determined by how well people percieve the currency's features as a store of value, medium of exchange and unit of account. Important factors include: Durability, Portability, Divisibility, Fungibility, and Stability. Gold has had most of these features (importantly scarcity, only 2% inflation from mining). However, it severely lacks in portability due to being a metal, compared to hard digital assets.

So the value of a currency is mostly determined by its perceived usefulness as money, not its utility for other things.

#2494·Erik OrrjeOP, 2 days ago