Money is not money

I thought a bit about this. Let me see if I understand what that sentence means:

Money has no intrinsic value (even when it was linked to gold, the intrinsic value was debatable), fundamentally the value is given by two things:

1. Wide acceptance as an exchange medium

2. Trust in the country that prints the currency

On top of that there's a lot of anchoring and other cognitive biases that cause the currency to oscillate in value. So in a way, money is a very simplified legal contract between multiple parties that is ultimately both enforced and backed by a nation-state (the 'trust' in the nation-state acts as the collateral).

Is this what you meant?

If that's the case there are a few interesting consequences:

1. Paradoxically Bitcoin has more intrinsic value than nation-state backed currencies. That is because mining bitcoins require natural resources that are limited & useful and hence valuable

2. In this game (and I think by extension in the stock market game as well) deception plays a significant role. You can make a currency swing if you can mess with the cognitive biases involved in the valuation of the currency

3. At any given point in time you could replace any currency with something else as long as you can convince people that that something else is both backed and enforced by a 'greater force' (in the bitcoin case, that would be cryptography). The easier it is to explain the 'greater force' the easier the adoption of that 'something else'

Now one obvious way to make money out of this would be to play the deception/cognitive bias game. I think a lot of that is made illegal by the various law against market manipulation, insider trading and what not. The question is: what is not covered?

Obviously the other way would be to create another currency, own part of it and then resell it once it appreciates in value

Am I making sense?

Vincenzo