Store of Value
Store of Value means that something is valuable because it is valuable. It is circular logic.
Value is subjective per the Austrian school of economics.
The man who popularized the school, Ludwig von Mises, wrote,[1]
“All judgements of value are personal and subjective. There are no judgements of value than those asserting I prefer, I like better, I wish.”
-Theory and History, page 22.
We can guesstimate if others value certain things based on their uses. For instance, part of the reason that cars are valuable is because people tend to prefer driving in the rain to walking in the rain.
However, General Motors is presently unable to sell 95,000 vehicles because they cannot source semiconductor computer chips which are necessary in modern vehicles.
Senad Karaahmetovic of Investing.com notes,[2]
“General Motors (NYSE:GM) issued a warning today that it is still suffering from a shortage of key components. As a result, the company has around 95,000 vehicles in its inventory that were manufactured without certain parts.
‘General Motors Company’s vehicle wholesale volumes were impacted by the timing of certain semiconductor shipments and other supply chain disruptions,’ the company said in a filing.”
Those chips are made out of gold. Gold is the third best conductor of electricity. It is also used in other electronics, dentistry, and jewelry.
Some people say that bitcoin is a store of value. What is the difference between a defunct receipt for gold and a receipt for imaginary gold?
Is a number with a brand ($£€¥₿) valuable because it can be exchanged for other brands of numbers?
Store of Value means that something is valuable because it is valuable. It is circular logic.