The Intrinsic Value of Bitcoin

2018-12-07T02:25:24.000Z Honest Cash

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Today, I want to talk about what I think gives bitcoin its intrinsic value. First, we should define this, because "intrinsic value" probably means different things to different people. To me, intrinsic value means that the thing is fundamentally useful for something.

For example, bananas have intrinsic value, because they're delicious. But US Dollars, by this definition, do not, because you can't eat them, you can't build anything with them, you can't even light them on fire in a useful way. All you can do is hope somebody else wants them. And if they do, the dollars have extrinsic value.

But how is Bitcoin intrinsically useful? Because it's a highly portable bearer instrument. OK, time for another definition. A bearer instrument is something that is owned by whoever has possession of it. Like cash: if I have this $20 bill, it's mine, and if I give it to you, it's yours. This is much different from money in a bank account, or shares in a company, where ownership is determined by an authority.

But bitcoin is something more than cash, because it's portable. I can't really hand you this money, because you're not in the same room as me. But I can send you bitcoin, anywhere in the world, almost instantly. This combination: something you can own by controlling it, but you can instantly send it anywhere, gives people control over their own money in a fundamentally new way. Never before in the history of the world have we had something with this level of individual empowerment.

And that's why I think bitcoin is valuable.


There is no intrinsic value. The value is subjective

by @somospolvo

Neither Bitcoin, nor the dollar, nor the gold nor the banana have intrinsic value because that does not correspond to the nature of the value. Value is a product of the psyche. It is subjective and does not reside in objects.

What bitcoins have are qualities. We value those qualities and as results our psyche assigns a value. That is all. The value comes from the human mind, since humans identify how Bitcoin allows us to reach our goals.

The concept of "intrinsic value" is totally wrong.