This is because the nature of the gold atom produces superior electrical conductivity, corrosion resistance, ductility, luster and density.
It’s Time To Rethink The “Intrinsic Value” Of Bitcoin
Bitcoin, the goldbugs argue, has none of these things. But the conclusions they draw is, like the hominids, primitive. Because we are used to talking about intrinsic value as a matter of physical properties, and because physical properties are the ultimate in concrete examples, this whole topic is virtually always discussed in a self-reinforcing loop which jumps straight to the concrete, while skipping over intrinsic value as an abstract concept.
Zooming out from the real world into the conceptual, focus blurs a bit. And as with the 3D eye puzzles of your childhood, that loss of focus can be incredibly illuminating.
Rather, the physical properties are merely examples of a deeper concept which is the true underpinning of intrinsic value, an underpinning which has bolstered gold as a monetary metal for millennia, and which Bitcoin possesses to a degree which no man-made money has ever had before. This framing of intrinsic value asserts that what it really describes is a property deeper than any particular quality of physical usefulness: it is the assurance that those transacting in the money know that, assuming they are getting the genuine article, it will be valuable, both at the time of transaction and in the future.
Bitcoin Has ‘No Intrinsic Value’: A Very Brief Summary
When we speak about physical items such as gold, silver, etc. We understand that the physical properties of a monetary metal are something delineated and constrained not by man, but by the law of the universe itself.
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Simon Chandler Feb 1, The first is that, like gold, Bitcoin does inherently possess certain features which have resulted in people taking an interest in it. While they say different things about this and come from slightly different angles, a good summary of their views was provided in November by Roubini. Roubini famously predicted a collapse in house prices in , a year before the subprime mortgage crisis sent shockwaves through the US economy.
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Now his focus seems largely to be on Bitcoin and crypto more generally, proving that a broken clock, despite being correct twice a day, is wrong for the other 22 hours. To begin with, even Roubini himself has admitted that bitcoin has at least one use , thereby giving it some value greater than 0.
Yes, Bitcoin Has No Intrinsic Value. Neither Does a $1 Bill
In other words, bitcoin can be useful for money laundering and other illicit activities as seen with Silk Road and other illegal marketplaces. The same thing applies to Bitcoin: its basic properties resulted in people taking an interest in it, and now that people do have an interest in it, its scarcity is enough for its price to continue rising. It is no wonder, then, that bitcoin makes many nervous. None of us know, of course, if bitcoin will survive or have any value in the years ahead. That alone says something about where we are in its evolution. For hundreds of millions in the emerging worldwide middle class, those are not givens, and bitcoin and its digital brethren offer alternatives to too few banks and erratic financial systems managed by unreliable governments.
“Bitcoin Has No Intrinsic Value”. Then What Gives Bitcoin Value?
It is perhaps not surprising that Casares hails from Argentina, whose governments over the past decades have shown a ruthless disregard for the value of the peso and have manipulated the currency to maintain power at the expense of public and private savings and livelihoods. Financial services remain among the least disrupted walks of life.
Yes, ATMs have changed retail banking and algorithms have altered trading. But much of the infrastructure and basic business of finance remain unaltered from a century ago. Bitcoin and digital currencies are one wave of change that will alter how we understand money and how it is used within and across borders.