Bitcoin Has No Intrinsic Value — and That’s Great.

Intrinsic Value. Bitcoin skeptics love to talk about it. Their argument is typically as follows: “Bitcoin cannot be used as a money because it does not have any intrinsic value as a commodity. For something to be a viable money, it must first be accepted and used for some other commodity purpose intrinsic to the item, then slowly become a money over time. For example: because gold can be used in jewelry and electronics, people naturally stockpile it to store value.”

Previously, Bitcoiners have made several compelling arguments against this on the grounds that 1) intrinsic value is subjective and 2) Bitcoin does have intrinsic value as a good for censorship resistant payments. Here I will argue that Bitcoin skeptics are right. Bitcoin has no “intrinsic value” as a commodity, but that’s a great thing for Bitcoin (and the rest of the world).

Inside the Mind of a Skeptic

Intrinsic value is an old idea. Even Aristotle wrote about the importance of money being “intrinsically useful and easily applicable to the purposes of life, for example, iron, silver, and the like.” It’s no wonder that this idea has persisted — commodity value has been essential to humankind for thousands of years and is directly evident to the layman.