You often hear people criticize bitcoin for having no intrinsic value. And they’re right about that.
But according to WAX Co-founder William Quigley, if you ask the same question about pretty much anything else on the planet, the answer is also “no.”
A case in point is the US dollar, according to Bitboy Crypto: “If a person had been raised in the jungle by wolves and stumbled across a dollar on the ground, would that person know that a green piece of paper has any value? I would argue no. For Bitcoin, it's the same. In 2010, if I had sent a Bitcoin to my wife and showed her a wallet with one Bitcoin in it, would she have any indication that that Bitcoin had any value? I would also argue the answer is no.”
So why should anyone care if bitcoin in particular has no intrinsic value? Is this just the baseline argument that crypto skeptics use to throw shade at the first and most well-known cryptocurrency? Who really cares if it doesn’t? According to William, this isn’t even the important question to be asking about bitcoin to begin with. To find out what that he thinks question is, watch the latest episode of WAX ON.
And it’s worth nothing that some disagree about Bitcoin’s lack of intrinsic value. “Bitcoin does have intrinsic value in that it is extremely difficult to steal or counterfeit, and has a provably scarce supply,” explained crypto Youtuber FUD TV. “These properties are then imbued with extrinsic value as existing, fiat-based economies continue to devalue themselves by printing money while remaining more vulnerable to theft and fraud. Thus Bitcoin’s true value is derived from both intrinsic and extrinsic properties, which, as the network expands, work to increase its relative value to other assets.”
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We've all heard the argument. Does Bitcoin have intrinsic value? Of course the rhetorical response is always “no,” right? And therefore it follows “Okay. But then Bitcoin has no value at all.”
But what is intrinsic value? Intrinsic value means value in itself. The thing you possess generates the value you're seeking. No other ingredients are needed.
So isn't this intrinsic value argument a red herring? Because frankly no currency has intrinsic value. In fact, I'm not aware of anything by itself that has intrinsic value other than maybe happiness. And in case you're wondering but what about gold? I would say no gold has no intrinsic value, value in and of itself at least not for most of us anyway because for starters you don't even know whether or not what you have is gold. Gold doesn't self identify. You need something else outside of gold like an asset for instance to actually authenticate it and it can't even be instantly authenticated.
Oh but that is a trait Bitcoin does quite well isn't it? Bitcoin can't be counterfeited and it can be rapidly and at very low costs verified as being genuine. It's the hallmark of Bitcoin in fact.
I think we need to start giving a different answer when the subject of Bitcoin and intrinsic value comes up. Does Bitcoin have intrinsic value? We'll concede it doesn't. And again neither does any other currency.
But Bitcoin does have something else. It's called instrumental value. Instrumental value is the value of something because it can be used to do or obtain something else you want. Something you desire. It's valuable because it is a necessary ingredient in something else you want or need to do. So let's start talking about Bitcoins instrumental value and see how these other fiat currencies compare to that standard.
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