As the crypto revolution really gathers pace I’ve noticed among the detractors of Bitcoin and everything blockchain the argument that “Bitcoin has no Intrinsic value”. This seems to be a mantra repeated in comments sections and social media particularly among fans of precious metals. Is this true? Do cryptocurrencies really have NO intrinsic value? Well lets do what very few of these detractors seem to do and take a look at what intrinsic value actually is ......
Definition
intrinsic
adjective
belonging naturally; essential
The intrinsic value of something is said to be the value that a thing has “in itself,” or “for its own sake,”. Many philosophers take intrinsic value to be crucial to a variety of moral judgments.
So the definition of intrinsic value is quite abstract and is something philosophy has taken a great interest in for many years including Plato. Its a shame Plato isn’t around today because it appears many internet trolls seem to be so smart they know exactly what intrinsic value is, maybe he could of learned something!
Putting Philosophy to one side what do we mean by intrinsic value in the context of economics which is what we are discussing here.
According to Investopedia “The intrinsic value is the actual value of a company or an asset based on an underlying perception of its true value including all aspects of the business, in terms of both tangible and intangible factors”
Its very interesting that the word “perception” is used here. Reminds me of the Gordon Gekko quote from Wall Street ...
Most interesting though is the use of the words “tangible and intangible” and I believe this is the vital point. The haters of Crypto believe there is no value in something “intangible” when they talk of intrinsic value this is what they really mean. What they believe is only something “tangible” a material that they can hold in their hand actually has value.
This clearly is complete nonsense , knowledge for one is not material nor are memories or joy or pain or love. Reputation is very important in business and is intangible. So to is intellectual property, brand recognition, ideas, patents and copyright. Elon Musk occupies pretty much the same physiology as the rest of us yet his imagination and entrepreneurship, drive, ambition and intellect have made him successful, meaning the intangible things about him have value. The old soft toy you had as a child or the biscuit barrel your Grandmother left you have no material value to anyone, but the memories attached to those items make them valuable to you. Perception creates value and so does utility and not all utility is physical.
Do any of these people who claim Crypto has no intrinsic value realise we live in the digital age? Staying secure online has value, thats why Mr McAfee is a millionaire and rightly so. So cryptography is of value. The convenience of lightning fast transactions around the globe of course has value in comparison to moving lumps of metal physically around.
Stability has value, Speed has value, Reliability has value and so does simplicity of use. Innovation is valuable ask Zuckerberg about that. Transparency in the public ledger has value too. Most of all though the possibility of a truly decentralised technology has enormous value for us all. Centralised power is the great cancer on this world, rewarding the few while the many get nothing. Decentralising the Internet is going to bring about the biggest leap forward in human development since the Enlightenment .... What could possibly have more intrinsic value than that.
