Value is subjective, and it isn’t something that tangibly exists in reality, so it’s no wonder why so many people get hung up on this concept.
Some people knock bitcoin because of its “lack of instrinsic value”, while pointing out that currencies like gold do have instrinsic value - i.e. if gold wasn’t a currency, it’d still have value because it’s ‘pretty’ and people like to wear it.
This is a logical fallacy. Tastes change. The world could wake up tomorrow and decide they don’t think gold is pretty anymore. There is nothing instrinsicly ‘valuable’ about gold, nor any other good in the world. Value is only an opinion, subject to change on a moment’s notice. Our opinion of a good is not THE good itself, if that makes sense. If it doesn’t, keep reading:
A currency’s supposed instrinsic value can only serve as an insurance policy—a price floor for you—in case people decide to stop transacting in it. It does nothing to make the currency more useful at being a currency. Still lost? I got this:
At the end of the day, what you really need to do is examine the things that make something a good medium of exchange. Without mediums of exchange, we’d all be inefficiently trading goods between each other. I’d trade you chicken for your water, you’d trade me milk for my eggs, and it’d be a nightmare, and ridiculously tough to start a business, limiting the velocity of economic growth. Instead, we need a good (or multiple goods) that can function as a way to allow us to transact as smoothly and efficently as possible. Here’s 7 characteristics that I think make a perfect medium of exchange:
(1) divisible
(2) durable
(3) portable
(4) storable
(5) transferable
(6) scarce/rare/costly to acquire/produce (USD fail)
(7) Private/anonymous (USD fail)
How many goods out there can you think of that satisfy these principles? Hardly any. Gold has historically fit these principles best, but not even close to perfectly. For example, how portable is a large amount of gold? How transferable is it?
If there was some magical good out there that could be all of these things perfectly, I’d bet the market would choose it over any other means of transacting—over the USD, gold, you name it.
Bitcoin and crypto, in my opinion, is as close to perfect as there is in the world, as per these principles. I believe it’s inevitable that the market, on a mass scale, will share my opinion as well in the future. Especially once all the technology that is currently being developed on top of the blockchain is released. Acquiring and transacting in crypto will become so easy, so accessible, and so cheap, anybody will be able to do it.
Oh, and not to mention, we won’t be debt slaves anymore to the world’s banking elite. So that’s good too. ;-)
slaves to just a few whales then?