The Myth of “Intrinsic Value”

Many folks make the argument that Bitcoin has no “intrinsic value”. What they fail to realize is that no thing has “intrinsic value” – not even gold. No thing has value in and of itself. Value is a verb. In order for something to have value it must be “valued” by someone.

Value is subjective.

Bitcoin is not “backed” by anything and neither is gold. Neither has to be backed by anything. Some people value gold for what it is and what it allows you to do with it. Some people value bitcoin for what it is and what it allows you to do with it.

Bitcoin is a new commodity created to serve the market demand for a better medium of exchange.

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2 Responses to The Myth of “Intrinsic Value”

  1. Actually at current prices, Gold does have an industrial use. The bonding material in semiconductor chips is made of Gold. But yes, value is a subjective term.

  2. Anne Ominous says:

    You are wrong, and here is why:

    The value of a good TO A CONSUMER of potential buyer is subjective. But “intrinsic value” is an economic term that is neither vague or subjective.

    You have made the same fundamental mistake that so many others have when discussing the subject: thinking that intrinsic value has something to do with your perception of the value of something to you. That is about as far from the meaning of “intrinsic value” as it gets.

    Intrinsic value is a specific quantity that economics defines very clearly and unambiguously: it is the cost of production + the cost of distribution of some commodity. (It is very close to the idea of “cost of goods sold”.) It has NOTHING to do with your perception of something’s value to YOU. It also has NOTHING to do with market price.

    So next time somebody speaks of “intrinsic value” in an economic context, you’ll know what it really means, eh?

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