The Intrinsic Value Myth

I’ve heard people object to Bitcoin (and cryptocurrency in general) on the grounds that is has no “intrinsic value”.

Intrinsic value is something that doesn’t exist. Things are valuable because of what people think of them, not in and of themselves.

Even food is not valuable to a society of suicidal people, if such a society was to ever exist.

Bitcoin is not fundamentally different from other fiat currencies except it does not require coercion to exist.

And I see fiat currency objected to on the grounds that it is “not backed by anything”. This objection is often held by people who oppose the state’s monopoly on currency.

It’s not true that fiat currency is not backed by anything. It’s backed by people’s faith that others will take it.

This trust has no less value than gold or cowry shells or the countless other commodities that have backed currencies historically. So why not use it for a currency?

Misunderstanding the nature of value misunderstands the idea that everyone can gain from a mutually agreeable trade.

After all, if people didn’t value goods differently, and if goods had an objective value, then either someone would suffer from voluntary trade or no one would gain.

This is hardly the case considering the extraordinary wealth in the world around us, virtually all of which has been created in the last century.

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