Does Bitcoin have an intrinsic value?

Home Bitcoin For Dummies Does Bitcoin have an intrinsic value?
Published on August 28, 2018

This is educational video series explaining common stumble blocks and misconceptions about Bitcoin!

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Here is a transcript of the video:
For something to has intrinsic value, it has to be useful by itself. For example the bread is useful because you can eat it and people NEED to eat. The knife is useful because it can cut things and that comes handy in the everyday life. Gold has some intrinsic value because one can make jewelry from it and conductors. The thing is that if the price of gold was based just on it's intrinsic value it would be about $50 not up to $1800. That's the % that's used in industry, the rest is just because of it's store of value use. But even with that partial intrinsic value it's still consdidered the best store of value there is.

Now cash, it doesn't have intrinsic value what so ever. Yeah you can burn them to keep yourself warm but that's not very effecient use 🙂
It used to be backed by gold which has partial intrinsic value but that's no longer the case. US dropped the gold standard in "71 and the rest of the world shortly followed.
So fiat money have 0 intrinsic value but they are still one of the most used things worldwide. How come?
Well they are extremely convenient compared to barter trading that used to be the norm before money were invented. So they are convenient and the government says we shoud use them and that's about it.

Now bitcoin is digital cash. So, even if a single bitcoin doesn't have an intrinsic value by itself it's ok since cash doesn't have either. And bitcoins are just the cash of the future, because they take all the features of cash and make them much better!

But wait it gets better, how about the bitcoin network? Does it have an intrinsic value? Think for a second how useful will be your phone if networks didn't exist and you couldn't speak to anyone? It would be as useful as brick.

So, even if a bitcoin by itself is just a bunch of numbers, the network behind it has an enormous value, because it lets you do so many things, so much better! Just few examples…

1. It doesn't care about borders and local policies. It's a non-discriminative global currency that just works for everyone!
2. It requires no trust in some central authority or bank. It's based on math, not trust. You don't have to trust that 2+2 is 4, you can see it for yourself.
3. It can NOT be counterfeit.
4. It can be transparent. That might come handy for government spending monitoring once it goes mainstream.
5. It can be programmed to do whatever you like
6. It can be set to require agreement from few people at once to be spent.
7. It can be spent over the internet.
8. Your identity can't be stolen when using bitcoins online. Unlike credit cards.

And this is just the beginning! Like the internet in 95, who would have imagined back then how many things it would allow us to do today? Back then nobody envisioned most of them and now 20 years later it has changed our lives in so many ways! Quite beautiful isn't it? 🙂

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