How does Bitcoin have an intrinsic value?

[krishnapramod]

What is bitcoins intrinsic value has always been a topic of discussion. Some people consider bitcoin as a speculative asset with no intrinsic value at all.

To be successful, money must be both a medium of exchange and a reasonably stable store of value. Bitcoin’s utility as a store of value is dependent on its utility as a medium of exchange. We base this in turn on the assumption that for something to be used as a store of value it needs to have some intrinsic value, and if bitcoin does not achieve success as a medium of exchange, it will have no practical utility and thus no intrinsic value and won’t be appealing as a store of value.

So basically bitcoins utility as a decentralized medium of exchange gives it intrinsic value, and if bitcoin as a medium of exchange fails then the store of value aspect would not be there, they are connected. In a broader sense, bitcoin needs to be adopted by more people to be used as a medium of exchange to maintain store of value, right.

Now there is a counter argument in this article that bitcoins utility as a cryptocurrency is not a satisfactory explanation of its intrinsic value.

All other types of assets, intrinsic value goes beyond the asset’s use as a medium of exchange. After all, the reason gold has served so well as money throughout history is the combination of both its scarcity as well as its intrinsic value outside of its use as money. Bitcoin lacks such utility.

Now the second part of this argument is true, although gold is rarely used as a medium of exchange nowadays, it still does have intrinsic value and considered one of best store of value assets. I do not agree with the first point, bitcoin is a currency first and then an asset so it's value is entirely dependent on its usage as a medium of exchange.

It is also mentioned that the ability to mine bitcoins is what gives it intrinsic value, yeah true to some extent, but in my opinion bitcoin does have an intrinsic value and it is derived from its utility as a decentralized P2P payment system.

https://www.forbes.com/sites/jasonbloomberg/2017/06/26/what-is-bitcoins-elusive-intrinsic-value/

Are there any other factors that contribute to bitcoins intrinsic value?

[BillyBobZorton]

What is bitcoins intrinsic value has always been a topic of discussion. Some people consider bitcoin as a speculative asset with no intrinsic value at all.

To be successful, money must be both a medium of exchange and a reasonably stable store of value. Bitcoin’s utility as a store of value is dependent on its utility as a medium of exchange. We base this in turn on the assumption that for something to be used as a store of value it needs to have some intrinsic value, and if bitcoin does not achieve success as a medium of exchange, it will have no practical utility and thus no intrinsic value and won’t be appealing as a store of value.

So basically bitcoins utility as a decentralized medium of exchange gives it intrinsic value, and if bitcoin as a medium of exchange fails then the store of value aspect would not be there, they are connected. In a broader sense, bitcoin needs to be adopted by more people to be used as a medium of exchange to maintain store of value, right.

Now there is a counter argument in this article that bitcoins utility as a cryptocurrency is not a satisfactory explanation of its intrinsic value.

All other types of assets, intrinsic value goes beyond the asset’s use as a medium of exchange. After all, the reason gold has served so well as money throughout history is the combination of both its scarcity as well as its intrinsic value outside of its use as money. Bitcoin lacks such utility.

Now the second part of this argument is true, although gold is rarely used as a medium of exchange nowadays, it still does have intrinsic value and considered one of best store of value assets. I do not agree with the first point, bitcoin is a currency first and then an asset so it's value is entirely dependent on its usage as a medium of exchange.

It is also mentioned that the ability to mine bitcoins is what gives it intrinsic value, yeah true to some extent, but in my opinion bitcoin does have an intrinsic value and it is derived from its utility as a decentralized P2P payment system.

https://www.forbes.com/sites/jasonbloomberg/2017/06/26/what-is-bitcoins-elusive-intrinsic-value/

Are there any other factors that contribute to bitcoins intrinsic value?

If we can talk about an ideal of perfect money, one of the characteristics of this perfect money is that it should have no intrinsic value, so bitcoin not having intrinsic value is actually a positive if you consider the game theory behind what would mean for a currency to have intrinsic value.

In any case, I see intrinsic value in bitcoin. The fact that you can send money borderless, without permission, is an intrinsic feature of bitcoin. The fact that it is so hard to mutate, it's also a strong positive. Hopefully we can get segwit, then the protocol stays as it is.

[Kronos21]

The value of bitcoin only in the faith of people in him. If bitcoin had any value, we would have not seen such price spikes. For me, the fact that bitcoin has no value is a minus of this currency.

[Iranus]

You will find that every single fiat currency ever has lost value every year.

Almost nothing has "intrinsic value" that you can objectively judge, but what Bitcoin does have is an extremely strong brand, new technology and near-immutability.  For major transfers, it's a great system.
You have cryptocurrencies which try other methods to have intrinsic value - for example, Byteball's transaction fees are static so that the price eventually becomes whatever the value of transferring conditional payments in an immutable database is perceived to be.  However, that would eventually resulting in the price dropping as better technology is developed, because Byteball would have to adapt to those lower fees.

There really isn't an accurate way to do this but people can keep trying until it's achieved.  There's not a lot that you're competing with when it comes to fiat currencies, so you're not exactly in danger of becoming irrelevant...

[deisik]

Are there any other factors that contribute to bitcoins intrinsic value?

There is no intrinsic value as such in Bitcoin

If it doesn't get used either as a currency or a vehicle for speculation, it will lose all its value. Intrinsic in this case means inherent, i.e. necessary and integral of something. In other words, the use via which Bitcoin gets its value cannot be considered as an intrinsic property (it may just as easily drop out of usage completely and thus lose all value). This use is external to Bitcoin. That said, money conceptually has intrinsic value which consists in transactional utility. Basically, this utility makes something into money. Conversely, removing it destroys money. When some money token (say, Zimbabwean dollar) loses its transactional utility, it stops being money

[shaggy404]

Bumping a slightly old thread, but I came across this article on Wired recently:
https://www.wired.com/story/bitcoin-has-no-intrinsic-value-neither-does-a-dollar1-bill/amp

"YES, BITCOIN HAS NO INTRINSIC VALUE. NEITHER DOES A $1 BILL"

[sheld0n]

Basically, the intrinsic value of Bitcoin is trust. If you ask this way you should also ask yourself what intrinsic value paper money has? Paper money is not covered by gold or any other good. If the people lose trust (in the Feds or in the governments to keep the value of the paper money) than it could theoretically fall to zero in value. Same holds to Bitcoin.

[dothebeats]

Basically, the intrinsic value of Bitcoin is trust. If you ask this way you should also ask yourself what intrinsic value paper money has? Paper money is not covered by gold or any other good. If the people lose trust (in the Feds or in the governments to keep the value of the paper money) than it could theoretically fall to zero in value. Same holds to Bitcoin.

Apart from trust, bitcoin also boasts its limited supply just like gold. An asset that cannot be replicated is another thing too. And I agree that trust is what holds the value for fiat and bitcoin. If people don't trust the system and the government, it will lose value as people agreed that it's worthless for them to use.