Bitcoin's Intrinsic value

[jubalix]

Many quarters object to bitcoin on the basis it does not have "intrinsic value".

What then is is the intrinsic value of (fiat) paper money?

The ability to arrange the use and value of all other things.

Bitcoin is immune to multitude of actions that a gov may take by quantitative easing, interest rates, capital controls, etc and emerges as a better means to value all other things and arrange their use.

A central plank of bitcoins intrinsic value and arrange the use of all other things.

There's a multi Trillion proposition right there.

[HabBear]

Many quarters object to bitcoin on the basis it does not have "intrinsic value".

And many quarters are correct, Bitcoin as a currency does not have intrinsic value.

No currency has intrinsic value because there are no underlying assets related to the investment, it's merely a medium of exchange that derives its value based on the balance between supply and demand. SOURCE.

Now, Bitcoin as an investment could have intrinsic value, but it's hard to calculate what it is. The challenge is that investment professionals don't even agree on the correct way to calculate intrinsic value. And with Bitcoin there is not underlying asset, earnings, debt, or dividends that other investments have. These metrics are used for any calculation of intrinsic value.

How would you calculate Bitcoin's intrinsic value? Don't forget to show your work!

[jubalix]

Many quarters object to bitcoin on the basis it does not have "intrinsic value".

And many quarters are correct, Bitcoin as a currency does not have intrinsic value.

No currency has intrinsic value because there are no underlying assets related to the investment, it's merely a medium of exchange that derives its value based on the balance between supply and demand. SOURCE.

Now, Bitcoin as an investment could have intrinsic value, but it's hard to calculate what it is. The challenge is that investment professionals don't even agree on the correct way to calculate intrinsic value. And with Bitcoin there is not underlying asset, earnings, debt, or dividends that other investments have. These metrics are used for any calculation of intrinsic value.

How would you calculate Bitcoin's intrinsic value? Don't forget to show your work!

I suppose there could be some argument as to the meaning of "intrinsic"

However I think the valuation, and organisation of all other things is a the intrinsic value of FIAT.

Eg it facilitates trade and interaction on a scale and efficiency that cannot be otherwise had.

[Labad]

Many quarters object to bitcoin on the basis it does not have "intrinsic value".

And many quarters are correct, Bitcoin as a currency does not have intrinsic value.

No currency has intrinsic value because there are no underlying assets related to the investment, it's merely a medium of exchange that derives its value based on the balance between supply and demand. SOURCE.

Yes I do agree with this. Currency don't have intrinsic value, people only value currency because it is a medium of exchange, a tool which they use in order to survive.

[Larster]

There used to be currencies, that were covered with gold and those theoretically could have been considered as having an intrinsic value, but I am not sure if there are any left of the kind. However most country issued currencies are closely related to the country  economy and that could also be considered as an intrinsic value, derived intrinsic value perhaps.

[seamukred]

The intrinsic value of bitcoin and paper money is that it can be used to pay for goods and services. Just the number of people using bitcoin is still small. As the number of bitcoin users increases, the internal value of bitcoin will increase.

[SuperD007]

I think something else that needs to be taken into consideration is that the actual cost to produce a bitcoin is over $1000 (if we look at mining equipment, time, power usage)

This production cost gives Bitcoin intrinsic value compare that to how much it costs to print $7500 of fiat money? (peanuts)

[jhon_21]

Actually market for investment in the crypto currency is different than the traditional market. In the stock markets, companies do transaction and companies have asset so we can measure their intrinsic value. But here there is no company , it is a market of digital currency investment that has no asset as a result no crypto currency will not have any intrinsic value not only bitcoin.

[centralbanksequalsbombs]

Others above gave good points, however in the constraints of this world where nothing is backed by physical commodity, intrinsic value can be derived in relational terms to fiat supply. If fiat globally were fixed, bitcoins price would remain low. However, the opposite is true, fiat (includes credit) globally expands in an unchecked manner and if you wait a decade, the supply is up exponentially....this in turn has led to exponential growth in the deflationary, fixed supply currency called Bitcoin. Bitcoins price will always rise as long as we have a global dominated central-bank led fiat currency world.

If fiat/credit supply stopped growing, then house prices, stock prices, financial assets would crash significantly in value.

All other altcoins in relation to bitcoin are worthless - more on this below;

Popularity will begin to explode with lightning in the next year.
Bitcoin's lightning network is emerging where fees will be tiny and cross-chain atomic swaps for decentralized exchange.

Bitcoin's blockchain is the only unique one to provide the most security in a decentralized, global, incentivized fashion.

Bitcoin's price will be at the very least more than 4 times (400%) of todays price in 5 years.



Governments and laws are controlled by the central banks. Bitcoin is an anti-establishment revolution that has already solidified itself worldwide.

Bitcoin cannot be controlled. It cannot be banned. It cannot be made illegal. And conversely it cannot be legalized. It just simply is. And people can always use it.

Those trying to undermine and manipulate bitcoin stem from the central bank system around the world;
-the central banks dictate policy to all the operating big banks around the world and have essentially tried their best to ban bitcoin related transactions for more than four years straight, ever since 2013, and have failed at stopping bitcoin's growth, adoption, and popularity
-the central banks fund efforts to undermine bitcoin, providing plenty of capital and liquidity to private companies and venture backed groups such as Digital Currency Group (they own Coinbase, GDAX, Kraken, Bitpay, and media outlet Coindesk) and also Roger Ver/Bitmain to undermine and break the bitcoin protocol and/or manipulate trade

Above are just small examples.

First, educate yourself and then others. Please checkout the link to the bitcointalk post in my signature titled: How to teach Bitcoin to a 7 year old.

Bitcoin is a secure, decentralized, trustless and open system which cannot be banned nor controlled.
 
Bitcoin is ultimate store of value and its popularity has strengthened over time and maximizes value compared to any other altcoin...
Why are altcoins relatively worthless compared to bitcoin?:
If it can be shutdown, and have assets frozen by a bank or government, there would be no value
If it wasn't secure, there would be no value.
If it wasn't immutable, there would be no value.
If it wasn't globally distributed, there would be no value.
If it wasn't so strong, open-source decentralized and unstoppable, there would be no value.
If it wasn't so scarce, there would be no value.
If it was easy to spam transactions, there would be no value
If it required a central 3rd party to function, there would be no value
If it was stopped after all major banks on Earth banned in 2013 to today, there would be no value. (say "bitcoin" when transacting and watch the block of the transaction. simple fix=never mention "bitcoin").
If it didn't have the history of 8+ years (and still no hacker can exploit bitcoin blockchain), there would be no value
Bitcoin is on the verge of lightning network release rendering altcoins as only backup plan options if not dead.
If it was exactly like fiat and only did transactions, there would be no value.

Bitcoin's value is worth hundreds of billions USD today. Altcoins however are scams, weak, pyramid schemes not offering these values.

Bitcoin has all the characteristics needed combined to hold the most value and increasing more than any other financial-asset option coming from the manipulated fiat central-banking debt-system. (more than stocks, more than houses, more than gold).

For global fiat (US Dollars, Indian Rupees, Chinese Yuan, etc), the fiat bubble system broke a couple of decades ago.

Fiat around the world is forced to inflate issuance as its heavily infested, burdened and broken with (the following whether good or bad):
-regulatory burden on fiat banks & system (incredibly costly)
-inflating fiat to keep house-prices from collapsing
-inflating fiat to keep stock market rising
-financing conflicts, bombs, and "aid"
-backstopping insurance frauds
-costs of auditors and budgetors and accountants checking the same thing in governments and businesses
-big insurance loss-events
-unemployment & other welfare costs
-stabilize regions after natural disasters
-keeping monopolies with internet access and information centralized and search engine crawlers centralized
-officially sponsored "money laundering"
-backstopping credit chargebacks
-frivolous legal costs (lawsuits bogging the system down)
-state-sponsored corruption and unofficial corruption (governments and gangs, banks and conartists)
-retirement obligations (debasement in value to keep up with payments from government or other retirement-obligations)
-fake credit (goods being transacted with credit-loss, replaced by inflation of monetary base rather than bringing perpetrators & source to justice)
-using enforcement labor to freeze accounts and assets and take away your money


Bitcoin, systemically, is free from these limitations and burdens.

[careCentre]

The actual market for investment in the cryptocurrency is different as compared to the traditional market. For the stock trading markets, companies do a lot of transactions and they have an asset. This makes it possible to measure their intrinsic value. But here, there is no company and it is a market of digital currency investment that has no asset, as a result, no cryptocurrency will not have any intrinsic value not only bitcoin.

[D3F4L7 RAT]

Others above gave good points, however in the constraints of this world where nothing is backed by physical commodity, intrinsic value can be derived in relational terms to fiat supply. If fiat globally were fixed, bitcoins price would remain low. However, the opposite is true, fiat (includes credit) globally expands in an unchecked manner and if you wait a decade, the supply is up exponentially....this in turn has led to exponential growth in the deflationary, fixed supply currency called Bitcoin. Bitcoins price will always rise as long as we have a global dominated central-bank led fiat currency world.

If fiat/credit supply stopped growing, then house prices, stock prices, financial assets would crash significantly in value.

All other altcoins in relation to bitcoin are worthless - more on this below;

Popularity will begin to explode with lightning in the next year.
Bitcoin's lightning network is emerging where fees will be tiny and cross-chain atomic swaps for decentralized exchange.

Bitcoin's blockchain is the only unique one to provide the most security in a decentralized, global, incentivized fashion.

Bitcoin's price will be at the very least more than 4 times (400%) of todays price in 5 years.



Governments and laws are controlled by the central banks. Bitcoin is an anti-establishment revolution that has already solidified itself worldwide.

Bitcoin cannot be controlled. It cannot be banned. It cannot be made illegal. And conversely it cannot be legalized. It just simply is. And people can always use it.

Those trying to undermine and manipulate bitcoin stem from the central bank system around the world;
-the central banks dictate policy to all the operating big banks around the world and have essentially tried their best to ban bitcoin related transactions for more than four years straight, ever since 2013, and have failed at stopping bitcoin's growth, adoption, and popularity
-the central banks fund efforts to undermine bitcoin, providing plenty of capital and liquidity to private companies and venture backed groups such as Digital Currency Group (they own Coinbase, GDAX, Kraken, Bitpay, and media outlet Coindesk) and also Roger Ver/Bitmain to undermine and break the bitcoin protocol and/or manipulate trade

Above are just small examples.

First, educate yourself and then others. Please checkout the link to the bitcointalk post in my signature titled: How to teach Bitcoin to a 7 year old.

Bitcoin is a secure, decentralized, trustless and open system which cannot be banned nor controlled.
 
Bitcoin is ultimate store of value and its popularity has strengthened over time and maximizes value compared to any other altcoin...
Why are altcoins relatively worthless compared to bitcoin?:
If it can be shutdown, and have assets frozen by a bank or government, there would be no value
If it wasn't secure, there would be no value.
If it wasn't immutable, there would be no value.
If it wasn't globally distributed, there would be no value.
If it wasn't so strong, open-source decentralized and unstoppable, there would be no value.
If it wasn't so scarce, there would be no value.
If it was easy to spam transactions, there would be no value
If it required a central 3rd party to function, there would be no value
If it was stopped after all major banks on Earth banned in 2013 to today, there would be no value. (say "bitcoin" when transacting and watch the block of the transaction. simple fix=never mention "bitcoin").
If it didn't have the history of 8+ years (and still no hacker can exploit bitcoin blockchain), there would be no value
Bitcoin is on the verge of lightning network release rendering altcoins as only backup plan options if not dead.
If it was exactly like fiat and only did transactions, there would be no value.

Bitcoin's value is worth hundreds of billions USD today. Altcoins however are scams, weak, pyramid schemes not offering these values.

Bitcoin has all the characteristics needed combined to hold the most value and increasing more than any other financial-asset option coming from the manipulated fiat central-banking debt-system. (more than stocks, more than houses, more than gold).

For global fiat (US Dollars, Indian Rupees, Chinese Yuan, etc), the fiat bubble system broke a couple of decades ago.

Fiat around the world is forced to inflate issuance as its heavily infested, burdened and broken with (the following whether good or bad):
-regulatory burden on fiat banks & system (incredibly costly)
-inflating fiat to keep house-prices from collapsing
-inflating fiat to keep stock market rising
-financing conflicts, bombs, and "aid"
-backstopping insurance frauds
-costs of auditors and budgetors and accountants checking the same thing in governments and businesses
-big insurance loss-events
-unemployment & other welfare costs
-stabilize regions after natural disasters
-keeping monopolies with internet access and information centralized and search engine crawlers centralized
-officially sponsored "money laundering"
-backstopping credit chargebacks
-frivolous legal costs (lawsuits bogging the system down)
-state-sponsored corruption and unofficial corruption (governments and gangs, banks and conartists)
-retirement obligations (debasement in value to keep up with payments from government or other retirement-obligations)
-fake credit (goods being transacted with credit-loss, replaced by inflation of monetary base rather than bringing perpetrators & source to justice)
-using enforcement labor to freeze accounts and assets and take away your money


Bitcoin, systemically, is free from these limitations and burdens.

WOW, If I have some merit I will give you some mate, this is a very intereresting and an eye opener for people like me who are studying the nature of bitcoin and any other alternate crpytocurrencies. An easy and quick to understand synopsis of what bitcoin is.

[HSRP]

I do agree with the article. It is true that bitcoin don’t have any intrinsic value. But the thing you have to understand everything needs a time. Now it is exchanged with other fiat money but in future I believe it will be the medium of exchange.

In the future, they will not be able to replace fiat, because the BTC has a lot of inadequacies in daily transactions, the cost of equipment technology and the limitations of some older people in terms of technology knowledge. will have difficulty in trading. and in the world have not fully agreed to accept the BTC.

[pooya87]

those are not "questions". normal people don't think about "intrinsic value" instead they look at usability, potential, profit, ...
unfortunately some people have heard the word FUD and think if they constantly create nonsense topics and talk about weird stuff and say things like "bitcoin has no intrinsic value", "bitcoin is dying", ".. is dead", "altcoins are better",.... they can affect the price in their own favor!

[cryptoroi]

Nowadays peoples are connecting with bitcoin. It is a digital currency .so if bitcoins popularity increase then automatically bitcoins intrinsic value will also increase.

[leoliln45]

I agree. Probably, bitcoin doesn't have intricsic value as it fluctuates too much. The price is not consistent. But, it created opportunities for the investors to make good amount of profit.

[AlphaOM]

Bitcoin is intrinsic with the resources that people invest in it. Therefore, its value also depends on the level of human trust in it.

[palle11]

Talking about the intrinsic value of fiat, it is the monetary value which is likely not to be volatile in a very long time. In the part of bitcoin, its volatility is high but I think we should stop criticizing bitcoin because that pattern is not likely to change.

[johnethearn]

Many investors believe that cryptocurrency lacks intrinsic value. It is used only for transaction. Many thinks that, only the coins, that were available once upon a time, made of gold and silver had intrinsic values.

[Aveatrex]

Many quarters object to bitcoin on the basis it does not have "intrinsic value".

What then is is the intrinsic value of (fiat) paper money?

The ability to arrange the use and value of all other things.

Bitcoin is immune to multitude of actions that a gov may take by quantitative easing, interest rates, capital controls, etc and emerges as a better means to value all other things and arrange their use.

A central plank of bitcoins intrinsic value and arrange the use of all other things.

There's a multi Trillion proposition right there.

They are talking like fiat money have intrinsic value... Nonsense.
As Voltaire said:

Paper money eventually returns to it's intrinsic value -zero

Those people are just trying to spread fud so that they can put their hands on some Bitcoins (lol)

[aardvark15]

Many quarters object to bitcoin on the basis it does not have "intrinsic value".

What then is is the intrinsic value of (fiat) paper money?

The ability to arrange the use and value of all other things.

Bitcoin is immune to multitude of actions that a gov may take by quantitative easing, interest rates, capital controls, etc and emerges as a better means to value all other things and arrange their use.

A central plank of bitcoins intrinsic value and arrange the use of all other things.

There's a multi Trillion proposition right there.

Bitcoin’s value comes from its demand. People demand it as a store of value and as a method of sending funds to others. This is the same as paying PayPal to provide the service of transferring money to another person. The ability of PayPal to provide that service is worth something to its customers. We are also willing to use Bitcoin for the service that it provides to store our money safely.