Bitcoin has no intrinsic value

[hatshepsut93]

The term intrinsic value has two meanings - financial and numismatic. Financial meaning only applies to stocks and other financial instruments, it's basically an objective value of how profitable this instrument can be based on its economic performance. This is not applicable to Bitcoin, because Bitcoin generates profit purely from speculative trading. The second meaning, the numismatic one, applies to coins - it is the value of the metal a coin is made of. Bitcoin is digital, so it has no intrinsic value in this sense.

There's nothing wrong with not having intrinsic value. Gold doesn't have one, gems don't have one. In fact it's good that Bitcoin is money in pure form, just like fiat money, because other uses don't interfere with its supply and demand.

[Western_Boris]

Bitcoin generates profit purely from speculative trading.

This is BS. Bitcoin generates profit from supply and demand. And "speculative trading" is not the main use of Bitcoin. Sure some people use it that way too but it is ALSO used as a currency and savings account. Look Africa. These examples prove your "purely speculative trading" claim very wrong.
https://youtu.be/qvwqoYSani0

[Bitcoin_Arena]

Is it really the best way to invest your money?

Is it a must that you should "invest" in Bitcoin?

If you feel there is a much better way which you think you know, then put your money there. Nobody is forcing you to own some bitcoins. It's a free world.

Because of the way Bitcoin generates value or becomes more expensive,

Ok, Mr Financial advisor, explain to us how Bitcoin generates value?

it could potentially lose all its value and became worthless.

Oil could lose value and become worthless
Amazon stocks could lose value and become worthless
Gold could also lose value and become worthless
So what's your point?

Who assures you that this will not happen?

The same small voice that assures you that Bitcoin could lose value and become worthless.

[Mpamaegbu]

bitcoin is not even an investment. Bitcoin is a currency and as the only existing decentralized censorship resistant payment system it offers a lot of utilities for people all around the world and utility means intrinsic value.

That's been the biggest problem newbies have been facing, bitcoin is advertised to them as an investment that will give them a lot of money out of thin air!

It's true that the payment system was the real intention of why Satoshi created it but we all know that it's really not what has given Bitcoin the value it has today. It derives its value from the perceived angle of investment. It's not only newbies who get on the bandwagon that it's an investment opportunity, veterans too are involved. If Bitcoin were solely for decentralized payment system as conceived then it should be like stable coins whose value remain the same or almost the same year in and year out.

[tygeade]

bitcoin is not even an investment. Bitcoin is a currency and as the only existing decentralized censorship resistant payment system it offers a lot of utilities for people all around the world and utility means intrinsic value.

That's been the biggest problem newbies have been facing, bitcoin is advertised to them as an investment that will give them a lot of money out of thin air!

It's true that the payment system was the real intention of why Satoshi created it but we all know that it's really not what has given Bitcoin the value it has today. It derives its value from the perceived angle of investment. It's not only newbies who get on the bandwagon that it's an investment opportunity, veterans too are involved. If Bitcoin were solely for decentralized payment system as conceived then it should be like stable coins whose value remain the same or almost the same year in and year out.

I believe that he created it as a better currency and not as a payment system. If you think that the sole purpose of satoshi was to create something that you could earn profit from, then you never understood what he stood for. The decentralization part of bitcoin is the main reason, and it is a currency which means that there is a currency in the world where politics could not impact it and change it.

In regular nations, we keep seeing nations print money all the time and this devalues currency and the worse they act towards money and economics, the poorer you get whereas in crypto nothing like that could happen and nobody can print it, which is the power of bitcoin and why it was created.

[Lewan]

Everything can lose its value in an instant. For example, why is gold valuable? Because it's scarce. Why is Bitcoin valuable? Because it's useful and because it's rare. These are the factors that make a product valuable.

[franky1]

the PRICE is speculative.

EG
gold PRICE speculates between $1k to $2k
but golds VALUE sits at about $900..
yep no one can get gold for less than $900 and so golds underlying VALUE is $900

if while the lowest cost of acquisition was $900, the price speculated to say $3k then that difference of $2.1k speculation is a "bubble" where that hyped up PRICE can crash back down below $2k and get close to the $900 value at worse case.

bitcoins VALUE is near $30k. and while the price is at the moment $40k. it has reached $70k which that $70k PRICE was a bubble that corrected down again.
but the price has not dropped below the $30k value while the VALUE amount was at that $30k amount

..
bitcoins intrinsic value is not the price.. the 'store of value' amount of bitcoin is not the price.
once people realise that the 'value' and price are different measures. then people can see the difference.
and when people learn what the real VALUE number is. then when the PRICE moves up but the VALUE is not moving up at the same scale/rate. people can realise when the PRICE is speculating into the realms of bubble

in short..
yes the PRICE is based on random sentiment and sometimes empty reasons.. but the VALUE has reasons and math and actual costs and physical reason for existing

[thetechnologyvault]

I've been following Bitcoin and the cryptocurrency industry since 2009, and I'm still not sure what to think about Bitcoin long-term as a store of value. Economically speaking, it seems like it will have the same result as fiat currencies that are not tied to anything of intrinsic value.

In many of the conspiracy channels I follow on Telegram, there is a lot of discussion about Bitcoin losing all of its value as part of a thing called Devolution, which refers to the idea that Donald Trump and the US and other white hat militaries throughout the world are running a dragnet to catch all the bad guys.

As crazy as that sounds, there are some things that have been predicted about the crash of Bitcoin ( 1: the Three Gorges Dam breaking and destroying most of the Bitcoin mining servers; and 2: Bitcoin becoming environmentally unusable compared to alternatives) that seem like legitimate threats.

[Pmalek]

Start by understanding how new Bitcoins are created or generated. The amount increases through mining. How do you mine Bitcoins? Can you do it with an old phone? No. Can you do it with a cheap laptop nowadays? No. Can you do it with a brand-new computer? No.

So what do you need? You need ASIC miners who are developed just to mine Bitcoin. Are they cheap and available on shops worldwide? No they are not. They are quite expensive and in most cases need to be pre-ordered because there aren't enough to support the demand. Is 1 ASIC miner enough? No, you need hundreds and thousands of them to be able to compete against the biggest mining firms in the world.

That's just one part of the story. You also need plenty or electricity to power up these hungry freaks of nature. Electricity costs money. As you can see, a lot of work needs to be done just so that you can have a chance to take part in a lottery, where if you are lucky you will win the main prize. The main prize is the block reward. Once you get your hands on those coins, you know you didn't get them cheaply with all the work and money you spent to prepare for that moment. Once they are in your wallet, you will value them.

Before anyone says you don't need thousands of miners to mine. I know that. You can have just one and divert your hashrate towards a mining pool where you will get an equivalent share of the coins once they find a block. Solo mining is an impossible task nowadays. 

[franky1]

golds intrinsic value(financial) is derived from its mining costs of diesel and sluice machines
golds intrinsic values(feature) is derived from its use in the electronic and jewellery industry

bitcoins intrinsic value(financial) is derived from its mining costs of electric and asic machines
bitcoins intrinsic values(features) is derived from its use as a payment and investment utility

unlike fiat which requires people to hire lawyers and seek financial accountants and also bank managers to set up trusts and off shore holdings. bitcoin can do all this for free by setting up a multisig

unlike fiat where inheritance plans and such require lawyers, bank managers and accountants. bitcoin can set this up using timelocks and privkeys distributed between family

bitcoin can do many many things by itself without middlemen that fiat cant
bitcoin can even do more financial movements than the physical gold. cheaply

yea you cant make jewellery out of bitcoin(tangible) but you can easily prove ownership of it
yep a gold coin/ingot/bar has no identifier that puts a claim to any certain owner. so take it out of your house safe, and you have a hard time proving who owns it.
(try to engrave it.. someone can easily smelt it down and remove any identifier)
bitcoin however can easily prove ownership via signatures, and near impossible for someone to remove that identifier or move the value to their own identifier without your authorisation

[hatshepsut93]

This is BS. Bitcoin generates profit from supply and demand.

Supply and demand is the mechanism of price discovery. The profit comes from buying low and selling high. This is known as speculation. There's no other way to profit from owning Bitcoin, aside from shitcoin forks and airdrops, that are rare and unpredictable.

And "speculative trading" is not the main use of Bitcoin. Sure some people use it that way too but it is ALSO used as a currency and savings account. Look Africa. These examples prove your "purely speculative trading" claim very wrong.
https://youtu.be/qvwqoYSani0

Who said anything about Bitcoin use? It's a topic about the origins of Bitcoin's value.

[nankers]

In my view, What is the intrinsic value of Bitcoin?
Many argue that Bitcoin has no intrinsic value because it is not backed by anything and does not generate cash flow.
Moreover, Bitcoin is actually backed by a very secure network that is used as a preeminent asset. We can see that there are five factors that become the intrinsic value of Bitcoin, namely:
1. Security
2. Decentralization
3. Scarcity
4. Eternity/ Immutable
5. Utilities

Conclusion
The intrinsic value of Bitcoin cannot be compared with other traditional assets because Bitcoin is a new type of asset. Bitcoin is still trying to find a place among other assets, and it is too early for us to determine Bitcoin's intrinsic value unanimously. The intrinsic value of bitcoin is likely to change based on people's perceptions and the future growth of Bitcoin adoption.

[Kakmakr]

"In finance, the intrinsic value of an asset usually refers to a value calculated on simplified assumptions. For example, the intrinsic value of an option is based on the current market value of the underlying instrument, but ignores the possibility of future fluctuations and the time value of money." - Source : https://en.wikipedia.org/wiki/Intrinsic_value_(finance)

Now let's make examples of other digital things that has value : Skins and add-ons in Online Games like Counter-Strike. (People pay $10 000 for a unique skin for their 9mm) / Virtual property in the Metaverse has market value, because there are a market for it.

You do not have to touch something ..for it to have value. 

[witcher_sense]

In my view, What is the intrinsic value of Bitcoin?
Many argue that Bitcoin has no intrinsic value because it is not backed by anything and does not generate cash flow.
Moreover, Bitcoin is actually backed by a very secure network that is used as a preeminent asset. We can see that there are five factors that become the intrinsic value of Bitcoin, namely:
1. Security
2. Decentralization
3. Scarcity
4. Eternity/ Immutable
5. Utilities

Conclusion
The intrinsic value of Bitcoin cannot be compared with other traditional assets because Bitcoin is a new type of asset. Bitcoin is still trying to find a place among other assets, and it is too early for us to determine Bitcoin's intrinsic value unanimously. The intrinsic value of bitcoin is likely to change based on people's perceptions and the future growth of Bitcoin adoption.

For an asset to have intrinsic value it shouldn't necessarily be backed by something or generating "cash flow." Take gold, for example: what gold is backed by? Obviously, this would be a stupid question to ask because it is gold that has always been used to support the value of other things but not the other way around. Does gold have intrinsic value? If we forget for a moment that value is always subjective, then we may say that it is the unique physical characteristics of gold that give it the intrinsic value that the vast majority of people recognize. Can we say the same when it comes to bitcoin? Like gold, Bitcoin does have unique traits that some people have already managed to understand and accept as part of their life. However, the problem is these unique characteristics of Bitcoin can't exist on their own, they can't survive without human beings supporting them by running full nodes, mining, and forming the necessary community of developers and users. In other words, bitcoin doesn't have intrinsic value because it disappears if stopped being supported.

[franky1]

intrinsic value, is the value in-of-itself..
so all the idiots thinking bitcoin needs to be backed by something separate.. have no clue

if you think intrinsic value is based on some thing separate a thing needs to be backed by that has nothing to do with the thing your valuing..  your wrong

EG bank notes in the 1920's intrinsic value was not that they were backed by gold.
banks notes intrinsic values(features) was the laws that ensured that bank notes were usable to pay court fines, taxes and retail products far easier than another currency.
the intrinsic value(financial) is based on things like minimum wage that give it a notable minimum value.

bitcoin would not exist if it were not for the mining. so mining is the essential thing of bitcoin

take ethereum. its intrinsic value is also PoW mining which gives ethereum the base value of atleast $2k. (no im not talking about the $3k price)
when ethereum 'detonates' to become PoS. that intrinsic value switches to PoS which has a value in of itself of ~$1.50 yep over 1000x less value. meaning that you will expect a huge price correction after the detonation because everyone suddenly PoS signing blocks for only a couple dollars would happily sell down the market price all the way down to maybe $3 and still profit

yep PoS intrinsic value is far far less than PoW intrinsic value.
as for the intrinsic values(features) well ethereum is still begging the many sidechains and tokenisations so ethereums intrinsic values stay the same, but this is not enough to keep the value(financial) at the same support

[fiulpro]

Is it really the best way to invest your money?

Because of the way Bitcoin generates value or becomes more expensive, it could potentially lose all its value and became worthless.
Who assures you that this will not happen?

With the news like :
https://www.business2community.com/crypto-news/michael-saylor-says-its-bitcoin-initiative-has-been-a-success-for-microstrategy-02468422

https://www.google.com/amp/s/cointelegraph.com/news/bitcoin-hodlers-targeting-100k-is-what-s-preventing-40-price-drawdown-data-suggests/amp

Companies and people are already investing in Bitcoins even right now and are looking forward to grow their investments rather sell them, sooner or later one has to understand that it's more fragile to invest in fiats since government does not have a control of war and pandemic or things like that. If the world collapse we wouldn't have much to hang with therefore with Bitcoins with many whales unwilling to sell their coins we still have a chance to not only invest and grow but also answer such questions with solid ground.

Do you back up Gold ?
No ! Why ?
That's because gold is essential, it has its own intrinsic value which means that it does not need the backing up. It's the same with Bitcoins to an extent. It's intrinsic value comes from the people who are holding it and who trusts it.

[suzanne5223]

Is it really the best way to invest your money?

Says who that Bitcoin has no intrinsic value? Is this your lack of understanding of Bitcoin's potential impression or you're just a troll?
You don't need to ask if Bitcoin is the best way to invest money, all you need to do is to check the performance of the Bitcoin market when the world businesses and economies barely survive during the total lockdown.
Check the performance of the market over the years right from its creation and the number of people who are making financial freedom through Bitcoin.

Because of the way Bitcoin generates value or becomes more expensive, it could potentially lose all its value and became worthless.
Who assures you that this will not happen?

If Bitcoin will be worthless, it would vaporize when the government, SEC, the Chinese shut down mining, etc. Besides, the government now understands that Bitcoin is inevitable and if it is going to be worthless the institutions won't be the major investors in this year's market.

[DOH!]

Is it really the best way to invest your money?

I think bitcoin is not the best way to invest your money.  You still have a lot of options and decisions to make but the free market is the core of bitcoin, the reaction to bitcoin's value is the free market.  Fundamentally in my opinion, bitcoin is the hope to change the financial game - where the free market gets a free currency.  Hesitation is a normal state in investing but looking at bitcoin's value history represents a testament to the fact that bitcoin's real value derives from the beliefs people aspire to.

[BitcoinFX]

"... #Bitcoin is a commodity money, "digital cash system".

- https://en.wikipedia.org/wiki/Commodity_money

"Commodity money is money whose value comes from a commodity of which it is made."

The intrinsic (base) value of bitcoin is from electricity, CPU time and cryptography (math / pow).

https://en.wikipedia.org/wiki/Commodity_money "

- https://twitter.com/BitcoinFX_XBT/status/1510943103431380992

Commodity money wiki - Excerpt: "Commodity money is money whose value comes from a commodity of which it is made. Commodity money consists of objects having value or use in themselves (intrinsic value) as well as their value in buying goods. This is in contrast to representative money, which has no intrinsic value but represents something of value such as gold or silver, in which it can be exchanged, and fiat money, which derives its value from having been established as money by government regulation. ..."

...

"When satoshi wrote the whitepaper and launched #Bitcoin #BTC had zero dollar value.

The first exchange rates were calculated as follows ...

- https://web.archive.org/web/20091229132610/http://newlibertystandard.wetpaint.com/page/Exchange+Rate

Excerpt: "Our exchange rate is calculated by dividing $1.00 by the average amount of electricity required ..." ..."

- https://twitter.com/BitcoinFX_XBT/status/1510945795255775239

...

" ... "... to run a computer with high CPU for a year, 1331.5 kWh, multiplied by the the average residential cost of electricity in the United States for the previous year, ..." ..."

- https://twitter.com/BitcoinFX_XBT/status/1510946020640841730

...

"Excerpt: "... $0.1136, divided by 12 months divided by the number of bitcoins generated by my computer over the past 30 days."

- https://web.archive.org/web/20091229132610/http://newlibertystandard.wetpaint.com/page/Exchange+Rate

Technically only bartering existed when satoshi released #Bitcoin to the public."

- https://twitter.com/BitcoinFX_XBT/status/1510946817227333635

...

"Arguably, bitcoins have always had a (base) "intrinsic value" as intangible commodity money, as above.

Of course, today's pricing stems from other market factors, finite supply (supply and demand) etc, etc.

Something is only ever worth what someone else is willing to exchange!"

- https://twitter.com/BitcoinFX_XBT/status/1510948619536547843

 

[bluebit25]

Is it really the best way to invest your money?

Because of the way Bitcoin generates value or becomes more expensive, it could potentially lose all its value and became worthless.
Who assures you that this will not happen?

I can see the need for low-cost, cross-border money transfers, so do you think this has intrinsic value
Nowadays, people are gradually getting a better view of Bitcoin. With its massive adoption, the demand for it is not small, and the supply is limited, not to mention the loss due to the holders, the value of BTC will be able to go further.