Bitcoin skepticism: Economics vs Philosophy

[TypoTonic]

I stumbled upon this article and I thought that it was a good read. It attempts to dispute the claims of award winning economists regarding Bitcoin in a different light. In this thread, I will provide a summary of the article and include additional information and personal insights that will support the philosophical counterarguments. I will link all of the resources that I used as reference.

Link to the original article can be found here.


Here are the main concerns of these Nobel Laureates about Bitcoin:

Eugene F. Fama (Nobel 2013) Photo by Bengt Nyman

[...] cryptocurrencies are such a puzzle because they violate all the rules of a medium of exchange. They don't have a stable real value. They have highly variable real value. That kind of a medium of exchange is not supposed to survive.[1]

[...] Bitcoin and other cryptocurrencies served no useful purpose, [...] their market value rested on nothing but "technobabble and libertarian derp".[2]

Paul Krugman (Nobel 2008) Photo by Ed Ritger

Joseph Stiglitz (Nobel 2001) Photo by Raimond Spekking

Bitcoin is successful only because of its potential for circumvention, lack of oversight... So it seems to me it ought to be outlawed. It doesn't serve any socially useful function.[3]

I'm interested in bitcoin as a sort of bubble. It doesn't mean that it will disappear, that it'll burst forever. It may be with us for a while. To me, it's interesting as another example of faddish human behavior. It's glamorous.[4]

Robert J. Shiller (Nobel 2013) Photo by Bengt Nyman

From the views of these economists, six arguments were formed and faced against Bitcoin.

╔	══════════════════	╦	══════════════════════════════════════════	╗
║	Charge	║	Bitcoin	║
╠	══════════════════	╬	══════════════════════════════════════════	╣
║	No intrinsic value	║	Bitcoin yields nothing	║
╠	══════════════════	╬	══════════════════════════════════════════	╣
║	Extreme volatility	║	Its price is violently unstable	║
╠	══════════════════	╬	══════════════════════════════════════════	╣
║	Inefficiency	║	It burns power and settles slowly	║
╠	══════════════════	╬	══════════════════════════════════════════	╣
║	Speculative bubble	║	Driven by hype and herd behavior	║
╠	══════════════════	╬	══════════════════════════════════════════	╣
║	Criminal use	║	Attractive to money launderers and hackers	║
╠	══════════════════	╬	══════════════════════════════════════════	╣
║	Regulatory risk	║	Vulnerable to sovereign bans	║
╚	══════════════════	╩	══════════════════════════════════════════	╝

This table was made using Signatools Table Generator by masulum

While these may be true in economical standards, we try to view it in a different angle by comparing Bitcoin against gold which faced and yet endured the same skepticism throughout history, and then lay down a counterargument in philosophical terms.


1. No intrinsic value

"Bitcoin has no intrinsic value. Unlike a share of stock, it pays no dividend. Unlike a bond, it pays no interest. Unlike land, it yields no crops. What it offers is only the possibility that someone else will accept it later."

Comparison to gold:
John Maynard Keynes argued that gold has no monetary qualities and he called the gold standard a "barbarous relic". Gold was barren and generated no income. It could not provide enough liquidity in a crisis. It was viewed in a modern economic environment that paper currency is the money of choice.

Philosophical counterargument:
"If the absence of yield disqualifies Bitcoin, then gold should have been disqualified long ago. Gold endures not because it is 'productive' but because people believe it secures value across time. Its real worth lies in permanence, incorruptibility, and rarity. Bitcoin represents scarcity in the digital world, just as gold once represented scarcity in the physical."

"Value itself has never depended only on yield. Value depends on what a civilization chooses to revere. The store of value in a civilization of metal and empire was gold, but the store of value in a civilization of data and networks is digital scarcity."

Additional information & personal insights:

• Bitcoin was first introduced to be an electronic peer-to-peer cash system. However, this has changed over time into being portrayed as "digital gold" or "store of value".
• Gold's lustrous and metallic qualities, relative scarcity, and difficulty of extraction add to the perception that gold is a valuable commodity.^[5] Bitcoin's resistance to censorship, limited supply, and difficulty of mining potentially makes it a superior store of value in the digital age.

2. Extreme Volatility

"Bitcoin's history of booms and crashes: $20,000 in 2017, down to $3,000 the year after; $69,000 in 2021, then collapsing, then soaring past $124,000 in 2025."

Comparison to gold:
"Gold's price climbed from $35 an ounce in 1971 to $850 in January 1980. Then, interest rates were raised to nearly 20 percent to crush inflation. Gold collapsed, losing half its value in a year, and languished for decades."

Philosophical counterargument:
"The household of economics is right that such turbulence disqualifies Bitcoin as a unit of account. But looking across history, volatility is not the end of the story. It is often the way a new asset fights for legitimacy. Gold survived its storms to become the archetype of permanence. Whether Bitcoin will do the same is not yet known. But the charge of volatility alone is no prophecy of death."

Additional information & personal insights:

• Bitcoin's volatility remains higher than traditional assets like gold and global equities, but consistently decreased over time. Bitcoin's volatility declined from around 95% in its early years to approximately 45-55%, indicating a maturing market. (reference below)
• While bitcoin’s volatility is high in absolute terms, it’s in the same realm as many familiar investments, like certain mega cap tech stocks such as Nvidia, Tesla, and Meta.^[6]

Volatility of Bitcoin alongside gold & global equities

Bitcoin’s volatility vs. certain mega cap tech stocks

3. Inefficiency

Bitcoin's energy-intensive Proof of Work (PoW) mining is wasteful. It takes a lot of time before transactions are confirmed and fees can be very high when the network is congested, deeming it unsuitable as a medium of exchange for day to day transactions.

Comparison to gold:
Gold mining was inefficient, having thousands of miners perish underground. It is harmful to the environment as well, destroying hillsides, flooding tunnels, and collapsing mountains. Even after mining, it remains inefficient to move, facing pirate attacks and storms/hurricanes at sea. Storage was also a problem since it cost millions to build a fortress to secure mined gold.

Philosophical counterargument:
"If inefficiency alone disqualified an asset, gold should have vanished centuries ago. Yet it endured because inefficiency can become proof of scarcity and incorruptibility. Bitcoin shares that paradox. Its energy-intensive logic is a costly signal guaranteeing decentralized security."

• 52.4% of global Bitcoin mining is now utilizing renewable electricity sources.^[7]
• Miners in Texas, Iceland, and Canada integrates renewable energy with Bitcoin mining to reduce costs, lower carbon footprints, and enhance grid stability.^[8]
• A mining farm in Finland utilizes 100% renewable energy and uses the waste heat to warm entire cities.^[9]
• Ethereum, the second-largest crypto, has transitioned to proof-of-stake, cutting energy usage by over 99%.^[10]

"Bitcoin mining, when responsibly harnessed, can become a tool for sustainability. Inefficiency is often the price we gratefully pay for trust, and clean energy adaptation suggests even that price can be repurposed for good."

Additional information & personal insights:

• Technological developments like Bitcoin's Lightning Network significantly improves transaction speed and reduces transaction fees.
• Ethereum's transition to Proof of Stake (PoS) proves that even major cryptocurrencies can shift toward energy-efficient consensus mechanisms.
• Bitcoin’s latest energy usage is estimated to be around 190 Twh, with a minimum consumption of around 120 Twh^[11]. This remains relatively close to gold mining at around 130 TWh^[12] and much lower than data centers at around 400 TWh.^[13]

4. Speculative Bubble

"Bitcoin is nothing but a bubble. Prices soar on waves of hype, then collapse when the crowd loses faith."

Comparison to gold:
The gold rush brought an influx of people migrating in regions where gold was discovered with the hope of getting rich, but only a few "struck gold". The comparison in Extreme Volatility section also applies here, which is referred to as the gold bubble of the 1970s.

Philosophical counterargument:
"Calling something a bubble is not the same as proving it worthless. Bitcoin's price might be narrative-driven, but this is how societies test new stores of value. By rushing in, burning out, and returning if the story still compels."

Additional information & personal insights:

• Bitcoin has demonstrated resilience against the bubble narrative. It has recovered from several major price crashes while bringing new institutional participants.

5. Criminal use

"Like gold doubloons in a pirate chest, bitcoins in a hacker’s wallet carry no name or serial number." Bitcoin can be used to facilitate tax evasion, money laundering, and illegal transactions. Its cross-border functionality enables criminals to operate across different jurisdictions.

Comparison to gold:
Gold was attractive to pirates and smugglers. It was accepted globally and impossible to trace since gold bars were melted down and then recast.

Philosophical counterargument:
"If criminal use alone disqualified an asset, gold would never have become the foundation of central bank reserves. The same anonymity that offends regulators can, under new conditions, become the very reason for trust. Assets that embody scarcity and portability are always attractive to both outlaws and states. The question is whether the story of digital scarcity proves strong enough that, like gold, it outgrows its outlaw phase and becomes a pillar of the legitimate system."

Additional information & personal insights:

• Unlike physical cash, Bitcoin and other cryptocurrencies operate on public ledgers. Law enforcement agencies can use blockchain analytics tools to track illicit flows.
• Illicit transactions accounted for just 0.14% of all crypto transaction volume in 2024, down from 0.61% in 2023. These rates consistently remain below 1% historically.^[14]

6. Regulatory risk

Bitcoin and cryptocurrencies exist primarily to avoid regulatory oversight rather than to solve legitimate economic problems.

Comparison to gold:

• "In 1933, President Franklin D. Roosevelt signed Executive Order 6102. Americans were ordered to deliver their gold coins, bullion, and gold certificates to the banking system. Willful hoarding could bring up to 10 years in prison or a $10,000 fine."^[15]
• "The Gold Reserve Act of 1934 transferred ownership of all monetary gold to the U.S. Treasury and revalued it from $20.67 to $35 per ounce, devaluing the dollar and ending routine redemption."^[16]
• In 1971, President Richard Nixon suspended the convertibility of dollars held by foreign governments, which means that they could no longer exchange them for gold. "In Jamaica 1976, IMF members legitimized floating exchange rates and formally de-monetized gold in Fund law. Gold remained valuable, but no longer as money by treaty."^[17]

Philosophical counterargument:
"If a democratic government under stress could outlaw private hoards and rewrite the dollar's metallic link, then 'regulatory risk' isn't a debating point. It's monetary history."

"Law does not always kill what it touches. Roosevelt's order did not make gold worthless; it repositioned it. Jamaica did not end gold's story; it changed its function. So too with Bitcoin. If our civilization truly values digital scarcity, in time, law will channel that belief into institutions. If it does not, the law won't need to ban it; indifference will. Where collective belief settles, law usually builds the walls."

Additional information & personal insights:

• The Financial Action Task Force (FATF) continuously updates its global standards against money laundering and terrorist financing to improve risk assessments of virtual assets and strengthen enforcement across borders.
• Major exchanges now implement comprehensive KYC and AML procedure and follows a regulatory framework.
• Bitcoin and other cryptocurrencies serve as preservation of value in countries with high inflation like Venezuela and Argentina, as well as enabling access to financial services in countries with limited banking infrastructure like parts of Africa.

I would love to hear your opinion about these philosophical counterarguments against economic views about Bitcoin. Feel free to share additional knowledge and information as well since I might have missed a lot more.


References:
[1] Transcript of Why This Nobel Economist Thinks Bitcoin Is Going to Zero, with Eugene Fama
[2] Opinion | How 2024 Became a Crypto Election
[3] Watch Stiglitz Says Bitcoin 'Ought to Be Outlawed'
[4] The bitcoin bubble is an example of 'faddish human behavior:' Shiller
[5] Why Has Gold Always Been Valuable?
[6] Bitcoin volatility guide: Trends & insights for investors
[7] How is Bitcoin mining moving toward sustainability with 52.4% renewable energy?
[8] How is renewable energy stabilizing the grid for Bitcoin mining?
[9] Bitcoin Mining: A Key to the Energy Transition and Economic Opportunities
[10] Ethereum’s Transition to Proof-of-Stake: Assessing the Impact on Energy Consumption and Network Security
[11] Bitcoin Energy Consumption Index
[12] Bitcoin versus Gold
[13] Energy demand from AI
[14] 2025 Crypto Crime Report
[15] Executive Order 6102—Forbidding the Hoarding of Gold Coin, Gold Bullion and Gold Certificates
[16] Gold Reserve Act of 1934
[17] Nixon Ends Convertibility of U.S. Dollars to Gold and Announces Wage/Price Controls

[Alpha Marine]

This article was a very nice read, I must say. I didn't realise when I came to the end of the article because I found it so interesting.

Every currency in the world today is something that has value simply because people accept it to mean something. If the whole world saw a dollar as a piece of paper and as just numbers in our devices, it would mean nothing.

That is belief itself — the force that makes shells, metals, paper, or code into money. Belief is not the enemy of value. It is its engine. And where belief settles, law eventually follows. Gold proves the pattern.

Money is simply money because people believe it is. A hundred-dollar bill is just a very well-designed piece of paper if the US and the world recognised something else as its currency. So when people say things like "bitcoin has no intrinsic value' or "it was gotten out of nothing", remind them that every single currency in the world is simply printed out of nothing and only has value because the government and state accept it and believe it.

Bitcoin, in this regard, is no different. The difference is that people didn't need a government or state to recognise it as a currency before it had value. People saw its features and saw the value it has, and believed in it, and as long as people still believe in it, it will not go to zero.

[TypoTonic]

This article was a very nice read, I must say. I didn't realise when I came to the end of the article because I found it so interesting.

Interesting indeed. It is well-written too and doesn't feel like a 20 minute read.

Every currency in the world today is something that has value simply because people accept it to mean something. If the whole world saw a dollar as a piece of paper and as just numbers in our devices, it would mean nothing.

That is belief itself — the force that makes shells, metals, paper, or code into money. Belief is not the enemy of value. It is its engine. And where belief settles, law eventually follows. Gold proves the pattern.

Money is simply money because people believe it is. A hundred-dollar bill is just a very well-designed piece of paper if the US and the world recognised something else as its currency. So when people say things like "bitcoin has no intrinsic value' or "it was gotten out of nothing", remind them that every single currency in the world is simply printed out of nothing and only has value because the government and state accept it and believe it.

Bitcoin, in this regard, is no different. The difference is that people didn't need a government or state to recognise it as a currency before it had value. People saw its features and saw the value it has, and believed in it, and as long as people still believe in it, it will not go to zero.

I share the same sentiment and you were able to put it into words nicely. In my opinion, the value of something depends on what you believe its worth truly is.

[Die_empty]

I share the same sentiment and you were able to put it into words nicely. In my opinion, the value of something depends on what you believe its worth truly is.

It's not strange that these Nobel Laureates speak shit about Bitcoin. They are suffering from intellectual ignorance. Bitcoin has defied most economic laws they are aware of, so they are just confused. Don't forget that some well-known economists have predicted the death of Bitcoin several times, and some of them have even died before Bitcoin. If you compare the effort and resources it takes to mine Bitcoin and what it takes to print fiat money, then you would know that they are biased.

[TypoTonic]

~snip~

It's not strange that these Nobel Laureates speak shit about Bitcoin. They are suffering from intellectual ignorance. Bitcoin has defied most economic laws they are aware of, so they are just confused. Don't forget that some well-known economists have predicted the death of Bitcoin several times, and some of them have even died before Bitcoin.

I think it's because they strictly adhere to economic theories and statistical models. In an interview with Capitalisn't, Nobel Laureate Eugene Fama was asked this question:

Bethany: I think right now Bitcoin has a $2 trillion market cap. It’s the seventh most valuable asset in the world. Would you be willing to call it a bubble?

Eugene F. Fama: I can’t predict when it will bust. I’m hoping it will bust, but I can’t predict it. I’m hoping it will bust because if it doesn’t, we have to start all over with monetary theory. It’s gone. It might be gone already, but you have to start all over.

Fama has his concerns about how cryptocurrencies continue to challenge existing financial theories, stating that they might have to rethink monetary theory entirely if Bitcoin doesn't collapse.

If you compare the effort and resources it takes to mine Bitcoin and what it takes to print fiat money, then you would know that they are biased.

Care to provide any reference for this?

[ultrloa]

I share the same sentiment and you were able to put it into words nicely. In my opinion, the value of something depends on what you believe its worth truly is.

It's not strange that these Nobel Laureates speak shit about Bitcoin. They are suffering from intellectual ignorance. Bitcoin has defied most economic laws they are aware of, so they are just confused. Don't forget that some well-known economists have predicted the death of Bitcoin several times, and some of them have even died before Bitcoin. If you compare the effort and resources it takes to mine Bitcoin and what it takes to print fiat money, then you would know that they are biased.

First they are old and second they don't have any idea about Bitcoin, so its not surprising to see them saying those things because at first place we could see that most of those dudes live in old era which they believe that traditional investment always better for them.

But lots of changes happening and we are now in  modern age on which technology evolves and maybe this people don't understand that Bitcoin is part of the evolution.

If they are still skeptical about this then its fine there are still many people support Bitcoin and its more good to discuss about them rather than arguing to those close minded people since for sure they won't listen.

[TypoTonic]

~

It's not strange that these Nobel Laureates speak shit about Bitcoin. They are suffering from intellectual ignorance. Bitcoin has defied most economic laws they are aware of, so they are just confused. Don't forget that some well-known economists have predicted the death of Bitcoin several times, and some of them have even died before Bitcoin. If you compare the effort and resources it takes to mine Bitcoin and what it takes to print fiat money, then you would know that they are biased.

First they are old and second they don't have any idea about Bitcoin, so its not surprising to see them saying those things because at first place we could see that most of those dudes live in old era which they believe that traditional investment always better for them.

But lots of changes happening and we are now in  modern age on which technology evolves and maybe this people don't understand that Bitcoin is part of the evolution.

If they are still skeptical about this then its fine there are still many people support Bitcoin and its more good to discuss about them rather than arguing to those close minded people since for sure they won't listen.

In this same interview that I referenced in an earlier reply, Fama was actually open to admit that he might be wrong even at the age of 86.


I appreciate the replies, but if you actually read the article or at least my summary, the point is not to attack these economists, but rather to debate their claims, albeit using a philosophical point of view.

What if economics itself does not see the broader picture? Not these Nobel-winning individuals but the discipline as it defines its own rules.

[BIT-BENDER]

I share the same sentiment and you were able to put it into words nicely. In my opinion, the value of something depends on what you believe its worth truly is.

It's not strange that these Nobel Laureates speak shit about Bitcoin. They are suffering from intellectual ignorance. Bitcoin has defied most economic laws they are aware of, so they are just confused. Don't forget that some well-known economists have predicted the death of Bitcoin several times, and some of them have even died before Bitcoin. If you compare the effort and resources it takes to mine Bitcoin and what it takes to print fiat money, then you would know that they are biased.

They are not just suffering from intellectual ignorance they are suffering from stiffness and failure to realise that things are constantly evolving and advancing.
Many of those guys can't come to terms with there being something they don't understand, when Bitcoin is beyond their scope of experience or knowledge they always say bad things about it but slowly they have not choice but to come to terms with it.

[TypoTonic]

~

~

They are not just suffering from intellectual ignorance they are suffering from stiffness and failure to realise that things are constantly evolving and advancing.
Many of those guys can't come to terms with there being something they don't understand, when Bitcoin is beyond their scope of experience or knowledge they always say bad things about it but slowly they have not choice but to come to terms with it.

I kind of agree when you say that Bitcoin is beyond their scope. They are trying to apply theories from a system that is debt-driven and backed by the government, into a resource that has a limited supply of 21 million. This was addressed in the article as well:

At first glance, it seems obvious to compare Bitcoin to the dollar or the euro. If it claims to be money, shouldn’t we judge it against the currencies we actually use? But that comparison misleads. Dollars and euros are not just money — they are money backed by the full faith of states, by armies, tax systems, and central banks. Their value is secured not only by markets but by law. Bitcoin has no such sovereign foundation.

[Barrykbest]

I share the same sentiment and you were able to put it into words nicely. In my opinion, the value of something depends on what you believe its worth truly is.

It's not strange that these Nobel Laureates speak shit about Bitcoin. They are suffering from intellectual ignorance. Bitcoin has defied most economic laws they are aware of, so they are just confused. Don't forget that some well-known economists have predicted the death of Bitcoin several times, and some of them have even died before Bitcoin. If you compare the effort and resources it takes to mine Bitcoin and what it takes to print fiat money, then you would know that they are biased.

They are not just suffering from intellectual ignorance they are suffering from stiffness and failure to realise that things are constantly evolving and advancing.
Many of those guys can't come to terms with there being something they don't understand, when Bitcoin is beyond their scope of experience or knowledge they always say bad things about it but slowly they have not choice but to come to terms with it.

To me I think It’s fair for Nobel winners to question Bitcoin, that’s their job. Dismissing them as old or ignorant misses the point. The better way is to debate their claims with data. Bitcoin isn’t backed by a state, but it is secured by math, energy and a global network. Whether that makes it a bubble or a new form of money is exactly the discussion worth having.

[davis196]

There's no point paying attention to what the mainstream economists keep saying about Bitcoin/crypto.
They are all fiat money supporters, and they will keep repeating the same old "Bitcoin has no real value" and "Bitcoin is too volatile" type of BS.
There's no point trying to argue with them and showing them valid points. Life has proven that you can't convince an economist that you are right with rational arguments and logic(despite the fact that economists are supposed to be logical and rational). There are left wing economists and right wing economists. I've never seen a left wing economist being convinced by the right wing economists about the importance of fiscal responsibility and maintaining a free market. At the end of day, they all have their opinions and they will defend their opinions until the end.

[TypoTonic]

There's no point paying attention to what the mainstream economists keep saying about Bitcoin/crypto.
They are all fiat money supporters, and they will keep repeating the same old "Bitcoin has no real value" and "Bitcoin is too volatile" type of BS.
There's no point trying to argue with them and showing them valid points. Life has proven that you can't convince an economist that you are right with rational arguments and logic(despite the fact that economists are supposed to be logical and rational). There are left wing economists and right wing economists. I've never seen a left wing economist being convinced by the right wing economists about the importance of fiscal responsibility and maintaining a free market. At the end of day, they all have their opinions and they will defend their opinions until the end.

It's true that you can't convince them, but that was never the goal. You might not be able to change their minds, but laying down counterarguments against their claims could bring a positive perception of Bitcoin to other people. Growth and learning comes from engaging with criticism, not avoiding it.

[cryptomaniac_xxx]

I share the same sentiment and you were able to put it into words nicely. In my opinion, the value of something depends on what you believe its worth truly is.

It's not strange that these Nobel Laureates speak shit about Bitcoin. They are suffering from intellectual ignorance. Bitcoin has defied most economic laws they are aware of, so they are just confused. Don't forget that some well-known economists have predicted the death of Bitcoin several times, and some of them have even died before Bitcoin. If you compare the effort and resources it takes to mine Bitcoin and what it takes to print fiat money, then you would know that they are biased.

Yes, it's because it's goes against the very basic of economics,

1. how can someone produce money out of thin air?
2. how it is traded in the first place?
3. how can it be money in the first place?

So on and so forth. So they're didn't know what Bitcoin is, or blatantly refuse to look at it as again, what they have learn is textbook. But what Bitcoin is offers something very different that it really shook the foundations of finance world.