Crypto News Bulletin from bitcoinmagazine

Thursday May 30, 2019 8:41 PM
1 month 2 weeks ago

Op Ed: Debunking Bitcoin Myths, The ‘Intrinsic Value’ Fallacy

A series of op eds by Kyle Torpey addressing some of the oft-repeated arguments against Bitcoin.One of the earliest criticisms of Bitcoin was that the underlying token in the system had no intrinsic value. This point was an area of heavy debate among libertarians and Austrian economists who had become interested in bitcoin as a potential digital alternative to gold in the early stages of the crypto asset’s development.Much of the debate revolved around Austrian school economist Ludwig Von Mises’ regression theorem, which claims non-monetary use cases as a prerequisite for any good to become a money.Like many others, I fell on the side of bitcoin lacking any sort of intrinsic value after first learning about the new digital asset, but this was largely due to my lack of understanding around bitcoin’s utility as a digital bearer asset at the time (around 2011 to 2012).Medium of Exchange vs. Store of ValueMy view on bitcoin’s lack of intrinsic value changed once I realized that it was the only option in terms of a permissionless, censorship-resistant digital money.One of the common arguments around the intrinsic value of fiat currencies, such as the U.S. dollar, is that the key underlying value proposition is that you have to pay your taxes with it. Bitcoin has a similar property where it must be used for censorship-resistant transactions online (yes, there are other options but bitcoin is the most liquid).The continued existenc...