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There is no shared opinion on whether bitcoins have intrinsic value or not. Some conservative-minded people believe that intrinsic value may only be possessed by seizable assets, although this obviously disregards such inseparable attributes of today’s realities as software or internet. Others assume that intrinsic value is the feature of such commodities as gold or silver because what matters is the way they are perceived and the history they have.
The classic example, however, proves that a starving person would definitely attach more intrinsic value to a loaf of bread than to a piece of gold, regardless of its centuries-long status. In such a way, none of these opinions seems to be comprehensive enough. One of the ideas this implies is that we are asking the wrong question. The matter is not simply whether bitcoins have intrinsic value, but what exactly intrinsic value actually is. Only after this question is answered (considering the fact that not only expensive physical objects possess intrinsic value), the bitcoin dilemma may be solved.
Of course, there is no sense to attempt to give a definition to such abstract concept as value. It seems to be the domain of philosophy, after all. Still, the example provided above proves that everything has value in a certain context, which is perfectly explained here. In other words, a thing (a technology, service, product or anything else) has value as long as it yields benefit. Computer games may be a good example. In many of them, players earn some sort of money, which is necessary for further advances in the game. Needless to say, such money cannot be withdrawn. Online trading is another example. To say that bitcoins have no intrinsic value before they are cashed out would mean that money earned on Forex or high frequency trades have no intrinsic value before withdrawal as well, which is definitely untrue.
A wise observation one expert has made is that the currency in a game someone doesn’t play or in a trading platform he or she doesn’t use is of much less value to this someone than to those who do play the game or do use the platform. Coming back to bitcoins, it is possible to make a conclusion that their intrinsic value is proportional to the size of the network of people who use them. As long as this network grows, the value of bitcoins grows as well.
In such a way, bitcoins do have intrinsic value – it is granted by the context within which they exist. It is highly likely that bitcoins will one day take the position of a digital, supranational currency the demand for which is continuously growing. Such currency would never replace fiat currency, of course, though it may happen they will obtain equal status one day.
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