- Bitcoin has intrinsic value
- Bitcoin is just another ‘crypto’.
- Bitcoin is useless
- Bitcoin is a threat to the environment
- Bitcoin wallets store Bitcoin
Myth #1: Bitcoin has intrinsic value
One of my favourite catchphrases of Bitcoin critics is “Bitcoin has no intrinsic value!”. After saying this, they will often continue on to blabber some semi-interesting monologue they plagiarised from their favourite online “think-boi” about how the value of Bitcoin is just another instance of hype-fuelled delusional hysteria. The argument goes something like this:
“I cannot hold Bitcoin in my hand, and I have a black-and-white conception of existence which prevents me from acknowledging Bitcoin as “real” in the same way as gold. I also believe that value is purely contained within objects and that, when acknowledging intrinsic value, we are noticing something that was already true about the object before we gazed upon it. Because of these two understandings, I have come to the conclusion that all the value of Bitcoin cannot possibly be contained within it because there is nothing there to contain it. Thus, any and all value of Bitcoin must be contained within the subject (the people), but because I don’t believe “intrinsic” value is a subjective phenomenon, that value must be fallacious, and therefore it can only be a form of mass delusion that will eventually die off, causing the price of Bitcoin to crash alongside it.”
Perhaps this is why they will often sprinkle pseudo-intellectual references to the Tulip mania of 1636; that story supports their pre-formed opinion. Still, you might have noticed that the myth is that “Bitcoin has intrinsic value”, implying that it doesn’t. That wasn’t a typo; although I disagree with the reasoning behind the common “no intrinsic value” critique of Bitcoin, I do agree with the conclusion. The part I disagree with is the false pretence upon which the argument is made: that so-called “intrinsic value” is attributable to objects in and of themselves, devoid of a subjective observer. Value is an innately relational concept; something can only be valuable in relation to something else. The way in which x is conducive of y is exactly how x is considered valuable. Therefore, value itself can’t exist solely in either the subject or the object since it would disappear if either were to leave the equation. Since it requires both, it follows that value exists as a property that emerges from the relationship between subjects and objects. So no, Bitcoin doesn’t have “intrinsic value” in so far as that’s considered to be a self-contained phenomenon, but neither does anything else, so the claim is pointless.
Myth #2: Bitcoin is just another ‘crypto’
Suppose you have a paper cut on your hand, so you use a plaster to fix it, and it does a great job. Everyone in your village notices how well your plaster solution worked to solve your papercut problem, so they begin using plasters to fix bikes, cups, walls and just about every other thing that plasters weren’t designed to fix. All these items start breaking down and stop functioning as expected, and everyone blames the plasters. At this point, it doesn’t even matter if plasters are good at fixing papercuts; plasters have had so much bad press around town for their failures in other areas that nobody even thinks to use them when they’re actually needed. This is just like the relationship between Bitcoin and crypto. Bitcoin fixes a huge problem immensely well, and people were very impressed, so they began trying to use blockchain to fix a whole host of problems they either invented or didn’t call for the application of blockchain in the first place. Bitcoin is not just ‘another crypto’, for the same reason not all uses of plasters are equally as effective; Bitcoin is a real solution, but crypto is just a problem in and of itself.
Myth #3: Bitcoin is useless
“What can I do with Bitcoin that I can’t do with the dollar?”. Hmm… I don’t know, Jeremy, maybe own it? All jokes aside, this is a really common critique of Bitcoin, which is annoying because it makes the least sense but somehow takes the longest to disprove. It takes so long because you have to explain both Bitcoin and its alternative: legacy finance. Only from an understanding of both can Bitcoin’s utility become clear. So rather than writing a 20,000-word article about the use of Bitcoin, here are some bullet points:
- True ownership
- Independently verifiable
- Peer-to-peer
- Decentralised
- Global remittance
- Banking the unbanked
- Incorruptible
- Transparent
- Open-source/Inclusive
- Pseudonymous
- Sovereign
Myth #4: Bitcoin is a threat to the environment
I recently produced an entire article explaining why this critique doesn’t actually make sense. Rather than sounding like a broken article, I’ll just link it here. A quick summary of the main points:
- Always-on-devices (such as Amazon Alexa’s, etc.) use 13X the energy of Bitcoin
- The energy they use comes from much dirtier energy production methods
- Bitcoin incentivises investment in clean energy production infrastructure
Myth #5: Bitcoin wallets store Bitcoin
In my article, “Where is all the Bitcoin?”, I talked about the location of Bitcoin, which wasn’t inside Bitcoin wallets. But if Bitcoin wallets don’t store Bitcoin, then what exactly do they store? They store keys. These digital keys are tied to Bitcoin addresses, and if you have a key, then you can sign any transaction that sends Bitcoin from its respective address. The actual Bitcoin exists everywhere and nowhere, on all copies of the blockchain simultaneously, yet in no copy of the blockchain in particular. If you’re confused, I’m not surprised, just check out my article about the location of Bitcoin and hopefully, it should provide some more clarity.
