Invoking Aristotle, Max Keiser published an article arguing that Bitcoin has an intrinsic value in its privacy. According to that article, Bitcoin versus Aristotelian intrinsic value is a match.
Bitcoin Versus Aristotelian Intrinsic Value: A Mismatch
In Aristotle’s work, intrinsic value specifies some value an object has independently of being money. So its intrinsic value results from its useful properties as a commodity (rather than as money). However, Bitcoin is useful only as money. Then, apparently Max Keiser’s argument will be wrong. For not being helpful as a commodity, Bitcoin has no intrinsic value.
Bitcoin Versus Aristotelian Intrinsic Value: A Match
But, there’s a scenario in which all money becomes a commodity. That problem is the exchange of its for an alternative kind of money. Whenever bought or sold, money becomes a commodity.
Transacting Versus Transacted Money
For us to buy or sell a monetary object, that object must remain its mere possibility of being money: actual money is only able to play the active role — as the buying object — in virtually any transaction, and never its passive role — as the bought or even sold object. It should be a mere possibility to play this last role. Then, because cash always belongs either in a real or perhaps just possible transaction, we have to call it when active or actual, transacting money, when passive or possible merely, transacted money.
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As thus, whenever transacted, money becomes a commodity.
So as actual, transacting money, Bitcoin has no intrinsic value. However, as merely possible, transacted money, it does have an intrinsic value. This’s because, whenever bought or perhaps sold, Bitcoin’s intrinsic monetary properties become its commodity properties.
As a result, if Bitcoin became the only real currency of the world, its intrinsic value would vanish. With no other currency to buy it and for which to promote itself, Bitcoin no longer could be a commodity. It only could be real money. Bitcoin’s intrinsic value depends on its being able to participate with other currencies (as a transacted, bought or perhaps sold commodity).
Privacy as Bitcoin’s Intrinsic Value
Still, privacy does not itself constitute an intrinsic value of Bitcoin:
There’s a difference between transaction privacy and public-key privacy.
There’s a distinction between exchange value depending on and being itself whichever utilities or perhaps properties.
The privacy of Bitcoin transactions depends on Bitcoin’s public-key privacy, which is one of its properties. Moreover, its intrinsic value possibly depends on its allowing transaction privacy, that is one of its utilities. Public-key privacy, by making transaction privacy possible, allows us to give Bitcoin its intrinsic value as a bought or even sold commodity (for example, in Bitcoin exchanges). Intrinsic value may be the exchange value of utilities resulting from intrinsic properties.
Finally, Bitcoin has other properties than public key privacy, like its security and ubiquity — both unknown to Aristotle. Those properties also make Bitcoin useful, despite in various ways. It’s due to all such utilities — as opposed to merely due to transaction privacy — that we can give Bitcoin its monetary value.
Bitcoin’s Intrinsic Value
So Bitcoin is possibly a commodity but only when transacted. Only then, its (merely possible) monetary value becomes its intrinsic value.
Here’s Max Keiser’s article: Is Bitcoin Money?
The tips on this article belong to a new monetary theory presented in my book Representational Monetary Identity.