Listen to various Bitcoin critics for long enough and you’ll inevitably hear the argument that Bitcoin can’t possibly succeed because it doesn’t have any intrinsic value.
Gold bugs love to point out that unlike bitcoin, gold is used in all sorts of industries such as electronics, jewelry and dentistry.
Do these assets still have value? The answer has to be no, because value only makes sense in the context of human existence.
If it were true that gold has such a thing as intrinsic, objective value then the gold bar would necessarily retain value to the man.
However, when we once again remove the evaluator from the equation, the idea of oxygen having value loses its appeal.
However, what it does suggest is the simple fact that while man has been endowed with the ability to choose his values, he cannot escape the consequences of these values.
Therefore it is nonsensical to talk about value as being either subjective or objective.
Bringing the conversation back to the realm of economics, we can say: If man values wealth preservation, then he must save his wealth in money that cannot be inflated or debased.
To determine if Bitcoin is capable of achieving and surpassing the level of success found by gold over thousands of years, we must analyze Bitcoin’s intrinsic properties.
Bitcoin is decentralized, meaning it has no single points of failure.
In order for anything about the Bitcoin protocol to change, the change must first take place in the hearts and minds of the users of Bitcoin.
Bitcoin is open to anyone and cannot discriminate.
One of the most overlooked but groundbreaking features of Bitcoin is its ability to perfectly and trustlessly synchronize itself across time and space.
Perhaps the most well-known property of Bitcoin is its hard cap of 21 million coins.
Monetary sovereignty is the ability for the individual to make free choices regarding the use of wealth without the threat of censorship or discrimination.
The Federal Reserve and most other central banks have explicit mandates to debase the value of their currencies through what are known as inflation targets.
Our current system of fiat money relies completely on payment rails that travel through governments and banks, meaning transactions can be denied or censored for any reason.
However, what they fail to mention is that it was the failure of the gold standard in the first place that brought about our current fiat system.
Because of the luxury enjoyed by Americans and citizens of many developed countries, the benefits brought about by Bitcoin may not be as obvious as they are for many people in developing nations.
Thousands of years ago people gradually found themselves using gold to store and transact value.
In the same way, Bitcoin does not need to be forced upon anyone in order for it to succeed.