The claim that “Bitcoin has no intrinsic value” is one of the most persistent criticisms leveled against digital currency. While it sounds convincing at first glance, a deeper analysis reveals that this argument is built on semantic confusion, outdated economic assumptions, and a fundamental misunderstanding of what money truly is. In this comprehensive exploration, we’ll dismantle the myth once and for all—using logic, economic theory, and real-world parallels.
What Does “Intrinsic Value” Really Mean?
To begin, let’s clarify the terminology.
- Value: Something a human subjectively appreciates as beneficial.
- Intrinsic: A property inherent to an object, independent of human perception.
- Intrinsic Value: The idea that something holds value regardless of human opinion.
But here lies the contradiction: value is inherently subjective. It exists in the mind of the beholder. Claiming that something has value “regardless of whether humans value it” is logically incoherent.
👉 Discover why Bitcoin’s value isn’t about physics—it’s about consensus and network power.
A Thought Experiment: Does Water Have Intrinsic Value?
Some argue that essentials like water have intrinsic value because they sustain life. But consider this: if every human suddenly decided life wasn’t worth living, would water still be valuable? The answer is no—because value depends on desire, not physical properties.
No object in the universe can possess intrinsic value, because value requires a valuer. This simple truth dismantles the foundation of the “Bitcoin has no intrinsic value” argument.
Beyond Semantics: The Real Concerns Behind the Criticism
When people say Bitcoin lacks intrinsic value, what they often mean is:
- Bitcoin has no utility beyond being money.
- Bitcoin isn’t “backed” by anything tangible.
Let’s address both.
1. Utility: Must Money Have Another Use?
Critics often claim that for something to be real money, it must have industrial or practical uses—like gold in electronics or silver in photography.
But this misunderstands the evolution of money.
Historically, commodities like salt or cattle had utility before becoming money. Their usefulness helped them gain initial adoption. However, once an item becomes widely accepted as money, its monetary premium far exceeds its utility value.
Take gold: priced at ~$2,000 per ounce today, only a fraction—perhaps $50–$100—reflects its industrial use. The rest is monetary value, driven by trust, scarcity, and network adoption.
If gold lost all its monetary status overnight, its price would collapse—not because its usefulness vanished, but because its role as a store of value disappeared.
So, does utility “back” money? No. And here’s the key insight:
A good money doesn’t need utility—it needs superior monetary properties.
Bitcoin was designed from day one to be pure money—nothing more, nothing less. It doesn’t need to conduct electricity or make jewelry. Just like a television doesn’t need to cool the room.
2. Is Bitcoin “Backed” by Anything?
Another common objection: “Bitcoin isn’t backed by anything.”
But neither is any form of modern money.
Let’s clarify:
- Currency is backed by money (e.g., paper dollars were once backed by gold).
- Money is not backed by anything—it’s valued because others accept it.
When the U.S. dollar broke from gold in 1971 (the “Nixon Shock”), it stopped being a currency and became unbacked money. Today, its value rests solely on collective belief and network effects—not military power, taxes, or oil.
Bitcoin works the same way—but without coercion. Its value emerges organically from a global network of users who recognize its advantages:
- Scarcity (capped at 21 million)
- Immutability
- Censorship resistance
- Borderless transfer
👉 See how Bitcoin’s decentralized network creates trust without institutions.
Academic Myths: Debunking the Regression Theorem & Aristotle
Some critics invoke academic theories to challenge Bitcoin’s legitimacy. Let’s examine two: Mises’ Regression Theorem and Aristotle’s properties of money.
Mises’ Regression Theorem: Does Bitcoin Qualify?
Ludwig von Mises argued that money must originate from a commodity with prior use value—breaking the circular logic of “money is valuable because it’s valuable.”
Bitcoin satisfies this through Bitcoin Pizza Day (May 22, 2010), when 10,000 BTC bought two pizzas. That moment linked Bitcoin’s value to a real-world good—pizza—whose value was already priced in USD.
From there, Bitcoin’s price regressed back through time via market trading—all the way to gold-backed dollars. The chain is complete.
Even before 2010, early miners invested electricity (a priced commodity) to secure the network—another form of value anchoring.
Conclusion: Bitcoin meets the Regression Theorem through market history, not metaphysical claims.
Aristotle’s Five Properties of Good Money
Aristotle listed five traits of ideal money:
- Durable ✅
- Portable ✅
- Divisible ✅
- Fungible ✅
- Intrinsically Valuable ❌ (apparently)
Wait—does Bitcoin fail on the fifth?
Only if you interpret “intrinsic value” literally. But Aristotle lived in 350 BCE—long before digital networks, cryptography, or global communication. He couldn’t envision a world where trustless digital scarcity could become valuable.
Today, we know digital assets can hold immense value—just look at software, domain names, or NFTs.
Moreover, the U.S. dollar also lacks intrinsic value—yet functions as global reserve currency. If fiat can succeed without commodity backing, why not Bitcoin?
What Makes Good Money in the 21st Century?
Money isn’t static. The best form evolves with technology and society.
Modern Technical Properties of Money
Bitcoin excels in nearly every category:
- Digital & borderless: Instant global transfers
- Censorship-resistant: No gatekeepers
- Unconfiscatable: With proper key management
- Open-source: Transparent and permissionless
- Hard to inflate: Algorithmically scarce
- Secure & portable: Stored on a USB drive or memorized
No physical commodity matches this combination.
Social Properties That Matter
- Network size: Growing rapidly (second only to gold in value held)
- Decentralized issuance: No pre-mine or central control
- Fair distribution: Early adopters took real risk
- Metcalfe’s Law: Value grows with user adoption
Bitcoin isn’t just technically superior—it’s socially resilient.
Why Gold Failed (And Why Fiat Isn’t Better)
Gold was once ideal—but its physical limitations led to centralization:
- Hard to transport → stored in banks
- Banks issued paper receipts → fractional reserve lending
- Governments seized gold (1933 Executive Order 6102)
- Nixon ended gold convertibility in 1971
Fiat replaced gold—but introduced new flaws:
- Infinite supply
- Erosion of purchasing power
- Central control
- Financial exclusion
Bitcoin fixes both: it’s digital gold with better properties and fiat without the inflation.
FAQ: Addressing Common Doubts
Q: If Bitcoin isn’t backed by anything, why does it have value?
A: Because millions believe it’s a reliable store of value and medium of exchange—just like all modern money.
Q: Can’t governments ban Bitcoin?
A: They can try, but banning a decentralized protocol is like banning mathematics. Adoption continues regardless.
Q: Isn’t Bitcoin just speculation?
A: Early-stage assets always see volatility. But speculation often precedes real utility—just like the internet in the 1990s.
Q: What if Bitcoin fails?
A: Then its value drops to zero. But its design—censorship resistance, fixed supply, open access—makes failure less likely than for centralized systems.
Q: Doesn’t mining waste energy?
A: Bitcoin uses energy to secure its network—a trade-off for trustless consensus. Much of the energy comes from stranded or renewable sources.
Q: How is Bitcoin different from other cryptocurrencies?
A: It has the largest network effect, longest track record, and strongest security model. First-mover advantage matters in money.
👉 Explore how Bitcoin’s energy use compares to traditional finance—and why it matters.
Final Thoughts: Money Is a Language
Think of money as a language of value—like English is a language of meaning.
No one asks if English is “backed” by wood (paper) or silicon (screens). Its value comes from widespread use and shared understanding.
Bitcoin is the first native digital language of value—secure, borderless, and open to all.
It doesn’t need intrinsic value.
It doesn’t need utility beyond money.
It just needs people to use it.
And every day, more do.
The future of money isn’t physical.
It’s cryptographic.
It’s decentralized.
It’s Bitcoin.