Here’s something that bugs me: I have never understood the proclamation: Gold has intrinsic value, but Bitcoin does not. It’s time to get to the bottom of this issue.
The Claim
Unlike Bitcoin, Gold has physical uses, like in electronics or jewelry. This gives it intrinsic value.
This claim hinges on one premise: an object that has physical uses has intrinsic value.
The Reasoning
Aristotle pioneered a theory on the properties of good money, which I am a huge fan of. So much so that I developed my own version, but for our purposes we need the ancient Greek philosopher’s: Durability, Portability, Divisibility and Intrinsic Value.
Aristotle believed the material from which money is made should be valuable in and of itself.
From this notion of Intrinsic Value follows that an object with physical uses has intrinsic value, which in turn makes Gold a better money than Bitcoin is.
Vivisection of Value
What makes something valuable?
To understand intrinsic value, consider the process of valuation. This process implies two entities: a subject that assigns value, and an object to which value is assigned. The subject, the valuer, through judgement, assigns value to the object.
What makes something intrinsically valuable?
Interestingly, a unique form of valuation arises when the subject and the object coincide. If the subject values itself, then the subject is valuable in and of itself.
What can be intrinsically valuable?
Only the thing that values itself can be considered intrinsically valuable. Obviously sentient beings fall into this category. What about animals or other living creatures? To me they do seem to value their own lives. Even the most primitive life forms do.
However, arguing that a physical object, like a chair or gold, possesses intrinsic value seems a stretch too far.
A more intriguing question would be if AI have intrinsic value? And if so, in which form?
Devil’s Due
One could point out that even if the claim that Gold holds any intrinsic value fails rigorous philosophical examination, the implication might differ: typically deriving the claim from intrinsic properties, rather than the philosophy of value itself. If the claim is that gold has intrinsic value based on its intrinsic properties, then it’s the practical features of a form of money we’re discussing. In that sense, Bitcoin, with its unique digital attributes, can also claim its own intrinsic value. Thus, both Bitcoin and gold are in competition, each with their unique properties that make them good as money. In this light, the comparison of gold and Bitcoin takes on a more nuanced dimension.
Conclusion
Ultimately, intrinsic value can only be ascribed to entities capable of self-valuation.
