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 any value an object has independently of being money. So its intrinsic value results from its useful properties as a commodity (rather than as money). Nonetheless, 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
However, there’s a situation in which all money becomes a commodity. That issue is its exchange for another form of income. Whenever bought or sold, money becomes a commodity.
Transacting Versus Transacted Money
For us to buy or even 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 perhaps sold object. It should be a simple possibility to play this last role. Then, because cash always belongs either in a genuine or even just possible transaction, we must call it when active or actual, transacting money, when passive or possible merely, transacted money.
As thus, whenever transacted, money becomes a commodity.
So as actual, transacting money, Bitcoin has no intrinsic value. Nevertheless, as merely possible, transacted money, it does have an intrinsic value. This is because, if bought or sold, Bitcoin’s intrinsic monetary properties become its commodity properties.
As a result, if Bitcoin became the sole 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 might be a commodity. It only are actual money. Bitcoin’s intrinsic value depends on its being capable 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 is a difference between public-key privacy and transaction privacy.
There’s a distinction between exchange value based on and being itself whichever utilities or 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, what 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 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 ubiquity and security — both unknown to Aristotle. Those properties also make Bitcoin useful, despite in other ways. online cryptocurrency mining hardware to all such utilities — rather than merely because of transaction privacy — that we can give Bitcoin its monetary value.
Bitcoin’s Intrinsic Value
So Bitcoin may be a commodity but only when transacted. Only then, its (merely possible) monetary value becomes its intrinsic worth.
Here is Max Keiser’s article: Is Bitcoin Money?
The ideas on this article belong to a new monetary theory presented in my book Representational Monetary Identity.