Bitcoin Versus Aristotelian Intrinsic Value
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). But, 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
Nevertheless, there’s a circumstance in which all money becomes a commodity. That issue is its exchange for a different kind of extra cash. Whenever bought or even 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 any transaction, and never its passive role — as the bought or sold object. It must be a mere possibility to enjoy this last role. Then, because cash always belongs either in a real or perhaps just possible transaction, we need to call it when actual or active, transacting money, when merely possible or passive, transacted money.
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, anytime bought or 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 sell itself, Bitcoin no longer can be a commodity. It simply could be actual money. Bitcoin’s intrinsic value is dependent on its being capable to compete with other currencies (as a transacted, bought or sold commodity).
Privacy as Bitcoin’s Intrinsic Value
Still, privacy does not itself constitute an intrinsic value of Bitcoin:
There is a difference between transaction privacy and public-key privacy.
There is a distinction between exchange value depending on and being itself whichever utilities or properties.
The privacy of Bitcoin transactions depends on Bitcoin’s public key privacy, that is one of its properties. Furthermore, its intrinsic value possibly depends on its allowing transaction privacy, which 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 is the exchange value of utilities resulting from intrinsic properties.
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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 different ways. It’s due to all such utilities — as opposed to simply because of 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 worth.
Here’s Max Keiser’s article: Is Bitcoin Money?
The ideas on this article belong to a different monetary theory presented in my book Representational Monetary Identity.