Thursday 29 June 2017



Does Bitcoin’s Utility Give it its value?

As the bitcoin exchange market becomes something much more accessible to the public after being a thing that alienated most people, the more people are wondering about the origin of Bitcoin's intimidatingly high valuation that has governments welcoming it into its economies after their populations adopt it; best exemplified by the market of bitcoin exchange in India, where people use their preferred option of the best bitcoin exchange in India to sell Bitcoin in India.

For example, New York Times writer Paul Krugman has said “To become successful, currency has to be both a ways of exchange and a reliably stable store of value. Yet it’s uncertain why Bitcoin should be a reliable store of value,” Krugman writes. “I have had and am continuing to have a dialogue with smart technologists who are very high on Bitcoin – but asked to explain Bitcoin as a reliable store of value, they only answer with ravings about how Bitcoin is a great exchange method. Even if I buy this (which I don’t, entirely), it doesn’t solve my problem.”

Krugman is far from being alone on this, and, actually, many people reckon that it is Bitcoin's utility to be the origin of its intrinsic value. A very sensible conclusion to come to after going down that rabbit hole of pondering, given that many things have an intrinsic value that depends upon its own utility, and that includes the classic backer of the dollar, gold.

There are even writers that take the angle of proclaiming that Bitcoin's one and only intrinsic value lies isolated in its utility. John Kelleher, a freelance web developer has written for Investopedia and said "Bitcoin’s utility as a store of value is dependent on its utility as a medium of exchange. This is based on the premise that in order for an asset to be a valid store of value it must have a perceived quality of intrinsic value, and bitcoin could have no practical utility and therefore no intrinsic value, making it unappealing as a store of value; this is speculating on the assumption that Bitcoin doesn’t manage to be successful as a medium of exchange.

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