What is the Intrinsic Value of Bitcoin?
What's the intrinsic value of Bitcoin? What's this useful for, and how does it compare to gold? In this short video, from the heart of the Wynwood district in Miami ...
Hello party people. It's Chris DeRose here in the Miami design district. Today I want to explain what is the intrinsic value of bitcoin. Does it have intrinsic value? What does it look like? And, in fact, it does. So, let's begin. Bitcoin has been criticized for being perhaps specious in its value.
It doesn't have any wage, or there's no "there" there, or some such thing because it's not useful for making jewelry, perhaps which I guess is perhaps what gives gold its value: I don't know. But in the case of bitcoin, it has a lot of value. Most of the pundits that say otherwise just don't understand the technology. This is really important the Counterparty project because the Counterparty project itself is built with bitcoin. It uses bit coin and the bitcoin intrinsic value to deliver on all the functionality that it provides. There are a number of ways to look at bit coin, and at it's simplest it could be said that bitcoin functions as a persistence mechanism, as a way of storing data in very much the way that perhaps My SQL stores data, or perhaps the FAT32 file stores data.
But there's a big, big difference that is unique to bitcoin, and that is that the data that's stored on bitcoin can't be changed, or if it can be changed it requires an inordinate amount of energy. So, when you own bitcoin, when you hold bitcoin, you hold credits on this persistence mechanism that will stand the test of time to the degree which no protocol has ever stood the test of time prior. The miners who are burning energy are quite literally burning energy for the purpose of insuring that that data stays there. Cryptographically, what you persist onto a blockchain is hardened onto the blockchain. It is hardened there by the miners who attach blocks not only together but compact that blockchain with more and more blocks, solidifying the data that you've stored. This works really well in a lot of contexts that themselves mirror the value of gold.
It could be said that what gives currency its value - or at least at times what has given currency its value - is the ability of gold to back it the scarce resource that can't be perturbed by the government in any way. We know what the supply of gold is. Well, bitcoin is very similar in the way that it protects your data and it protects Counterparty data. Bitcoin is itself unalterable. No strike at the gavel is going to change that persistence. It's not going to change the truth that's been declared by miners.
It's important to frame the blockchain in historic terms: It's very important technology. When you look at the innovation that was brought about by the Gutenberg Press, by the internet itself, these were things that were enabling the flow of information and the flow of security and information to citizens of the world despite the efforts of governments to change those perceptions, and change that message. And the blockchain does that in a lot of ways as well. it does that for financial data, it does that for financial data in a way that has never been done prior. We've had the ability with the internet and the Gutenberg Press to manage non-scarce information, to distribute literature to many people that can be copied and shared. Well, the blockchain is a very similar model except that it deals with scarce information that itself can not be duplicated.
It is certainly not counterfeit-able. I think that that all attests to the rubric of intrinsic value, how it applies to bitcoin. One other way too that I think it's important that you frame bitcoin's innovations is that there is, at some level, a function of identity. This information that is stored is tied to a specific person or a specific thing, or a specific computer. It's not identity in the sense that we know John Smith's name, but it is identity in that it is tied to a private key and empowering individuals to have things like user-defined assets and wealth and all of these things to themselves, but at the same time remaining pseudo-anonymous, I think that that also is a primary intrinsic value function of the bitcoin, which you have not seen prior in any other technology that has come to us before. It has always been through centralized institutions and through centralized sources of power.
So, these are all some of the themes of intrinsic value as it relates to bitcoin and as it relates to Counterparty. It's one of the biggest components of what makes Counterparty useful and what makes Counterparty different. So, I think that's an overview that perhaps will give you something to think about. I hope you found that entertaining. I'm here again in Miami enjoying a wonderful day. I want to share some of that with you with these backdrops.
We're here at the Wynwood Walls. There's plenty of walls like this. You'll see me here today doing videos like these for you. So, if you have some questions, if you like the area, if you have some requests maybe for where want to shoot a video, why don't you ask me? I'm Chris at Chris DeRose.com at Twitter @DeRoseTech, and if you like this video, subscribe to the channel and watch some more videos. See what we come up with and see what you think about it.