Genesis Mining CEO: Bitcoin has certain value

This is the ninth in a series of guest posts by Marco Streng, CEO and co-founder of Genesis Mining.

Many people believe that Bitcoin has no intrinsic value. To understand this issue, we must understand how to define value.

In monetary terms, value must meet the following criteria :

Means of circulation

Storage method

Value Scale

Divisibility

Durability

Substitutability

Verifiability

This article is not intended to discuss monetary theory and value concepts, which are the areas of study for scholars, economists or philosophers.

However, we have to ask another question, what is the intrinsic or other value of gold? What is the value of diamonds? What is the value of Picasso's paintings?

Gold is just an element found in nature. Diamonds are just crushed coal. Picassos are just cheap ink smeared on cheap canvas. None of these things have any intrinsic value. Value is created by a consensus that makes one thing (gold, diamonds, Picassos) exchangeable for something else. That is the essence of a trade: I have a Picasso, but I would rather have your diamonds, we can exchange; if I would rather have my Picassos than your diamonds, we will not exchange; if you choose your diamonds over my Picassos, we will not exchange either.

All commerce is nothing more than a series of exchanges. Money is simply a medium that allows people to exchange one good or service for another in an efficient way. In the modern economy, money facilitates basic exchanges such as Picassos for diamonds, but not directly, but indirectly through the use of money. I exchange diamonds for money, and I exchange money for Picassos.

Look at it another way, I pay wages with labor, and I exchange wages for food. If you think about it, the real transaction is labor for food. Money has no value, it is just a medium of exchange, a way for me to store value and then exchange it for other things.

In this sense, Bitcoin has value and is a medium of exchange, no different from U.S. dollar bills.

If people continue to accept Bitcoin as a medium of exchange and can use Bitcoin to exchange labor for bread, then Bitcoin will continue to have value.