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 some value an object has independently of being money. So its intrinsic value results from its useful properties as a commodity (rather than as money). Nevertheless, Bitcoin is useful only as money. Then, apparently Max Keiser’s argument would be wrong. For not being useful as a commodity, Bitcoin has no intrinsic value.
Bitcoin Versus Aristotelian Intrinsic Value: A Match
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However, there’s a scenario in which all money becomes a commodity. That problem is its exchange for an alternative form of extra cash. Whenever bought or even 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 will only play the active role — as the buying object — in virtually any transaction, and never its passive role — as the bought or even sold object. It should be a mere possibility to enjoy this last role. Then, because cash always belongs either in a genuine or just possible transaction, we should call it when actual or active, transacting money, and 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. Nevertheless, as only possible, transacted money, it does have an intrinsic value. This is because, if bought or even sold, Bitcoin’s intrinsic monetary properties become its commodity properties.
Therefore, if Bitcoin became the only 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 could be real money. Bitcoin’s intrinsic value is dependent on its being capable to compete with other currencies (as a transacted, bought or even sold commodity).
Privacy as Bitcoin’s Intrinsic Value
Still, privacy does not itself constitute an intrinsic value of Bitcoin:
There’s a big difference between public-key privacy and transaction privacy.
There’s a distinction between exchange value depending on and being itself whichever utilities or perhaps properties.
The privacy of Bitcoin transactions depends on Bitcoin’s public key privacy, what is one of its properties. Likewise, 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 sold commodity (for example, in Bitcoin exchanges). Intrinsic value is the exchange value of utilities resulting from intrinsic properties.
Finally, Bitcoin has other properties than public key privacy, like its security and ubiquity — both unknown to Aristotle. Those properties also make Bitcoin useful, despite in different ways. It is because of all such utilities — instead of simply due to 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 different monetary theory presented in my book Representational Monetary Identity.