Value is an elusive category. Even with Bitcoin, we always wonder what its true value is. We try to make sense of its value in different ways. One of the more obvious is the value of the energy used to mine Bitcoins. The security of the Bitcoin nodes network also certainly has a high impact on value of Bitcoin. Also the liquidity of markets and the movement of Bitcoin price determines our perception of its value. Its scarcity and limited supply to only 21 million Bitcoins also contributes to greater valuation.
The value of a thing can be a reflection of a personal attitude towards something. Value can arise from personal evaluation or it can arises because several subjects set some value to a commodity or an idea. This valuation can be also encouraged by mutual interaction or competition. Intrinsic value is thus, in a way, nonsense, because the value of things and ideas is always an obvious and clearly recognizable property. Value is not within something. For a value to manifest, it must be clearly recognizable as soon as something is in the center of observation and attention.
Bitcoin as a open, decentralized, borderless, neutral and censorship resistant asset is a good store of value and its lately often compared with gold as traditional store of value. They call it Gold 2.0 because of some even better properties as gold has. However, as a store of value, Bitcoin is only in the first stage towards a truly recognizable commodity of a great value which can be used as a medium of exchange.
To recognize its true potential, we need, in my opinion, to change our view of economics as a way of communicating value as a whole. Because Bitcoin total supply is limited by protocol we have to completely change our sense of price as a measure of value. As I wrote in a blog about deflationary economies, we need to understand that due to the increase in the amount of certain goods in the economy, the prices of these goods can also fall drastically. We need to understand that falling prices due to rising quantities of goods are a self-regulatory process that leads to a more sustainable economy that will ultimately be crucial to protecting our environment and planet earth as our common home for which we have no compensation. We do not have planet B available.
When I listen to the debates about capitalism and profit-driven economics, it seems to me that measuring profits in dollars or any other fiat currency actually looks pathetic. It is pointless to measure profit with a shrinking meter which at some point will be infinitesimal short, so to speak, equal to zero. It is much better to use a meter that maintains its length or even increases it and adds to the profit a value related to the time dimension. This sounds almost like Interest 2.0. So if we realize in our minds that a deflationary store of value automatically allows for the natural determination of the value of profits and every smart investor reinvests profits in the economy, then such an economy will be successful and sustainable.
Assuming that in such an economic environment, Bitcoin begins to take on the role of a medium of exchange, everyone who participates in this economy gains the opportunity to act wisely when investing. In a successful deflationary economy in which the volume of goods and services increases, prices fall. To invest, people can thus choose the most favorable moment to place their profits back into the economy. Such an economy promotes saving instead of borrowing. The production of goods is also carried out thoughtfully and in accordance with the real needs of a society that can peacefully improve its organization and laws aimed at a sustainable balance on the planet.
If the Bitcoin route will lead in this direction, it will naturally become a unit of account. This will round out all three properties of Bitcoin as solid hard money, which will fairly and accurately reflect the equivalent of goods and services in our global economy. The need for national currencies will slowly die out and all the people of this world will be united in a just and prosperous society.
I think this is the true value of Bitcoin, and all of us who want its success, as has already happened with open source technology and the Internet, must actively strive for it.
So folks, stack satoshies and secure your future !!!
