Why Bitcoin Is Not Money: Blockchain, Speculation and Intrinsic Value

Bitcoin, or rather the blockchain, the technology

under my... underlying the Bitcoin, demonstrated

that a digital token can be transferred between

unknown counterparts without the need for an

intermediary. Now this technology was revolutionary.

It... it... it can have many uses if people

can in a trusted manner exchange assets or goods

without someone else guaranteeing that or authenticating

that. But the bit... while the technology was

certainly revolutionary, but the Bitcoin itself

was just a tool to demonstrate the technology.

It had no value. Either intrinsic, or as a promise

to pay. It was not money. The price of Bitcoin

today does not represent value in the same way

money has value. This value is purely speculative,

like the price of a tulip during the tulip mania

of the 17th century as some of you would be

familiar with. As long as two people are willing

to pay a certain price for a commodity, or for

anything, because as far as I understand Bitcoin

is not even a commodity, for anything, there

will be a price for it. But that does not mean

that there is value to it. To summarize, cryptocurrencies

have no intrinsic value, they are not backed

by any promise to pay, that is they have no

issuer. Since they do not meet the basic attributes

of money, I reach the conclusion that they are

not money. In fact, since they do not have any

underlying cash flows, they are not financial

assets as well.