There are several different ways to look at this objection. The concept of intrinsic value basically means that an object or thing itself possesses a value that is part of its fundamental makeup.
- On a practical level, nothing has intrinsic value. All value depends on what other people value it for. Value is entirely based on a combination of circumstances and what other people assign to it. How valuable would a gold brick be if you were stranded alone on an island with no drinkable water?
- On a more philosophical level, Bitcoin does have intrinsic value. Its value is in the fact that the network generates a low-friction, high fidelity, extremely divisible ‘token’ that can be exchanged for anything else of value. Not even gold can claim to have these values.
- Similarly, what is the intrinsic value of the United States Dollar? It hasn’t been backed by gold since 1971, so it is entirely backed by “faith and credit”. In one sense, that is exactly what Bitcoin is backed by, but instead of “faith and credit” in the Unites States Government, Bitcoin is backed by faith in mathematics.
- On the “you can’t touch it” front, while you can touch a paper dollar bill, that isn’t actually what a dollar is. A dollar is a liability (debt) generated by a bank somewhere, and the vast majority of them are digital already. So while a dollar bill is a representation of a dollar, holding one is not actually holding a dollar. In that same sense, one could print out a wallet code that holds a bitcoin, and hold (and spend!) that piece of paper.