I have written extensively on all the ways that bitcoin does not have the value that people think it does, but I recently discovered a perspective where I think a bitcoin could have actual, fundamental value…
Consider this perspective:
Each bitcoin is a 1/21,000,000th share in an NFT minted by Satoshi.
How is the bitcoin block chain itself an NFT?
- The bitcoin block chain has provenance back to Satoshi by definition – Satoshi is the person who created the genesis block, whoever that person might happen to be.
- The bitcoin block chain is a singleton by definition – the chain with most work built on top of the genesis block is The Chain, which ever chain that happens to be at any given moment.
These two attributes effectively make the bitcoin block chain itself into an NFT.
But then where does the value come from?
If NFTs can have value, then the bitcoin block chain, as an NFT, can also have value for all the same reasons. If the chain has value, the we can define each bitcoin as being a fractional ownership share of that value.
But do NFT’s have value?
This is a VERY hard question! I do not know the answer, but it is at least possible, in a fundamental and coherent way, that they could have value. So, if NFTs can potentially have value then at least this is a way that bitcoin can potentially have value by way of being itself an NFT. I do not think any of the currently popular other theories of bitcoin value have any path where they could at least even potentially be valid (much less correct).
How could NFT’s potentially have value?
It does seem at least possible (to me at least) that there can be real, fundamental value to singleton-ness. I can also think of (albeit contrived) examples of distributed systems where having a guaranteed universal (as in, there is absolutely provably only one in the universe) singleton could ensure proper operation even in the face of unreliable (and even speed-of-light-bound) communications channels, but this is getting us off subject. At very least it seems possible for something to have value by virtue of being verifiably unique, so it is at least possible that NFTs could have value since they have this property. I believe this is much stronger than any of the other value claims that can be made for bitcoin.
(This is a VERY interesting topic for me that I want to tighten my thinking on, so please do share any criticisms and insights in the comments! Do you know of any examples where singletons absolutely do have fundamental value? Or do you know an argument for why this can not be true?)
Ah ha! So you changed your mind and now admit that bitcoin has fundamental value!
I still strongly believe that no one has ever bought bitcoin for valid fundamental value reasons, and the (even recently greatly diminished) price of bitcoin only reflects misunderstanding and speculation on a massive scale. I still stand ready to bet against anyone who makes claims about the future price of bitcoin over the long term (although there are not as many of these people today as there were when bitcoin was above $60K!). I think this new NFT perspective is interesting (to me at least) because it is the only possible path I have ever been able to think of where bitcoin could even possibly have any valid value claim, no matter how weak.
But bitcoin’s value comes from limited supply/cryptographically secure/easy to transfer/distributed nature/etc…
Yes, I also know the bitcoin pitch sheet and I have written elsewhere about why each of these claims ultimately ends up being invalid, or false, or both. You can not make a valid claim with a preponderance of invalid claims.
If you really understand how bitcoin works (not you read a bunch of websites that make seductive but sloppy claims about what they think bitcoin is rather than what it actually is) and you want to thoughtfully debate this, then pick whatever you think is the strongest of all the value claims and send me your best opening statement (maybe a sentence or two) in the comments below and we can try to find out which one of us is wrong.
Also, if you really understand economics and/or markets and/or political economy and think that bitcoin has value but you do not know enough about the actual technology and system dynamics, then we can also talk. Too many smart people build grand towers of bitcoin theories and ideas on top of non-existent foundations.