Bitcoin: Peter Schiff gets it wrong

In this piece, Mr. Schiff makes the case that Bitcoin serves as well as, if not better than, gold as a medium of exchange.  However, he declares that these benefits are all overweighed by a single factor:  the intrinsic value of gold.  According to Mr. Schiff, it is this intrinsic value which has made gold a store of wealth, and why it will always beat all comers like Bitcoin.

What a crock.  Nothing has intrinsic value.  Value means a cognitive mind chooses to prefer X over Y.  Value is fundamentally conceptual, built as it is of the subjunctive…the ability to conceptualize alternatives, at least one of which is (or proves to be) counterfactual.  Without that, there’s no choice.

Water is a necessity of human life, but it carries no value until we conceptualize the absence of water.  Only then can we say that we “value it.”  This was a fundamental error of Rand’s, upon which she supposedly built the entire Objectivist Ethics—that non-thinking, non-choosing organisms have values…in her definition, “that which they act to gain or keep.”  But you see, they’re not really “acting in order to gain or keep;” they’re just acting, period.  There’s no choice in the matter, nor purpose.  She tried to fix this error with a famous footnote, but the fix fails when closely considered.  If a lower animal needs water, then it’ll drink and that’s all there is to it.  It can’t turn away from it; there would be no basis for turning away.  Only a human could (foolishly) turn away from it, because the human can conceptualize the alternative–having water or not having water–and choose from among those.  Absent abstraction, this simply can’t be done.

While Mr. Schiff may be correct that gold carried value even before it was a medium of exchange, that’s hardly relevant.  It gained its value as such as a medium of exchange.  Hence there is no reason whatsoever that Bitcoin couldn’t likewise gain a similar value.  There’s no necessity of “having another purpose.”  If anything, any other purpose is distracting from the focal purpose of being a medium of exchange.  IOW any medium of exchange will have more value as such, if it has no other purpose.

If people decide they want Bitcoin as a medium of exchange, voila…that’s all the value it needs to be a medium of exchange.  Now naturally, they could decide they don’t, and then it’s as worthless as Mr. Schiff implies it will become.  But of course, that holds true for gold too, or anything else that serves as a medium of exchange.  While there’s plenty to be said for gold’s longevity as such, there’s also plenty to be said for the inherent perfection of a pure medium of exchange like Bitcoin.  Indeed, a case can be made that over enough time, and assuming the species manages to survive the current madness, it’s a virtual certainty that something like Bitcoin will indeed serve as a long-lasting, never-usurped medium of exchange.

Now that’s “something like Bitcoin,” not necessarily Bitcoin itself.  OTOH I don’t know what could be more like Bitcoin, than Bitcoin.  Currently, I’m sure nothing is.

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