The Utility of Bitcoin
I speak to many business owners about how bitcoin could be useful in their businesses. A common response is ‘but, what’s the utility value of bitcoin? What makes it valuable? I can’t see it or touch it.’
I enjoy this question because it means the person asking is trying to think of bitcoin as money, which is exactly what it is. But because the money everyone is used to working with has a physical aspect in the cash of cash, paper notes or coins, or gold & silver which has commercial applications too, this can make it hard to apply the same thinking to bitcoin.
The answer to the question about utility value to is understand what bitcoin does:
Bitcoin is a protocol that has a higher network uptime than any financial institution, bank, reverse bank, trading desk, etc.
Bitcoin is issued every 10 minutes together with the new block of transactions added to the blockchain.
Transaction blocks (the blockchain) cannot be altered.
The full issuance schedule of bitcoin is already known from now until the last bitcoin is issued in over 100 years from now.
Bitcoin is open source, and can be verified by anyone.
Bitcoin can also be used by anyone, anywhere in the world, and at any time of the day.
So, what am I saying here? Bitcoin is certainty. And who values certainty? Well, EVERBODY.
The international businesses want to know they can invest in a foreign country at a large scale without having laws change, policy changes, wars, regime changes, etc that could affect their investments.
Countries want to know that their trading partners can be relied upon to honour trade agreements.
Financial sectors want stability. They want to know that no sudden changes to laws and regulations can be expected.
Local businesses want to know that the tax laws and labour laws won’t change overnight, and that the price they paid for materials last month is the same price they can expect to pay this month.
Citizens want to know the price of fuel won’t double overnight, or the price of food. Or that their savings and investments won’t be nationalised.
Financial markets price in certainty. See how quickly stock exchange indexes adjust to even a rumour or hint of uncertainty – think tariffs for a recent example.
So that is the utility value of bitcoin. Absolute certainty, all the time.
It’s like building your house on the proverbial rock, as opposed to building on the shifting sands.
Name one other thing that we depend upon to make our living and raise our families that that can give you that level of certainty.
In a world that we know is changing, and more rapidly all the time, for the first time in human history we have certainty.
Absolute certainty, forever.
