Why Bitcoin Has Value: A Question With 8 Billion Different Answers
In a world where traditional money increasingly fails to serve human needs, Bitcoin emerges not as a single solution, but as a mirror reflecting what each of us lacks—and what we might reclaim.
**Reading time**: ~15 minutes
Ask ten economists why the dollar has value, and you’ll get ten different answers—each one more convoluted than the last, wrapped in jargon about “legal tender” and “full faith and credit.” They’ll gesture vaguely toward government backing, institutional trust, historical precedent.
Now ask someone who’s watched their life savings evaporate overnight.
Stories emerging from Venezuela’s economic collapse tell a consistent narrative: the day the bank froze accounts, the moment month’s salary bought three eggs, the friend who showed a different way—no bank, no government permission, no 40% exchange rate robbery. Just a transaction that took ten minutes instead of ten days. Venezuela’s inflation hit 1,698,488% in 2018, effectively erasing the purchasing power of an entire nation’s savings in months [1]. For millions of Venezuelans documented in Reuters and Washington Post reports throughout 2019-2020, Bitcoin became not an investment thesis but a survival tool [2].
Value isn’t found in economics textbooks. It’s discovered in necessity.
And here’s what the textbooks won’t tell you: the entire debate about Bitcoin’s value has been framed wrong from the start.
Quick thought: When’s the last time you sent money internationally? What hoops did you have to jump through?
The Austrian Secret: Value Lives in the Eye of the Beholder
In 1871, Carl Menger dropped a bomb on classical economics that we’re still feeling today. He proved something radical: value doesn’t exist in objects. It exists in the minds of people who use them.
Menger wrote in his groundbreaking work Principles of Economics: “Value is thus nothing inherent in goods, no property of them, nor an independent thing existing by itself. It is a judgment economizing men make about the importance of the goods at their disposal for the maintenance of their lives and well-being” [3].
Consider Bitcoin itself as the example: a satoshi worth $0.0006 means nothing to an American checking their portfolio. But to a Salvadoran receiving their first remittance—replacing a Western Union transfer that would have cost 10% plus a two-day wait—that same satoshi represents something revolutionary. Same cryptographic unit. Radically different value.
This isn’t relativism—it’s reality. Menger called it the subjective theory of value, and it explains why gold became money, why beanie babies temporarily had markets, and why your grandmother’s “worthless” Bitcoin might actually be her retirement plan.
If value is subjective, then demanding that Bitcoin have one universal reason for value is like demanding that food solve only hunger—ignoring that it also creates culture, brings people together, signals status, preserves traditions.
Bitcoin doesn’t need to be the same thing to everyone. It just needs to be something to someone.
“But wait,” the critic interrupts, checking CoinMarketCap, “if value is subjective, why does Bitcoin trade at a specific price?”
Beautiful question. Because price isn’t value—price is what happens when millions of individual value assessments collide in a marketplace. You might value Bitcoin as freedom money. I might value it as savings technology. She might value it as inheritance insurance. We all arrive at the market with different “whys,” but when we trade, we discover a price that—for that moment—satisfies all our different subjective valuations.
The price doesn’t tell you what Bitcoin is. It tells you what millions of people have independently decided it’s worth to them, right now.
What does money mean to you personally? I’m genuinely curious—drop a comment with your first thought.
The Permission Slip Problem
The World Bank’s 2024 data reveals a staggering reality: global remittances reached $656 billion in 2023, with $669 billion projected for 2024 [4]. The global average remittance fee sits at 6.35%, but corridor-specific rates often exceed 10%—Sub-Saharan Africa faces average fees of 7.9% [5].
Do the math: $42 billion annually extracted by middlemen who add no value beyond routing numbers through legacy infrastructure. For context, that’s more than the GDP of 100 countries—enough to fund the entire WHO annual budget four times over.
For the 23% of Nigerian adults who send remittances according to World Bank data [6], this isn’t abstract economics. Try sending $10,000 to family in Lagos. Your bank will ask why. They’ll file reports. They’ll delay the transfer. That $10,000 becomes $9,210 by the time it arrives. And it takes three to seven business days—as if money needs weekends off.
Now try sending Bitcoin. You type an address, confirm the transaction, and in ten minutes it’s done. No bank manager’s approval. No “suspicious activity” flags. No business hours. The network doesn’t care if it’s Christmas or if you’re sending to a sanctioned country or if you forgot to fill out Form 37-B in triplicate.
“But criminals use Bitcoin!”
Here’s context the critics omit: traditional banks launder an estimated $800 billion to $2 trillion annually—2-5% of global GDP according to UN estimates [7]. HSBC alone admitted to moving $881 billion for drug cartels, paid a $1.9 billion fine (roughly five weeks of profit), and no executives faced jail time [8]. Deutsche Bank, Standard Chartered, and countless others have similar records.
Meanwhile, blockchain analytics firm Chainalysis reported that illicit activity represented just 0.34% of all cryptocurrency transaction volume in 2023—down from 0.42% in 2022 [9]. Bitcoin’s transparent ledger makes it demonstrably worse for criminals than cash, which leaves no trace. Every Bitcoin transaction is permanently recorded, traceable, and increasingly monitored by sophisticated analytics tools used by law enforcement worldwide.
The question isn’t whether Bitcoin enables crime—it’s why we hold a transparent system to standards we never applied to opaque institutions.
For the Lebanese citizen watching their bank impose capital controls in 2019, freezing their life savings while the pound lost 98% of its value [10]? For the Nigerian entrepreneur locked out of PayPal and the global digital economy because of their passport? For the $656 billion in annual remittances that get taxed by middlemen who create zero value?
Bitcoin isn’t theoretical freedom. It’s Friday afternoon freedom. It’s “send money to your family right now” freedom.
If you’ve ever had a payment declined or delayed for no clear reason, you know this frustration. Tag someone who’s lived through this nightmare.
Your Bank Account Is Not Yours
February 2022. The Canadian government invoked the Emergencies Act to freeze bank accounts belonging to trucker protest supporters. Not criminals. Not terrorists. Citizens whose political views the government disliked. The Royal Canadian Mounted Police froze 206 financial products—bank accounts and credit cards—worth $7.9 million CAD without judicial oversight [11].
One day you have savings. The next day: error message. Account frozen. No judge. No trial. Just power exercised because power could be exercised.
This isn’t new or isolated. Cyprus 2013: surprise “bail-ins” seized 47.5% of deposits over €100,000 overnight—€5.8 billion confiscated from depositors to recapitalize failing banks [12]. Greece 2015: capital controls limited withdrawals to €60 per day for weeks, trapping life savings behind ATM screens [13]. Lebanon 2019: banks imposed informal capital controls, effectively confiscating dollar deposits by forcing conversions at manipulated rates—depositors lost an estimated 80-90% of their savings’ real value [14].
Venezuela, Turkey, Argentina—the pattern repeats across continents and political systems.
“Not your keys, not your coins” sounds like crypto ideology until you understand what it’s responding to. The principle “not your vault, not your gold” has always been true for physical assets, but we accepted that limitation because physical assets require physical security.
Bitcoin is the first time in human history you can have true ownership of digital value. Twelve words memorized, and you’re carrying any amount through airport security in your head. Try that with real estate. Try that with stocks—Russia seized an estimated $300 billion in foreign securities in 2022 [15]. Try that with a bank account in a country experiencing “regime change.”
The self-custody reality: yes, people lose keys. Chainalysis estimates approximately 3.7 million Bitcoin—about 20% of the current supply—are lost or stranded in inaccessible wallets [16].
And you know what? People also lose their wallets. Fall for phishing scams. Lose their homes in financial crises caused by the banks that were supposed to protect them. The 2008 crisis wiped out $16 trillion in household wealth globally [17]. How many lost keys is that?
Responsibility is the price of ownership. We teach driver’s ed, not ban cars. We teach security hygiene, not surrender to gatekeepers who’ve repeatedly proven they’ll lock you out when convenient.
Platforms are emerging that bridge this gap. Services like Sovereign Swap and others now offer Bitcoin-collateralized loans—you get access to credit. No credit score required—your collateral is transparent on-chain. It’s banking without banks, credit without gatekeepers, financial access without permission.
For the 1.4 billion unbanked adults globally according to the World Bank’s 2021 Global Findex database [18]? Traditional banking infrastructure requires minimum balances, documentation, physical proximity to branches—barriers that exclude billions. Bitcoin requires only internet access and a device, both increasingly ubiquitous even in developing economies.
Real talk: Have you ever been denied financial access for reasons that felt arbitrary? What happened?
The Energy Question Nobody Asks Right
“Bitcoin wastes energy!”
Define “waste.”
You consume energy streaming Netflix four hours per night. The average American household uses 10,500 kWh annually [19], with significant portions on entertainment and convenience. Americans consume energy on always-on devices—phantom loads account for 5-10% of residential electricity use [20]—and the air conditioning required to cool bank branches open 40 hours per week.
We don’t call it waste because we’ve collectively decided these things have value.
Menger’s insight applies here too: the value judgment is subjective. One person’s waste is another person’s necessity.
Bitcoin uses energy to secure a financial network serving millions of people in every country on Earth, processing over $1.6 trillion in quarterly transaction volume as of Q4 2023 [21], operating 24/7/365 without downtime. The Cambridge Bitcoin Electricity Consumption Index estimates Bitcoin’s annual energy consumption at approximately 120-150 TWh [22]. That energy does something: it makes the network attack-resistant. Every joule spent mining is a joule an attacker would need to spend to compromise the system.
Security has a cost. The question isn’t whether Bitcoin uses energy—everything valuable uses energy. The question is whether that security is worth the energy cost to the people using it.
The critics miss something fundamental: Bitcoin incentivizes renewable energy development.
Miners don’t care about energy sources. They care about price. The cheapest energy is often stranded energy—natural gas flared at oil wells, literally burned into the atmosphere for nothing. The U.S. alone flared 145 billion cubic feet in 2023 [23]—wasted energy that Bitcoin miners can monetize, reducing atmospheric emissions while generating economic value.
The Bitcoin Mining Council’s 2024 survey found that 59.4% of Bitcoin mining uses sustainable electricity, making Bitcoin mining one of the most sustainable industries globally [24]. In Iceland: geothermal. In Norway: hydroelectric. In Texas: wind and solar during peak production when the grid can’t absorb it all. In El Salvador: volcanic geothermal energy now powers Bitcoin mining, creating economic incentive for infrastructure investment [25].
Bitcoin isn’t competing with hospitals for power. It’s monetizing energy that would otherwise be wasted while creating economic incentives for renewable development in remote locations where traditional industries won’t invest.
Compare Bitcoin’s energy footprint to the traditional banking system: a 2021 study by Galaxy Digital estimated traditional banking consumes 263.72 TWh annually when accounting for branches, ATMs, armored cars, employee commutes, server farms, and Swift network infrastructure—nearly double Bitcoin’s consumption [26].
But more fundamentally: the people using Bitcoin have decided the security is worth the cost. Venezuelans aren’t debating energy efficiency—they’re using the tool that preserves their purchasing power when their government destroys it. That’s subjective value in action.
Here’s my challenge: name something you use daily that consumes energy but that someone else might consider “wasteful.”
The Rorschach Test
Bitcoin survived Mt. Gox—850,000 BTC stolen, $450 million at the time. Survived China banning it in 2013, 2017, 2021, and probably twice more between. Survived 80%+ price crashes: the 2011 crash saw a 93% decline, 2013-2015 saw 85%, 2017-2018 saw 83% [27]. Survived mainstream media declaring it dead 474 times according to 99Bitcoins.com’s ongoing obituary count [28]. Survived exchange collapses, regulatory uncertainty, competitor coins, and Warren Buffett calling it “rat poison squared.”
Its market cap represents hundreds of billions in collective valuation—hovering around $850 billion to $1.3 trillion depending on price action [29]. Not speculation—revealed preference. People don’t maintain belief through 80% drawdowns and decade-long criticism unless something deeper than price is happening.
What’s happening is that millions of people across 190 countries have financial needs their current money isn’t meeting.
The Norwegian sees inflation protection against European monetary instability. The Venezuelan sees survival—Bitcoin adoption in Venezuela surged as hyperinflation destroyed the bolivar. The Nigerian sees access to global markets—Nigeria ranks among the top countries globally in cryptocurrency adoption according to Chainalysis’s 2023 Global Crypto Adoption Index [30]. The American libertarian sees freedom from surveillance capitalism—credit card companies generate billions selling transaction data to advertisers [31]. The Afghan woman sees an account her husband can’t freeze. The remittance sender sees 6% of their income not vanishing into Western Union’s coffers.
Bitcoin is a financial Rorschach test. You see what you need.
It’s not a bug that it means different things to different people. It’s the feature. The subjective theory of value explains this perfectly: a tool can be simultaneously a store of value, a medium of exchange, a privacy technology, a protest against monetary debasement, and a neutral settlement layer for global commerce.
All of those are true. None of them are the truth.
Asking “why does Bitcoin have value?” is like asking “why does food have value?” The answer depends entirely on whether you’re hungry. And right now, millions of people are starving for financial tools their governments and banks won’t provide.
So here’s my question for you: What would Bitcoin need to do for you to consider it valuable?
Not your neighbor. Not the economists. Not the critics or evangelists. You.
What financial problem in your life does traditional money fail to solve? What would you do with truly borderless savings? With transactions that don’t leak your data to advertisers? With access to credit without a bank’s permission?
Bitcoin’s value doesn’t need defending. It’s being discovered—right now, in 190 countries, by people whose needs look nothing like yours.
The real question isn’t “why does Bitcoin have value?”
It’s “why haven’t you asked what value it might have for you?”
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I want to hear from you: Reply with the single biggest frustration you have with traditional banking or money. Just one sentence. Let’s see if there’s a pattern here.
And if this perspective shifted something for you—even slightly—share this with someone who’s still asking “but what backs Bitcoin?” They might be ready for a different kind of answer.
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References
[1] International Monetary Fund, World Economic Outlook Database, Venezuela inflation data 2018
[2] Reuters, “Venezuelans turn to bitcoin mining to escape economic crisis” (2019); Washington Post, “Bitcoin becomes a lifeline for Venezuelans” (2020)
[3] Carl Menger, *Principles of Economics* (1871), Chapter III
[4] World Bank Migration and Development Brief 39, June 2024
[5] World Bank Remittance Prices Worldwide Database, Q3 2024
[6] World Bank Global Findex Database 2021, Nigeria remittance data
[7] United Nations Office on Drugs and Crime (UNODC), “Money-Laundering and Globalization” (2023)
[8] U.S. Department of Justice, “HSBC Holdings Plc. and HSBC Bank USA N.A. Admit to Anti-Money Laundering and Sanctions Violations” (December 11, 2012)
[9] Chainalysis, “2024 Crypto Crime Report”
[10] Trading Economics, Lebanon Pound exchange rate historical data (2019-2023)
[11] Public Order Emergency Commission, “Report of the Public Inquiry into the 2022 Public Order Emergency” (2023)