Bitcoin's Proof of Work Value and Marx’s Labor Theory of Value (Marxism)

    What is bitcoins actual value? Ordinarily, this is one question that would be quite easy to answer, as all you would need to do would be to check the leading cryptocurrency websites. But what is behind its value? This is one question that varies from one person to another, depending on who you approach.

    Proof Of Work

    There are those that seem to have the answer to this question at their fingertips. Bitcoin is valuable as there is an attributed cost in the form of energy, and processing power used to mine it. Well, this is an answer based on the Marx’s Labor Theory of Value.

    In the theory, Marx claims that every item has a value that is created by the labor/effort/amount of work that goes into creating it. So based on this statement, it means that bitcoin’s value is bound to keep rising, as long as its mining costs continue to increase.

    The Misconception

    In reality, this does not apply to bitcoin, as Marx’s value of labor is a complete misconception. Although you can, in reality, price something based on the total amount of work that has gone into creating it, its total value is derived from something else altogether.

    There exists a relationship between the price of bitcoin and the accompanying mining costs, but this is a relationship that actually flows in opposite directions. An increase in its price encourages more people into joining the mining pool.

    An increase in the number of miners increases the hash rate, which in return makes it even harder to create blocks. This is a scenario that then causes the cost of doing this to increase significantly.

    Personality Witnesses

    There are those that have gone on to make valid comparisons between the cryptocurrency and the characteristics that are associated with fiat and gold valuables. Of these, there have emerged up to nine shared characteristics, which include widely used, scarcity, hard to counterfeit, durability, fungible, portability, easily stored, divisibility, and easily recognizable.

    In many of these shared characteristics, bitcoin appears like gold valuables on steroids—a point that is often pointed out by many of its enthusiasts, including Winklevii. However, although close to all these characteristics can, to some extent be used to provide an explanation on what might make something more or less valuable, there is still one important word missing-desirability

    Living Proof

    That beautiful piece of furniture sitting in your living room, gold, and bitcoin all have a single thing in common—desirability. Regardless of how beautiful they are, they will be worth nothing if no one wants to own them. Their actual value is obtained from their desirability.

    The price of an item or cryptocurrency may be based on a given value, but its value cannot be truly identified by its pricing. That is something that can only be established when something is acquired and then sold. As a result, the market gets to dictate its value and will continue to dictate its value and that of everything else. May it remain desirable for a long time to come.

    Get Free Email Updates!

    *Action* Enter Best Email to Get Trending Crypto News & Bitcoin Market Updates

    I will never give away, trade or sell your email address. You can unsubscribe at any time.

    Bitcoin Exchange Guide News Team
    B.E.G. Editorial Team is a gracious group of giving cryptocurrency advocates and blockchain believers who want to ensure we do our part in spreading digital currency awareness and adoption. We are a team of over forty individuals all working as a collective whole to produce around the clock daily news, reviews and insights regarding all major coin updates, token announcements and new releases. Make sure to read our editorial policies and follow us on Twitter, Join us in Telegram. Stay tuned. #bitcoin

    [Alert] Use the author's self-conducted information at your own risk, do you own research, never invest more than you are willing to lose.

    [Disclosure] The published news and content on BitcoinExchangeGuide should never be used or taken as financial investment advice. Understand trading cryptocurrencies is a very high-risk activity which can result in significant losses. Editorial Policy \\ Investment Disclaimer


    Please enter your comment!
    Please enter your name here


    Live Bitcoin Price & Latest BTC Charts

    Today's Latest Crypto News

    Binance CEO: Once QE Money Starts Flowing, BTC's Price Will Go Up ‘Very Dramatically'

    “Since coronavirus took over, business-wise the platform is doing really well” - CZ COVID-19, QEg, depression, and countries printing a lot of money...

    South Korean Central Bank to Roll Out Pilot Program to Test CBDC Through Dec 2021

    On April 6, South Korea’s central bank has made the announcement that it started a pilot program for assessing the logistics of a central...

    Former Goldman Sachs Fund Manager Suggests Allocating 25% in Bitcoin

    When Raoul Pal, the former hedge-fund manager who founded Real Vision first learned the coronavirus was spreading rapidly, he thought, “The whole world's f---ed,”. "I...

    PwC Report Reveals 2019's Crypto M&A's Dropped Sharply; Total Value Decreased By 76%

    The 2017 market boom led to the new era of funding in the decentralized space called ICO, however as we entered the bear market...

    How Much New Inflow Bitcoin Needs to Stay at this Price Level?

    For the last 2.5 years, $400 million of new investment each month kept BTC price at $7,000, after halving it would require just...

    BitcoinExchangeGuide is a hyper-active daily crypto news portal with care in cultivating the cryptocurrency culture with community contributors who help rewrite the bold future of blockchain finance. Subscribe on Google News, see the mission, authors, editorial links policy, investment disclaimer, privacy policy. Got News? Contact us, we are human too. Note: nothing here is financial advice, do your own research thoroughly.