In discussions about the value of Bitcoin (BTC), debates often spiral into endless arguments. Even when invoking economic giants—Austrian economics, Marxist theory, or Keynesian principles—the question remains murky. Is Bitcoin truly valuable, or is it just a speculative bubble?
Some claim BTC is worthless digital trash.
Others argue it has no intrinsic value but still carries a price.
Some believe its scarcity gives it worth.
Others point to the massive energy consumption behind mining as a source of value.
Still others credit the network’s computational power or its use in illicit transactions.
But these perspectives only scratch the surface. To truly understand Bitcoin’s value, we must go deeper—not just to what people demand, but to why they demand it. We must explore the origin of demand itself.
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What Is Demand? Beyond Supply and Market Assumptions
In economics, demand is typically discussed alongside supply, forming the foundation of market dynamics. But this duality assumes something critical: that a market already exists.
Yet markets don’t appear out of thin air. They emerge from deeper human behaviors and social structures. To grasp the roots of value, we cannot start with an existing market—we must begin before markets exist at all.
A key distinction in product design thinking—often echoed in behavioral economics—is between "need" and "want." In Chinese, the word xūqiú (需求) combines xū (需), meaning internal necessity or desire, and qiú (求), meaning the act of seeking fulfillment through interaction with others.
- Need (需) is personal: hunger, security, belonging.
- Demand (求) is social: the method by which one seeks to fulfill that need through exchange.
Economics does not concern itself with inner desires. As Ludwig von Mises wrote in Human Action, economics studies purposeful behavior—not the emotional or psychological motivations behind it. It cares not whether your goal is noble or selfish, only that you act deliberately to achieve it.
Thus, demand centers on "qiú"—the social mechanism of seeking satisfaction through interaction.
Consider food:
- Rice fills your stomach: this is a natural relationship between object and individual—this defines use value.
- Ordering rice via an app involves a transaction with a restaurant: this is a social relationship, defining exchange value.
As Karl Marx noted in Capital, economic value arises not from utility alone, but from social relations embedded in exchange. Without society, there can be no exchange. Without exchange, no value. Therefore, value is relational—it emerges from human interaction.
Only after society forms do markets arise—and their primary function becomes price discovery: translating relational value into quantifiable prices using money as a measuring tool.
Money, then, becomes the sacred symbol of value. When your boss praises your work, saying, “Great job—this has high value,” what they really mean is: “This will make me money.” In market terms, value equals revenue potential.
This is why Keynesian economics focuses on stimulating demand: increase spending through monetary policy, and you create the illusion—or reality—that things are valuable because people pay for them. Hence, global markets obsess over the Federal Reserve's decisions: demand drives everything.
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The Hidden Foundations of Demand
For demand to exist, three conditions must be met:
- A functioning society
- Recognized property rights
- A peaceful environment where exchange prevails over force
Imagine a world where everyone is self-sufficient—no need to interact. No society forms. No exchange occurs. Value cannot emerge.
Now imagine a lawless world where theft and violence are cheaper than trade. Why buy when you can steal? In such chaos, markets collapse. Demand vanishes.
Take the example of a tiger hunting a rabbit: this is not economic demand—it’s biological predation. But when you want to eat chicken, and the chicken belongs to someone else, a social relationship forms. Your desire intersects with another’s property right.
If you kill the owner and take the chicken, you destroy more than life—you destroy value. The chicken loses its exchange value; only its use value remains (to be eaten). By violating property rights, you dismantle the foundation of demand.
Peace requires constraint on violence. Law depends on credible deterrence. This necessitates a central authority—the state—with a monopoly on legitimate force to protect property and enable fair exchange.
But here lies a paradox: the same state that protects property can also threaten it through inflation, seizure, or surveillance.
Enter Bitcoin.
Bitcoin’s design offers an alternative:
- Its massive computational power acts as a form of neutral, decentralized enforcement.
- Its cryptographic protocols serve as unchangeable rules—digital law.
- Together, they create a system where property cannot be seized, transactions cannot be reversed, and ownership is provable without intermediaries.
In essence, Bitcoin replicates the core function of the state—protecting property rights—without relying on centralized authority.
This is why traditional economists struggle with Bitcoin: their models assume markets operate within state-enforced legal frameworks. Bitcoin operates outside that framework. It exists in the blind spot of conventional economic thought.
Why People Demand Bitcoin
People don’t demand Bitcoin because it’s shiny or trendy. They demand it because it solves a fundamental human problem: how to store value securely in an uncertain world.
Bitcoin satisfies several deep-seated needs:
- Scarcity: Only 21 million will ever exist.
- Censorship resistance: No one can block your transactions.
- Permissionless access: Anyone with internet can participate.
- Trust minimization: Security comes from math, not institutions.
These features converge to create a new kind of demand—one rooted not in consumption or speculation alone, but in survival and sovereignty.
When hyperinflation erodes savings in Venezuela, people turn to BTC.
When capital controls restrict movement in Nigeria, entrepreneurs use BTC.
When political regimes threaten wealth confiscation, dissidents safeguard assets in BTC.
This isn’t speculation—it’s real demand driven by real risk.
Unlike most altcoins—which depend on centralized infrastructure or regulatory goodwill—Bitcoin stands apart. It competes directly with state-backed monetary systems by offering a superior form of property protection.
Its value isn’t derived from energy input or mining cost (though those contribute to security). Nor is it based solely on network effects (though those matter). Its value stems from its ability to enforce inalienable ownership in a world where such guarantees are increasingly rare.
Frequently Asked Questions
Q: Doesn’t Bitcoin’s value rely on speculation?
A: While speculation plays a role, lasting value comes from utility. Bitcoin’s utility lies in secure, global, irreversible value transfer and storage—especially where traditional systems fail.
Q: Can’t governments ban Bitcoin and destroy its value?
A: Bans may limit access in certain regions, but Bitcoin’s decentralized nature makes it resistant to shutdown. Suppression often increases demand in oppressed economies.
Q: How can something intangible have real value?
A: Value isn’t tied to physicality. Trust, scarcity, and utility determine worth. Dollars are mostly digital; gold has limited industrial use. Bitcoin shares these traits but adds programmability and global accessibility.
Q: Isn’t Bitcoin just used by criminals?
A: Early adoption by illicit actors doesn’t define long-term use. The internet was once feared for similar reasons. Today, Bitcoin is more transparent than cash—every transaction is publicly verifiable.
Q: What backs Bitcoin?
A: It’s backed by its protocol rules, cryptographic security, decentralized consensus, and growing network of users who trust and use it as money.
Q: Will Bitcoin replace fiat currencies?
A: Full replacement is unlikely soon. But it’s emerging as digital gold—a global reserve asset outside any single nation’s control.
Final Thoughts: Need Starts in the Mind, Demand Emerges Through Force
Human desire begins internally—but becomes economic demand only when channeled through social mechanisms of exchange. That channel depends on trust, law, and enforcement.
Bitcoin reimagines this chain. It replaces institutional trust with cryptographic truth. It substitutes state violence with distributed computation. It turns individual need into collective demand through technological inevitability.
In doing so, it answers the oldest economic question: Why do things have value?
Because people want them—and now, more than ever, they believe Bitcoin helps them survive, thrive, and remain free.
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