Distinguishing Currency from Assets
Recently, many articles have delved into where the true value of Bitcoin lies. Most discussions begin with its supply cap, comparing it to the traditional asset, gold. Simply put, Bitcoin has strict limitations hardcoded into its protocol—the total supply is capped at 21 million coins, no more, no less. Lost private keys do not trigger “re-issuance.” Because this closely mirrors the scarcity of gold, many refer to it as “Digital Gold.” Proponents further argue that Bitcoin is more portable, resistant to centralized control, and easier to self-custody than physical gold.
However, the financial world also harbors significant skepticism. Critics reject the “Digital Gold” label, pointing to Bitcoin’s extreme volatility (though gold has seen its own share of turbulence recently) and a perceived lack of intrinsic value. Unlike gold, which has industrial applications, Bitcoin seems to serve no purpose other than being an asset. Furthermore, questions persist regarding the highly speculative nature of its holders and trading patterns.
In this article, I will set aside the debate over whether Bitcoin is “Digital Gold” or a “worthy” asset. Instead, I want to discuss the concept of “Value” itself, examining this digital creation through three specific lenses. As for whether it possesses value, is worth an investment, or will one day reach a million dollars per coin—I leave those judgments to the reader’s own reflection.
Before discussing value, we should clarify the difference between “Currency” and “Assets.” According to financial standards, a currency generally requires universal acceptance, ease of recognition, divisibility, uniformity, and portability to function as a daily medium of exchange. In many regions, Bitcoin clearly lacks “universal acceptance”—many have heard the name but don’t know how to use it, and merchant adoption remains low. Thus, it is still far from being a universal currency.
An Asset, on the other hand, refers to a resource with economic value that can store wealth or provide future benefits (such as gold, stocks, or real estate). Unlike currency, an asset does not necessarily need to be widely accepted for payment; its primary emphasis is on its store of value function. In many circles, Bitcoin is viewed as an “alternative asset”—a digital version of gold—meant for storing value rather than making daily payments.
Where Does Value Come From?
The value of an object is a highly subjective concept. If an object is meaningful to you, if you recognize it, need it, or want it, it has value to you. But that value may not translate to someone else. For example: imagine you take your family on a trip and pay a street artist $2,000 for a family portrait. To you and your family, that painting is worth roughly $2,000. To a passing stranger, however, that same painting might be unwanted even if offered for free. Here, the discrepancy in value is stark.
From this example, we can see that for an object to possess broader value, the first essential element is Consensus. With consensus, any object can be used for trade. Think back to playing “flea market” in elementary school using the toy banknotes found in the back of math textbooks. If everyone agreed the red note was $100 and the blue was $1,000, they gained transactional value. We could even change the rules, and as long as the classmates agreed, the system worked. To trade an item with more people, you simply need a broader consensus.
However, if one student could easily print massive amounts of those notes at home and bring them to school, would the consensus hold? This brings us to the second element: Scarcity. Rarer items are generally assigned higher values. We see this everywhere: limited-edition concert tickets or sneakers trigger frenzied demand and sky-high prices. Even in geopolitics, when oil supply is expected to drop, prices rise. Purely from a quantitative standpoint, when all else is equal but supply decreases, subjective value tends to increase.
Finally, there is Utility. Consider two tutors, both juniors in Electrical Engineering. One has a stellar track record, with all three of their students getting into their dream universities. The other taught three students, but none reached their goals. Which tutor can command a higher price per hour? The answer is obvious. This leads to the question many ask about Bitcoin: “Once I buy it, what can I actually do with it?”
The Interconnectedness of the Three Elements
These three factors—Consensus, Scarcity, and Utility—are not independent; they are deeply intertwined. A thing without consensus has no market value regardless of how scarce it is. A unique, out-of-print Pokémon card might sell for $1 million in New York, but to a breakfast shop owner in Taiwan who has no interest in cards, the price is incomprehensible because there is no shared consensus on its utility or value.
Conversely, even if something has high utility, if it is ubiquitous, its value remains low. Paper products are essential and used daily, but because they are easily mass-produced, their unit value is low. It is also worth noting that an item doesn’t need all three to have value. Fiat currency relies almost entirely on massive consensus and trust in the issuing government; if that trust vanishes, the value collapses regardless of utility.
Each asset’s value is a unique mix of these three factors, and they constantly influence how we perceive what an object is “worth.”
What About Bitcoin?
Re-examining Bitcoin through these three lenses as of early 2026:
- Consensus: Bitcoin still needs to be understood and accepted by more people—not just individuals, but governments and institutions. Gold’s consensus was built over millennia; Bitcoin clearly needs more time to mature.
- Scarcity: Bitcoin’s design satisfies this perfectly. As of April 2026, over 20 million BTC have been mined (approx. 95% of the total). Less than 1 million remain to be minted at an increasingly slow rate (currently around 450 BTC per day) until the year 2140. Furthermore, an estimated 3 to 4 million BTC are permanently lost due to misplaced keys, making the actual circulating supply even smaller than the theoretical cap. This “mathematically guaranteed absolute scarcity” is more transparent and certain than that of gold.
- Utility: The Lightning Network has significantly improved Bitcoin’s potential as a medium of exchange by lowering fees and increasing transaction speeds. However, many people still don’t recognize Bitcoin, and even those who do find merchant adoption low or existing digital payment systems more convenient. This reinforces its current role as a “Value Store” asset rather than a “Daily Payment” currency. Consensus drives utility, and improved utility drives consensus. This complex evolution requires time to validate.
What I Take Away
Every valuable item in the world—from oil, gold, and stocks to the ham and egg toast you had for breakfast—can be analyzed through these three factors. Bitcoin is no exception.
Whether it is a worthy investment depends on whether you believe its current shortcomings can be improved in the future, and how likely that improvement is. Use these lenses to evaluate if the potential rewards outweigh the current risks. The same test applies past Bitcoin — I’d already run into a version of it at ETH Taipei 2025, where Vitalik Buterin asked whether we’d still be here if Ethereum’s price had never skyrocketed, a question that led me to conclude its worth lies in its ethos and vision rather than its market price.
Good luck with your investments!