Collective Imagination: Why Bitcoin Is Worthless… Just Like Gold & The Dollar

The rise of Bitcoin has been, to say the least, astronomical. Back in 2010 a developer bought two large pizzas from Papa John for the meager price of 10,000 Bitcoins. By January 2018 that would be the equivalent of 150 million dollars. Let’s just admit that you and I are both kicking ourselves for not getting in on the action early. However recently a Morgan Stanley analyst put forth several reasons why all the Bitcoin in the world might actually be worth the grand total of $0.

The main line of argumentation for this opinion is frankly quit solid. As Bitcoin has no interest rate attached to it it’s not considered to be “real currency.” Additionally, Bitcoin is not physical or tangible, like gold or silver, thus having no “intrinsic value.” But perhaps the most important and pivotal line of argumentation is that “if nobody accepts the technology for payment then the value would be 0.” [1] What this truly means is that Bitcoin has no value if we as a collective do not imagine that it has value. However this is not specific to Bitcoin.


Money only has value if we all choose to imagine that it does. All currencies in circulation today are not pegged to a commodity or resource, such as gold, but are in fact fiat currencies. Fiat is a Latin word which means, “so be it,” [2] [3] which in the case of money means let it have value because we imagine that it has value. This is what the Israeli historian Yuval Noah Harari has called collective imagination. [4] [5]

We must remember that the earliest historic form of what we would classify and recognize as “real money” was the silver shekel in ancient Mesopotamia. Silver was not considered to be money because silver has intrinsic value. “You cannot eat, drink or clothe yourself in silver, and it’s too soft for making useful tools – ploughshares or swords of silver would crumple almost as fast as ones made out of aluminium foil. When they are used for anything, silver and gold are made into jewellery, crowns and other status symbols – luxury goods that members of a particular culture identify with high social status.” [6]

Status is simply an imagined social construct. Like money, it is not real and it only exists if we imagine it to exist. To put it simply we all imagine that money has value. Money, no matter its form, has no real value and its value only exists within our imagination. If we as a collective choose to imagine that any form of money is worthless then… it’s worthless. A “real currency” is not “real” because it has imagined value.

The phenomenon of collective imagination is not limited to money. Many of foundations on which most societies are built, such as class social structures, laws and cultural norms, are completely imaginary. It is important to realize this because a great deal of real problems, such as combatting climate change or providing everyone on earth with enough food and clean water, are worsened and exacerbated by imaginary barriers to entry.

If we take the issue of combatting climate change we must admit that it is a real problem that we as a species have the potential to solve with relative ease. The necessary technology exists, the necessary money “exists” and people who have dedicated their lives to end this problem exist. It is often stated that the reason that climate change is difficult to combat is that it would require a large paradigm shift in our world economy. If money is not real and only illusionary then this necessitates that the economy itself is not real. Is it then logical to place imaginary barriers to entry for real problems?


“If we cover an area of the Earth 335 kilometers by 335 kilometers with solar panels, even with moderate efficiencies achievable easily today, it will provide more than 17,4 TW power. This area is 43,000 square miles. The Great Saharan Desert in Africa is 3.6 million square miles and is prime for solar power (more than twelve hours per day). That means 1.2% of the Sahara desert is sufficient to cover all of the energy needs of the world in solar energy. There is no way coal, oil, wind, geothermal or nuclear can compete with this. The cost of the project will be about five trillion dollars, one time cost at today's prices without any economy of scale savings. That is less than the bail out cost of banks by Obama in the last recession.” [7]

From this we can gather that many of our worst existential problems are in actuality caused by our lack of imagination. Then is it not the case that imagination is more often that not the most pragmatic option?