Apples and Oranges

​A foolish idea came to me this morning. A “comparison between art and Bitcoin”, especially in how each relies heavily on perceived value rather than intrinsic, production-based value. Both art and Bitcoin indeed share qualities that set them apart from tangible goods priced on production costs or inherent utility. Here’s a breakdown of why this assumption has a basis.

Artists came first
Estimating the number of artists compared to the global population is tricky, especially because defining who counts as an "artist" is subjective some might say it's anyone who creates art, while others might consider only those pursuing art professionally. However, let’s try to form a rough estimate. According to various studies and reports from organizations like UNESCO and arts councils, around 1–3% of the global workforce might be involved in creative fields, which would encompass all kinds of artists, visual artists, musicians, writers, performers, etc. Given a world population of about 8 billion, this could suggest anywhere from 80 million to 240 million people might identify as artists or work creatively in some capacity. If we narrow this further to fine arts (visual artists, sculptors, painters), it could be closer to 0.1–0.5% of the population, which would mean around 8–40 million people globally. Of course, these numbers are very approximate, as they vary by culture, access to resources, and how each society defines and supports artistic work. Still, this range gives a sense of the rarity and diversity of artistic voices relative to the global population.

Then came Bitcoin
Created in 2009 by an anonymous individual or group known as Satoshi Nakamoto, Bitcoin is the world’s first decentralized digital currency. It operates without a central authority, relying instead on a peer-to-peer network and blockchain technology to manage transactions. Bitcoin’s blockchain is an immutable, transparent ledger that records all transactions, making it secure, tamper-proof, and resistant to censorship. Unlike traditional currencies, Bitcoin has a limited supply of 21 million coins, which adds scarcity and can increase its value over time. Bitcoin’s value is primarily influenced by demand, market sentiment, and its scarcity, making it highly volatile. Yet, its appeal lies in its potential as a store of value, an alternative to fiat currencies, and a hedge against inflation. Additionally, Bitcoin has sparked the broader adoption of cryptocurrencies and blockchain technology across various industries, from finance to supply chains.

Over the years, Bitcoin has grown from a niche interest to a mainstream investment, with institutions and governments increasingly acknowledging its relevance. Its decentralized nature and disruptive potential continue to fuel debates about the future of money, privacy, and financial sovereignty, as Bitcoin challenges traditional systems and empowers individuals globally.
 
1. Value Perception and Demand

• Art: The value of art is largely determined by subjective factors such as its creator, uniqueness, historical or cultural significance, and the emotional response it evokes in the viewer. Because of these unique qualities, people are willing to pay for art based on its intangible worth to them, not just on the materials or time used to create it.
• Bitcoin: Bitcoin’s value is determined by what people are willing to pay for it in a highly speculative market. It's underpinned by the belief in its scarcity, its decentralized nature, and its potential as a financial asset. Like art, it lacks a standard price tied to a tangible production cost, depending instead on what investors believe it’s worth in the market.

2. Fluctuation Over Time

• Both art and Bitcoin can experience large price fluctuations. Art can appreciate or depreciate due to shifting tastes, the artist’s reputation, or even macroeconomic conditions. Similarly, Bitcoin is volatile, swayed by market trends, investor sentiment, regulatory changes, and technological developments.

3. Absence of Production-Based Value

• Art and Bitcoin both lack a production-based valuation model commonly found in tangible goods, where costs for materials, labor, and logistics contribute to pricing. For example, physical goods like a car or a house generally have prices linked to the cost of manufacturing, materials, labor, etc. However, with art and Bitcoin, their prices can soar far beyond any "cost to produce" due to market sentiment and perceived scarcity.

4. Speculation and Investment Value

• Both art and Bitcoin can serve as speculative assets. Art collectors or investors may buy pieces hoping they appreciate its value, much like investors in Bitcoin might buy it as a hedge or a speculative bet.

Some Nuances to Consider:

• While both lack production-based intrinsic value, art can have cultural or historical significance that provides a kind of intrinsic social value, even if it’s not financial. The emotional and aesthetic impact of art can lend it lasting worth beyond monetary value.
• Bitcoin has potential utility within the financial world due to its decentralized and borderless nature, which could justify part of its valuation based on this unique function, even if it’s still largely speculative.

 
Bitcoin indeed have a strict limit—21 million coins—that makes it rarer, in a purely numerical sense, than artists. And its value is uniquely tied to market forces, demand, and scarcity. Unlike artworks, which are valued for their uniqueness, vision, or emotional impact, Bitcoin’s value is more abstract, often appealing to a desire for security, autonomy, and alternative assets.

Art, on the other hand, is abundant in a more flexible way. There are countless unique works, each one distinct and with emotional or cultural significance that can’t be precisely quantified. However, art’s abundance in creativity doesn’t mean it’s universally valued—while everyone can feel emotions, the appreciation of art is deeply personal and subjective, and not everyone values it in monetary terms.

Bitcoin’s fixed supply, combined with its appeal to people’s emotions, like the desire for freedom from traditional financial systems gives it a kind of universality that contemporary art often struggles to achieve. In this light, Bitcoin becomes almost like an emotional artifact itself, shaped by taste and desire for an alternate form of security, which, as you say, gives it an edge in global perception.

Both art and Bitcoin are valued by perceived worth rather than any intrinsic production cost, leading to their volatility and speculative nature. However, each may still have different forms of “real” value. Art in its cultural or emotional impact and Bitcoin in its potential utility as a digital asset.

So, we see that there are more artists than Bitcoins in the world, which means crypto is scarcer than creativity! But while art asks us to feel, Bitcoin asks us to hold, maybe that’s why one hangs on our walls and the other hides in our wallets. So next time you're wondering where to invest, remember, art might fill your soul, but Bitcoin could fill your portfolio… unless you end up buying art with Bitcoin, in which case, congrats—you’ve achieved peak modernity!

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