Since it’s inception, there’s been a lot of fear, uncertainty and doubt regarding the true value of bitcoin.

One of the latest controversial statements was stated by Cornell University Professor Eswar Prissad, who claims that, while the blockchain technology underlying bitcoin has real use – case, bitcoin itself “may not last that much longer.”

“Given that bitcoin is not serving well as a medium of exchange, I don’t think it’s going to have any fundamental value other than whatever investor’s faith leads it to have,” Prasad said.

So can blockchain technology be as Prasad claims, “fundamentally transformative,” without the success of bitcoin, the original asset that was built on top of the technology?

While Prasad is right with his contention about there being an amount of faith that must be attributed to the value of bitcoin in order for it to be an asset, he’s wrong in leaving out the fact that bitcoin has a proof-of-work use-case that allows it to have intrinsic value.

Bitcoin is the first faith-based asset with a proof-of-work mechanism to back it up in the form of blockchain technology.

Bitcoin derives it’s value from the work the computers on the network contribute via a process called mining. Powerful computers all over the world supply a vast amount of processing power towards the work of validating and securing every single transaction. For their service provided, they’re rewarded with new Bitcoin.

Bitcoin is hard-coded to be scarce, which contributes to its resistance to inflation. Scarcity is a basic principle of economics.. There will never be more than 21 million Bitcoin.

Not only is the supply capped, but the amount of new Bitcoin being mined is declining over time in a predictable way. Every four years, in an event called a “halving,” block rewards paid to miners in the network are cut in half. 

This helps ensure that the supply is always reducing which, by the basic economic principle of scarcity, has worked to keep the price of Bitcoin broadly trending upwards over the long-term — from less than a penny at the start to more than $50,000 as of mid-February, 2021. (See Bitcoin’s current price).

While Bitcoin might not be backed by a physical asset like gold, neither is the US dollar or virtually any other modern fiat currency.

And so cash may be a decreed faith.

But Bitcoin is faith with works.