The Evolution of the Theory of Value: from Marx to Crypto Currency

A commodity, according to Marx, is any good or service within which a socially necessary labor time is needed so that its value is being derived from the time spent by the laborer. A given commodity has an exchange value and can play the role of medium of exchange, as well as fulfil all the other functions of money, precisely because it is a commodity. This applies to the precious metals, gold and silver, in the same way it applies to all the various commodities which, throughout history, have functioned as money. In today’s world, there are some commodities in the shape of services cryptographically provided, like Bitcoin, but the value derived from the labor time is barely noticed causing others to view the face-value of such commodities equal to ZERO. Though in reality some digital currencies, in which the labor time is scarcely rooted, have more value than gold or fiat money, yet others see it as only a bubble and it won’t last too long until it goes back to zero. This paper is an attempt to view and discuss the evolution of the theory of value from the classical to the modern aspect with Crypto Currencies. The paper starts off with an introduction to the Bitcoin system viewing the process that it followed to become a so-called currency. Then it proceeds to analyze the nature of bitcoin according to Marx’s theory of money as it looks at the reasons behind bitcoin getting this value, and last looks at the difference in fluctuation between cryptocurrencies and fiat money as well as the reasons behind the high volatility experienced in Bitcoin.