• This article explores the legitimacy of the asset values for Google class C shares (GOOG) and Bitcoin

  • An asset’s value is defined as what the asset holder expects to receive from the asset.

  • Legitimacy is defined as a form of guarantee for an asset’s value.

If non-dividend stocks from Google (GOOG) meet the definition of a Ponzi scheme, what does that mean for Bitcoin?

To answer this question, we must clarify what value is to investors, and more importantly, the idea of legitimacy. 

An asset’s value can be monetary, or intrinsic (non-monetary). The value of an asset can be defined as what the asset holder expects to receive for the asset. Stock investors expect to receive money. Therefore, the value of GOOG is monetary—how much money investor expects to receive for the stock. The same goes for many Bitcoin investors who are trading Bitcoins to make money. However, there are also some investors who want Bitcoins for goods and services. In that scenario, the value of Bitcoin is non-monetary, and in terms of goods and services.

The idea of legitimacy can be defined as the credibility of the asset’s value—the extent to which the value is backed. If the value is not backed by anyone or anything, then the asset has no legitimacy. If the value is observably backed (not hypothetically backed) by a guarantor or collateral, then the asset value has legitimacy. For the analysis, the credibility of the guarantor is irrelevant compared to the existence of a guarantor, and hypothetical scenarios are irrelevant compared to observable facts.

It is important to note that the value of money—the U.S. dollar—is in a higher class from stocks and Bitcoin. The USD is legal tender that is backed by the United States government, which can legally satisfy all debts and payments. This means, if you want to buy something, the vendors do not have the right to reject your money. On the other hand, vendors do not have to accept stocks or Bitcoin as payment, which is why you can’t take stocks to the grocery store to get food with it, and why public companies need to print stocks to get money.

GOOG: Non-Dividend Stocks:

Stock investors buy stocks because they want to make money, not value. The value of GOOG is defined as the amount of money shareholders expect to receive for their shares. However, the value GOOG has no legitimacy because Google does not pay the shareholders and the value is not backed by anyone or anything.

Stock investors can receive money from dividends or capital gains. Share buybacks are not returns to investors because most companies print additional shares (dilution) after the buyback and rescind what they paid. GOOG is a Ponzi asset. Google doesn’t pay dividend, so their shareholders don’t receive any money from the company. Google’s investors rely on capital gains. The only way they can get their money back is by selling their stocks to other investors—the Ponzi process. However, other investors are not obligated to buy GOOG from the current investors, so the monetary value of GOOG is not backed by other investors.

Stocks are also not backed by the underlying assets of the. If the value of GOOG were backed by Google’s assets, investors would know exactly how much their stock is backed by and when they would see that money. But in practice, we can clearly see that if someone buys a share of GOOG for $1,100 and it drops to $900, Google will not make up that $200 difference and Google has no obligations to pay anyone $900 for their shares either. 

The idea that stocks are backed by the underlying company is based on the hypothetical  scenario of when shareholders might receive something if the company liquidates. It is hypothetical because no one knows if anything will be left over after liquidation, and no one knows if or when companies like Google will liquidate.

In conclusion, GOOG shareholders want money, but they are not guaranteed any money from Google or other investors. Therefore, the monetary value of GOOG, which is also the only value for the asset, is not backed by anything. GOOG share have zero legitimate value.


There are two kinds of Bitcoin investors; the kind who wants to make money and the kind who wants the crypto currency for goods and services.

For bitcoin investors who want to make money, the situation is identical to the GOOG scenario. No one is obligated to buy Bitcoins from the coin holder, so the monetary value is not backed by anyone or anything, which means Bitcoin also has zero legitimate monetary value. 

However, the value of Bitcoin is not always monetary. Some investors want it for goods and services, and there are vendors who are willing to accept Bitcoin in exchange for goods and services. The existence of those vendors who are willing to take Bitcoin as payment gives a degree of legitimacy to the value of Bitcoin. But again, unlike the value of legal tender, which is a legally backed form of payment that must be accepted by all vendors, Bitcoin is not backed by law, and vendors can choose to stop accepting them as payment at any time. However, as long as there are vendors who accept Bitcoin as payment, then the value of Bitcoin has a degree of legitimacy that is not present in GOOG.


It turns out that Bitcoin has more legitimacy then GOOG. This is because GOOG only has a monetary value, but no one is obligated to pay the shareholders any money. On the other hand, Bitcoin has both a monetary and non-monetary value. The monetary value of Bitcoin isn’t backed by anything, but the non-monetary value of Bitcoin is backed by vendors who are willing to accept Bitcoin for goods or services. The existence of those vendors gives Bitcoin’s non-monetary value a degree of legitimacy, which means overall, Bitcoin has more legitimate value than GOOG.

It is possible to argue that in practice, there is more liquidity in the stock market and demand for GOOG, which makes the monetary value more legitimate than Bitcoin. That is true if we are considering the Ponzi Factor and speculative connections. However, this analysis is based on definitive legitimacy with defined guarantees, not uncertain liquidity—the likelihood of new investors entering the market with more money.

Lastly, this piece is not meant to promote Bitcoin as an investment instrument. It is a logical analysis that looks at the legitimate values, based on what the asset holders expect from Bitcoin and GOOG.