What Gives Bitcoin Value?

[DERCRAFT]

 

2 minutes ago, DERCRAFT said:

American economist Paul recently asked around a question that matters for bitcoins in financial units, and what is it for, but why can their value be equal to the US dollar, a thousand dollars or even a million? In his study, “Bitcoin is Evil,” Krugman wrote: “... when I ask you to explain to me why bitcoins have reliable value, they always tell me what is an excellent source of exchange.” Even if I buy bitcoins, this will not solve my problem. These are completely different questions. Coinbase's spokesman, Fred Ersam, wrote in response to a complex article that outlines the arguments used to prove that bitcoins are a valuable asset. Most often called the fact that bitcoins have amazing transaction capabilities. The article is called “Bitcoin is Good.” “Currently, the value of bitcoins as a currency can be calculated by summing up the money saved using the Bitcoin payment system, and not other types of payment. If one bitcoin is used for 10 transactions per year with a conditional value of $ 100, a bitcoin network is 3 percent cheaper than any other alternative. The cost of this battle rises to $ 300. Bitcoins do not even need to replace the local currency. This is not a completely satisfactory answer. To trade something valuable, you need. Because of their effectiveness in trade, it’s a vicious cycle. Consider this example: if he uses only bitcoins, then it is not important to him. It can be either 1 dollar per coin, or 10 thousand. He pays $ 100 and gets the same amount. Identically, other parameters do not affect the value of one bitcoin. So what do bitcoins get from? In the first year of operation, the systems were practically not completed, and people spent their energy on accumulating bitcoins. These can be only two possible reasons: 1. Rare metals, stones, shells, stamps, paintings and baseball cards are collected. 2. The value based on the fact that you want to buy, enrich thereby the previous owner. Gold is valuable precisely for these reasons. This is because it is rare, durable, mobile and affordable to collect. It can only increase its value in direct proportion to the number of people who want to receive it. When a collector gains value, he can become money. You can take advantage of their superior financial transaction system. This system remains the same, regardless of how many people participate in it. Responsibility for the value that people invest in bitcoins. The parties acknowledge that Bitcoin depends on the number of these supporters. They all try to rely on the technical features of the system, but they cannot measure how deep their faith is. Each of us personally decides. Fred Wilson, for example, is very fond of the Bitcoin system. Some people invest money, do not understand what bitcoins are. They are only attracted to what sounds cool. This would determine the real value of bitcoins. In addition, there is a need to justify the use of bitcoins. something valuable to people. The frequency of circulation does not depend on the total supply of currency. Bitcoins are often traded only because there is such an opportunity. Gold is not often sold, but much more appreciated. For more information on collectibles and the early history of money, read Nick Shabo's excellent article. To summarize, I must say that bitcoins are valuable as collectibles. Their reliability as “custodians of values” depends on the number of people who use them. Bitcoin, the more people will trust this payment system. that there is such an opportunity. Gold is not often sold, but much more appreciated. For more information on collectibles and the early history of money, read Nick Shabo's excellent article. To summarize, I must say that bitcoins are valuable as collectibles. Their reliability as “custodians of values” depends on the number of people who use them. Bitcoin, the more people will trust this payment system. that there is such an opportunity. Gold is not often sold, but much more appreciated. For more information on collectibles and the early history of money, read Nick Shabo's excellent article. To summarize, I must say that bitcoins are valuable as collectibles. Their reliability as “custodians of values” depends on the number of people who use them. Bitcoin, the more people will trust this payment system. who use them. Bitcoin, the more people will trust this payment system. who use them. Bitcoin, the more people will trust this payment system.

 

[philosophy]

I fully agree with many people here that Bitcoin costs so much only because of the historical fact that the first cryptocurrency was formed. It is also possible that its growth is being secretly stimulated by someone so that we may not even know it.

[schturman]

On 8/24/2019 at 2:48 AM, nuroxx02 said:

 

In the digital age, the ideal brand new currency should have at least these three characteristics:

1:   It should be free from the control of any authority so that it cannot be manipulated and printed at will (and devalued), and nobody can tell anyone what they can and cannot use it for.

2:   The currency should be borderless, so that it can be easily exchanged across any location with anyone.

3:   It should be apolitical, so as to not favor a specific system or group of people. In a nutshell, these (among many others) are the characteristics of bitcoin, which looks like an appealing alternative to any fiat-based monetary system.

You correctly identified exactly the nominal merits, and not the material qualities of bitcoin. To these nominal characteristics, I would add decentralization (although this is combined with your first point), P2P interaction, open source technology, the ability to circumvent any sanctions.

[Germaniv]

Growth in trading volume and increase in the number of trading positions in December 2018 indicated that the market touched the bottom - $3.2 thousand on December 15. The Bitcoin price reached its lowest point and the uptrend resumed.

In addition, the volume of trading increased significantly, which led to increased volatility. These factors are likely to lead to a significant increase in buyers, which, in turn, will contribute to a rise in the price of Bitcoin.

[ivan19911991]

To be honest. The only thing that gives bitcoin a value is the HYPE

[iamsheikhadil]

On 8/24/2019 at 7:45 PM, Thepug said:

The main thing that gives any crypto a price, is the supply and demand for it.

By definition, a market is a place where buyers and sellers come together to exchange a good or a service. In this situation, Bitcoin is the good that is in the so called “market”. 

Then, you can analyse the supply of bitcoin. Bitcoin isn’t easy to get, if you don’t have the correct equipment to generate one. It takes a lot of energy and it is very risky for investors to generate their crypto, because of the uncertainties in it. This means that the supply of bitcoin is going to be lower than other currencies.

When comparing 1 BTC to 1 USD, one bitcoin is worth around 10,000 times the price of one USD. This is the result of United States Dollars costing just less than $1 to make. However, 1 BTC can take thousands of dollars to mine, already inflating its price about the dollar.

Then, you can analyse the demand of bitcoin. Bitcoin has become more popular with online purchases because of how easy it is. You simply have to create your own wallet and send the bitcoin to another person’s wallet. This means then that it is a universal currency and people don’t have to worry about exchange rates when trading it.

For example, if someone buys an item off the black market online, it is most likely that they use bitcoin to complete their purchase.  Online, people don’t want to ask others for a currency from a country that isn’t theirs. It is easier for them to trade with bitcoin, sell that bitcoin for their own currency and they won’t be tracked.

This gives a low supply of bitcoin, with a high demand. Therefore, the price level equilibrium is going to be high up. This is the cause of the artificially high price.

Along with that the price of electricity determining it. I wonder if the costs of mining become less, it would not consider any demand or growth and btc price will plummet as a waterfall like if solar energy is used to mine btc!

[nightfall91]

 

one of the first currencies that they wanted to greatly promote

[Clon777]

 

Bitcoin's value has its own unique features and challenges. While the network is relatively small, the entry and exit of each new group of participants can cause serious price fluctuations, resulting in huge profits for earlier participants.

 

Bitcoins are valuable as collectibles. Their reliability as “custodians of value” depends on the number of people who use them. The more people believe in the seriousness of Bitcoin, the more people will increase their confidence in this payment system.

[Seoulmate]

First understand that price and value, are two different things.

Bitcoin won't have much of an effect on your life, if you are fortunate enough to have a bank account.

• If you want to know the value of Bitcoin, ask the billions of people worldwide who are trapped in poverty because they are excluded from basic financial services.
• Ask them if they have access to capital, liquidity, credit, or investment opportunities.
• Ask them if  they have confidence that their own governments and state institutions wont steal or devalue their life savings overnight.

Bitcoin has value to billions of people because it is an open, border-less, transparent, neutral, censorship resistant, verifiable, and private form of money. It doesn't discriminate, it is open to all. It gives opportunity to billions of people worldwide so that they can escape poverty and ultimately build a better life for themselves and their children.

That is where I see the value of Bitcoin.

[wry]

Krugman has hated Bitcoin for a long time.  Most mainstream economists do.  It's private money and threatens everything they think they know.

Bitcoin's value derives from the censorship resistant network that uses it.  Nobody can shut the network down and keep you from using the value of your bitcoins.  It's essentially private money that is free from any single nation state.  Nations can keep people from exchanging bitcoin into their national currencies, but they can't stop bitcoin.

It also helps that there's only going to be 21 million bitcoins ever.  Even gold doesn't have a hard cap like Bitcoin does.

Bitcoin has value relative to other crypto because of the infrastructure that has built up around it.  Companies like Coinbase and BitPay and even Stake have done a lot for it!

[Clon777]

 

 

Just as the value of a shovel is derived from its ability to dig, so the value of a currency is based on two factors: the ability to turn and save