Topic: what gives Bitcoin it value? (Read 519 times)

At the end of the day, the value of cryptocurrencies and fiat currencies comes from “trust.”

The total supply of 21 million bitcoins will be fully mined in 2140 and we cannot generate another bitcoin. But so far some bitcoins have been lost because some users have lost their private keys, and those bitcoins actually never came back. So the total supply of bitcoin has decreased significantly.
Bitcoin is not like gold. The amount of gold is estimated to be 60 trillion tons in the earth's crust and we have only extracted more than 190 thousand tons of gold. If bitcoin really becomes legal worldwide, I really can't imagine how high its value will be.

I agree that the limitation of BTC gives it value because it obviously makes it a totally deflationary economy, in addition to the fact that if we go to the price it is currently given merely by market speculation, institutional investments have arrived in an impressive way, the whales are also a guarantee of giving value to BTC, however, there may be rivalry between bear whales and bull whales, which, both need the market, however the best of all is that the BTC market obeys the law of Supply and Demand, I think qeu all this is of greater guarantee and support than the same FIAT money.

Right, people value fiat currency only because they trust the government that issued it. If it weren't the case, fiat currency would be no better than pieces of painted paper that have no real purchasing power. Bitcoin is totally different, it doesn't require trust in issuers, every characteristic bitcoin possesses can be independently observed and verified without people having to coerce others to believe in it. Although bitcoin is of digital nature, it doesn't mean it doesn't exist, and it doesn't mean it is not real. It is very real like any other software that is installed on your PC or any digital photo that you take while on a trip. Can you say that pictures on your phone aren't real and that they only become real once printed on paper? I doubt it. You value the photos on your phone for many reasons, but other people could have a different view: they won't value pictures of your family, for instance. Bitcoin is money that can be exchanged for real goods and services, many people value bitcoin for that because they know: as bitcoin matures, more and more people will recognize it as a currency, more and more people will understand why the characteristics of bitcoin make it a better form of money, all of that will likely result in even more purchasing power and more value.

The strength of the community is indeed very important to support bitcoin to exist and continue to be used. Bitcoin is a valuable digital asset today. In addition to public trust in bitcoin, bitcoin also has a limited supply, so the more often it is mined, the less bitcoin supply will be. The total supply of 21m cannot be increased or decreased, so once bitcoins are fully mined, bitcoins will be scarcer and prices will be higher. the future of bitcoin is still long and this is still the beginning for bitcoin and the world of cryptocurrencies.

You are right indecencies that Bitcoin is decentralized, assuming Bitcoin is centralized the regulation would have been shambled because of physical manipulation would have become obvious for it regulations and speculation, Bitcoin is a digital currency like Gold but it's value is differ from other digital currencies, and from my perspective another thing that made Bitcoin unique or different is the length of it's market structural rotations.

all of us. so simple

produce actually does have a cost and underlying value below the market price.... but you have to separate the VALUE vs the price
lets call VALUE=whole sale COST. and lets call PRICE=COST+profit (profit= speculative volatility above value)
now take 2 lines
                   /\
PRICE__/\/   \/\
                              \/\/\__
                       _______
value_____------

value is below price. but you never see the value on a market price ticket. .. its hidden..
value moves up slowly and incrementally below the volatile and speculative price.

the PRICE is above the value. but the PRICE can move up and down depending on many factors. but if a business is actually money savvi will never sell at a loss.. because thats just bad business

but thats if you can understand the difference between the hidden underlying value vs the speculative price

EG say a dairy farm can milk a cow for a gallon of milk for $0.72.
its not going to sell that milk for less then $0.72
so it sells milk in bulk at say $1.15cents to a pasteurising factory(60% profit)

pasteurising factory gets a gallon of milk for $1.15cent. plus 6cent delivery to its factory
it then has 20cent cost to heat it and then bottle it ($1.41cents)
its not going to sell that milk for less then $1.41cents
so it sells milk in bulk at say $2.25cents to a supermarket(60% profit)

so the supermarket sells milk at say $3.60cents to a customer(60% profit)

you may not realise that the supermarket had a value/cost and the factory and the farm had a value/cost hidden away .. but they do.. all businesses know this and understand this. .. i know you only see the retail price of milk and think thats VALUE..  but no thats market PRICE

the value of milk to a farmer is bottomline $0.72cent-$1.15
the value of milk to a factory is bottomline $1.41cent-$2.25
the value of milk to a market is bottomline $2.25cent-$3.60

yes someone living near a farm can avoid the super MARKET PRICE and acquire milk UN-pasteurised from the farmer for $1.15
but its unpasteurised so its features and benefits may not be worth the discount(bacteria milk, yuck). so it might be able to slip $2.25 to a factory employee and thus get pasteurised milk cheaper than supermarket PRICES

so in that scenario that lucky person values milk at $2.25 because thats the cheapest he can get what he wants.
(much like some whales can get BTC at whole sale O-T-C prices(below market PRICE rate))

the base line value where no one on the planet can get milk anywhere on the planet cheaper than $0.72 is where milks very bottomline value of $0.72

but no one will want to go start a farm to get milk for $0.72 as there is alot of work and effort for bacteria milk
people would prefer to set up a factory for minimum $1.41 cost. or if still more work, buy for convenience cost of $2.25-$3.60 depending on access, meaning majority of the community value milk between $1.41-$3.60
where by the price they pay is somewhere in that range dependant on access, convenience

there are places on the planet where it costs a farmer over $3.60 a gallon.. but that farmer doesnt farm. he just buys milk cheaper.
..
there is alot more happening in regards to "produce value" then just the supermarket PRICE you see
do you really think that the accountants/ financial department of a supermarket just has a hat full of random numbers from $0 to $3.60 and just picks a number at random.. truth is they know the minimum number.. and it sure as hell isnt $0


with bitcoin the cheapest and most expensive mining cost is ~$33k-$78k at todays hashrate
the price sits somewhere inbetween depending on many factors
EG because it costs $78k to mine in places like bermuda, japan, germany (high electric cost) they are not mining right now. they prefer to buy
EG because it costs $44k to mine at home(residential electric cost) in america they are not mining right now. they prefer to buy
EG mining in kazahkstan is $33k so they are happy to be a mining farm and sell for profit.

bitcoins bottomline value is $33k not $0
milks bottomline value is ~$1.41 not $0

Bitcoin is valuable, because it helps you transact in another way. The protocol is designed to transfer value between two participants as long as they both evaluate it. If both consider it money, it can gain monetary value.

This is false. The supply does not affect the people's demand. Also, the supply is inflated steadily. It doesn't change accordingly to the demand and in fact, it's the only asset that has this feature.

It does not work like that. You cannot say that a thing has value just because you think it has a value but other people should agree with it first. BTC has a value not because we think it is valuable but it is really valuable because of its real world application. I do not need to explain if what are those use cases because you already list above.

Just because fiat inflates I do not think people are now going to trust their money with bitcoin because lets not forget that there are still risk with bitcoin. From its value that are not stable, it is also hard to catch the criminal if we got hacked or scammed. Pensions and savings are funds that needs to be secure for your future and not to gamble by investing into highly volatile thing like probably not in all 100% but in less percentage.

The technology behind Bitcoin gives its value. Bitcoin is a proof of work, a mineable coin  but it is unique and very different than many shit proof of work coins. If you spend inputs (power, mining rigs, ventilation, other things for mining farm infrastructures) into shit mineable coins, you might lose all money because technology behind is not great. They just copy and paste coins so that they can not compare to Bitcoin. The community behind Bitcoin is big and developers are top notch, not bottom level so that they develop Bitcoin better.

Shit coins can clone source code of Bitcoin but what's next after initial clone? Clone next times whenever Bitcoin has upgrades? No value from such clones.

bitcoin has values(utility/philosophical reasons)
bitcoin has value(economic/acquisition cost reasons)

if you imagine that everyone on the planet. no matter their method of acquisition (trade, barter, exchange, mining) cannot get bitcoin any cheaper than ~$37k, this $37k is the bottomline VALUE

the volatile PRICE above this bottom line is the whimsy/speculative values(reasons for desire/utility/philosophical) where people decide how much its worth to them personally/individually. which can change region to region

the price is not "value"(bottomline economic value) its the speculation due to 'values'

its not a simple highschool economics of 'demand and supply'
because

even if there is say $400,000 fiat and 10btc deposited into an exchange. (fiat=demand, btc= supply)
the market does not instantaneous become $40k/btc.
instead that $400k could be 1000 people with $400 each and 5people with 2btc each
where by the 2 people selling 5btc each. may have the same supply. but may have lots of different idea's of 'values' they allot to their supply
EG they both know its worth more then $37k/btc value to them. but one might want to sell only 0.01 allotments at $400 to avoid a crash by only catering to each buyer 1 by 1. because he has mane reasons for different values(reasons)
where as the other seller just wants to get rid of his coin in one drop... where he see less values and just wants to get out taking atleast, but hopefully more than the value(economic min)
conclusion: same supply. same demand.. but causes different market actions
OR
EG they both know its worth more then $37k value. but one might want to sell 0.01 at $400, 0.00999 at $400, 0.00998 at $400 to cater to each buyer 1 by 1 thus causing a price rise slowly by $4/btc per order
where as the other seller just wants to just put coins on an order line at $42k and wait it out
conclusion: same supply. same demand.. but causes different market actions

the 'supply' is the same. the 'demand' is the same. (same 10coin same $400k fiat deposits) but the market conditions are different

Op is write from the aspect that he is going. He said that it is demand and supply that give bitcoin value. You should instead say that bitcoin was built on scarcity model. Because, everything that has value we see today is because there is demand for it. Anything that doesn't have demand will not dominate.
Bitcoin has value because people believe in the security of bitcoin,  that is PoS protocol.
Also because of the liberty to use your money pseudonymously is another big reason. Some people don't like third party in their private life. Even the miners incentive is one of the value drivers of bitcoin. So bitcoin is totally value driven.

Trust Minimization and Censorship resistance with decentralize gives it value.

https://www.youtube.com/watch?v=psZwNF6OcXQ

Bitcoin is said to be a great long-term investment tool because in recent years bitcoin has experienced a rapid increase and is able to make the world go into an uproar with the achievement of bitcoin prices that continue to rise. The more bitcoins are mined the less the number of bitcoins that can be mined is that there are only 21 million Bitcoins available. according to predictions all will be successfully mined until the year 2140 and it is still a very long time.
at that time bitcoin will experience scarcity and will certainly be a rare digital asset.

All things not just bitcoin, their value comes from demand. The higher the demand, the higher the bitcoin value will be. Besides the scarcity of supply, the demand for owning bitcoin is increasing because of the utility and breakthrough technology that bitcoin brings to today's society. Convenient, easy to store and can pay, transfer money anywhere without going through any other 3rd party.

I think you are wrong. The true value of Bitcoin does not come from demand. The price of Bitcoin may come from demand. But ultimately Bitcoin's value goes deeper than demand.

You may ask, in the first place, why the rising demand? Or perhaps, why is there a demand to begin with? The answer to these questions gives you the value of Bitcoin. Bitcoin is a decentralized peer-to-peer digital currency. But that's not all. It is also limited in supply. It is also trustless. And more.

its not based on some popularity social drama gossip decision..  nor based on some campfire community agreement of price.

there is a baseline value due to real cost of acquiring it (mining). then above that base value is the speculative hype social decision stuff based on many sentiment, regional influences and different factors

some of the other posters try to also suggest paper fiat has no bases. well yes fiat paper is not worth the value its printed on. but the value is derived from laws such as minimum wage and tax.
EG if min wage is $10. then a $10 bank note is worth an hours labour of the poorest person working

There are too many factors for that and not only by popularity Bitcoin price will increase.
No one forgets the most valuable stuff in the crypto world, others forget their asset but they store their crypto-asset for storing value and hoping that someday it will become the most expensive assets make a profit on it.

The main factor is the limited supply of Bitcoin, which means it will make the price move by the demand and supply.  We know that every year Bitcoin has raised awareness and now becomes globally known and some are accepted Bitcoin as a legal tender.  So people or a community like us was the reason that Bitcoin has value.

As long demand is there then you could really expect something like this on which value could really soar up that high and this is why most people do really see the potential on holding it for long term.

If we do try to compare the situation 10 years ago then we could really conclude out that there's so much potential for this coin.It had started on having no value or near to none but

the community do make out that recognition until we do reach out these all time highs.