Topic: Why Bitcoin is Valuable? (Read 502 times)

Pals,

There is a great deal of confusion as to why Bitcoin has been exploding upward in value. You will hear a lot about a bubble, how it is unwarranted, and how Bitcoin has no inherent value. The problem with these statements is due to a clear lack of understanding of those making the statements.
 
Bitcoin’s value comes from simply from its utility. Here are a few ways in which Bitcoin and the other crypto-currencies will be used:
 
1)  A better store of wealth, as it is truly useful and amazingly frictionless
2)  Money remittance in style of Western Union with little comparative cost anywhere in the where both parties have a Bitcoin wallet
3)  An alternative monetization of internet content via a pay per view of cents model rather  than annual subscriptions or an ad based means
4)  A low cost notary and escrow services built into the code,  and low cost payment services that inevitably take market share from credit cards and online payment processes
 
Ultimately all crypto-currencies fulfill these uses, however, Bitcoin is the largest and most established.  It will continue to be the market leader for the foreseeable future if not ad infinitum.

Bitcoin is programmable money that allows the coding to do much of what professionals do today.  That is, notaries and escrow services become obsolete as Bitcoin has a the ability to provide both at a fraction of the cost through its public ledger, known as the block chain.   In addition, it is operated on a peer to peer network.  In that structure, you do not have a centralized entity that is operating for its own stakeholders well being, but rather many thousands of individual are competing for their own interest. The Bitcoin network allows the computer operators that secure the network to set their own price to process transactions, so the networks automatically defaults to the lowest cost node within the system.  It provides services at a incredibly small fraction of the cost as compared to the infrastructure widely in use today.

However, the most important aspect, is that it is global. 21 million units to be divided among the masses to better facilitate financial trans actions. There is no worry about the stability of the government backing the currency.  It is the first truly global currency, accepted every where. 2104 is going to see astounding growth and 2015 will be the year of Bitcoin. At that point, it will be ubiquitous and the growth will slow to a trickle.  It will have arrived at its mature state, useful for all things financial. Not just useful, but many fold more efficient than the legacy banking and money transfer infrastructure that it is to replace.

Think about this, Bitcoin is not even officially launched, it is still in beta testing, version 0.8.5. The value is based on the promise that Bitcoin has, and venture capital has been flowing into to build out the functionality of the protocol, much like in the early 1990s with the internet.  Prodigy, AOL, and other tried to make their own networks, but the public network that is the internet is what won.  Bitcoin will win this battle of finance, and the alt coins will tag along or perhaps become mildly successful supplements.

We have put together a fundamental analysis of cryptocurrencies and a step by step ” how to invest” if you would be inclined to do so below.  Since the market is so young, the alternative coins are unable to be traded against INR.  This presents a hoop to jump through.  What that also means, is that you are an extremely early adopter and when it becomes easy, you theoretically will win. 

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