Topic: Why does bitcoin have value? - page 5. (Read 2227 times)

HOw can be sure that value, will last longer? I hope bitcoin will increase the value time to time. hehe Because I have a bitcoin that I hold for already two months. I am waiting for the great value. =D

At first place I also wonder why, but the more i become engage to this I know why it has value and it is so high.

Why does Bitcoin have any value?
Although cryptocurrency has become a household topic in 2017, what most households don’t understand is — why does cryptocurrency, such as Bitcoin, have any value? (Many actually think crypto has no value at all. But when you ask them why, they couldn’t answer because they have never really thought it through.)

In order to answer this question, we have to ask another fundamental one — where did currency come from?

In the early state of society, the value of a good or service was determined by the amount of labor required to produce it, and then the need for exchange of goods and services bred currency. For example, Bob spent a year to raise a cow and it took Alice the similar amount of labor to raise three lambs. Alice wants to buy cow so she exchanged Bob’s cow with three lambs. However, using livestock as a medium of exchange (barter) was very inconvenient so some people started to use gold instead. When gold was widely accepted as the medium of exchange, it became a currency. You may wonder, did gold come out of thin air and was abruptly assigned a value? Of courses not. Some people spent a lot of time and resources to mine gold so there was labor behind supporting its value. (The situation is more complicated under modern economy where owners of capital are compensated by profit, but we can skip it for now).

If you believe in this theory, then bitcoin has value. Simply put, some people are spending time and resources to build a transaction system, and get compensated with bitcoin. Just like gold miners expend resources to dig gold. So, rather than coming out of nothing, bitcoin is produced by labor through the blockchain building process.

I know another question comes to you mind — why do we have to use cryptocurrency instead of dollar? Cryptocurrency cannot gain value just because it requires labor to produce it. You can spend time and resources to produce something that is of no value at all, a stone spear for instance, because it is useful to no one. You are absolutely correct based on the subjective theory of value — value of a good is determined by our desire for it. However, you will also realize that cryptocurrency has value because it has great use cases and it is better than dollar as a medium of exchange.

Gold and silver are considered as commodity money since they have intrinsic value. Dollar during time of gold standard has intrinsic value too because one dollar was pegged to 1.61 grams of gold. Therefore, governments could not issue as many dollars as they want because gold is limited. However, gold standard doesn’t exist anymore. What we use today are fiat currencies which are intrinsically valueless. They are used as medium of exchange purely because of government decree. Is this something you should worry about? Yes. We trust dollar for now because we trust US governments’ creditability, the economic health of the country and the stability of dollar’s purchase power. If these conditions no longer held (like Zimbabwe or the U.S. during financial crisis), fiat currencies can depreciate rapidly.

Unlike gold or dollar bills, cryptocurrency are not tangible, making some people feel unsecure. However, they are actually more secured than fiat currencies once you understand the mechanism behind.

Cryptocurrency have several advantages over fiat currencies. 1) They usually are capped in quantity (e.g., there are at maximum 21 million bitcoins). Similar to gold standard system, it prevents hyper-inflation due to excessive issue of currencies. 2) Cryptocurrency cannot be forged because it is secured by cryptography. 3) The transactions costs are lower because no middlemen, like banks, are required any more. In the extreme, even if all governments and banks collapsed, cryptocurrency, living in blockchain, can last forever.

Currency is just a collective agreement. If enough people reach a consensus, what they agree upon becomes unimportant. We can use different languages to describe the same object; similarly, the choice of medium of exchange is flexible too. It can be livestock, cowrie, gold, note or simply a code. It took thousands of years to transition from barter to coinage, 400 years to transition from coinage to paper money and 50 years to transition from paper money to plastic card. This time, it may take only 15–20 years to make cryptocurrency widely accepted.

Anything that is allowable to use as payment has value and that's why bitcoin is one of them. It could be use in many transactions and supported by many influencing people. It has gained the users that it needs and up to now it's getting the demand so it means that it is valuable. The most important thing about the value of bitcoin is the benefits and helps that it's providing.

I think the main reason why bitcoin have a value it is because of the community users plus the investors are willing to invest of some projects that is why bitcoin was so popular until now in the whole world and the price goes up.

I agree to this, bitcoin users is also used to it. I mean, they know all the things about the bitcoin why it has a big value. For me, everyone knows that bitcoin only has its value because of the investors. If bitcoin community has no investors. where did they get the value of bitcoin? right?

From that desire raises the difference between demand and supply. Furthermore, economic law is enacted, supported by constructive news. So when there is good news usually increase the number of requests, so the price will likely rise, so vice versa.

The value of anything is determined by its usefulness, in all fields, forms and purposes. In the economy, cryptocurrency works mainly in the digital market in transactions and investment trades. It is very valuable because it gathers people to form a community and an industry full of different jobs from mining to campaigns and investing.

Bitcoin has value because people are buying and selling others treat bitcoin as investment others also use bitcoin so that they can trade other crypto.

Bitcoin has value only as long as people believe in it! And people believe and buy coins, because I think that this will make them richer, many do not even think about the future development of the crypto currency as a technology!

Bitcoins are used for trading like fiat currencies bitcoins are used a mode of payment and what gives bitcoins its value is the economic principle of the supply and demand of bitcoins as there only a limited number of supply of around 21 million bitcoins in out of that around 14 million bitcoins have already been mined to finish the whole mining it will take more than a century as after every four there is halving which means after every four years the level of difficulty on mining keeps on increasing but still the demand is high for bitcoins which causes for the rise in the price of bitcoins.

Bitcoin has valued a lot because of people. We continuesly using it and we made bitcoin a valuable cyber money. It's like supply and demand thing.

You are absolutely right & i agree with your opinion.

because the king bitcoin of all coin. bitcoin is also easy to get in every market in cryiptocurrency world. because bitcoin duty serves the exchange of all coins. therefore bitcoin is very valuable if compared with other coin .

The main feature is limited release. Second one is decentralization. The third one is confession from geeks and growing popularity among average users.

The bitcoin value relies on social construct, i.e. we all believe in that it can become the medium of exchange and value store, the amount of investors, miners all making the system secure and valuable. The technical feature makes this possible, but another project can fork bitcoin and have the same features but will never reach the same level of value consensus as bitcoin. It may not even have enough mining power to secure itself e.g. the BTG 51% hack. Bitcoin is the first one and the one that has accumulated most trust and value consensus than any other crypto, and may never be surpassed.

bitcoin has a very high price because bitcoin has a very limited supply and bitcoin has a very high demand that makes bitcoin expensive. and bitcoin will always be worth.

bitcoin that can indeed be used as an investment medium, because investing according to them more profitable than others, not only investment luck, buy also profitable. because basically we are looking for profit.

Anything have value if somebody is willing to buy
I think that the most people see bitcoin as kind of investment and buying with hope to make profit in the long term.

All of the things that OP mentioned is true. But what simply explains this is that, anything that has a demand in ghe market will surely have a value or price. Bitcoin is having a higher market value than other cryptos because of its large community of users that generates high demand in the market. Since Bigxoin is now getting more popular, we could expect that its market price will be more expensive in the future.