Topic: Why Does Bitcoin Have Value? - page 10. (Read 2851 times)

Perhaps you could apply this to fungible commodities like electricity or petrol, to a degree.

How how non-fungible goods? For example, you have filet mignon and I have a can of beans. We both won't starve tonight, but surely you wouldn't be willing to trade yours for mine. That's the subjectivity of value, and why the idea of supply and demand is so crucial to determining it. If one food tastes better, has more nutritional value, has perceived superiority -- and is much scarcer -- then it must be more valuable.

This is also a first mover advantage thing. People need something as a standard unit to measure value of anything, it used to be cattle, grain and gold, now fiat money has took that place. Once it took that place, its value become relatively stable automatically, since everything else's value is going to be counted by fiat money, this is pure psychological

Why does any currency has value? Whether it’s a fiat currency or crypto, it will be valuable as long as people buy and sell it, as long as it is interesting to them and they believe in and use it.

It is not the same, you can see that in panic, everything is dumped for fiat currency, because fiat money is considered as a standard unit of value, thus its value never changes. Although this is just an illusion ironed in everybody's mind, but it works quite well and almost everyone has become the slave of it

It is the same why does the fiat currency has value because today most of the people are using the fiat currency for making transaction and by the creator of the bitcoin he wants to make it more digital currency so all of the transactions today are we can do by the help of the internet world or the cyberspace now this is the most use transaction and they are now supported the conversion of fiat currency into cryptocurrency that you can convert your money into the digital world that you can now pay a lot of things through online without using physical money it has a value because it is the same like the fiat currency today.

I think the reason beside having bitcoin considered as currency is that bitcoin offers a unique way of making transactions. They use blockchain technology for that. Plus it has a hard cap which makes it a product thus giving its value.

I believe the people who truly/deeply understands Bitcoin is closer to zero, than the "small minority". The clueless includes me. Haha.

Ask what Bitcoin is to different people, and they will give you multiple different answers.

well enough reason to say that Bitcoin really has a value mate,but remember that since this market is volatile the possibilities that price may fall is always there but also chance of going high is there because the 21 million bitcoin limit is now more even lower because of forgotten password /private keys that has Bitcoin inside their wallets and ledgers.so all in all there are many arguments but literally?yeah Bitcoin has a value.

In economy books, they tell you that "value" is decided by supply and demand together. That is a too abstract and flexible definition

I took a more scientific approach that using energy to measure the value of one object: One object has value, because of mainly 2 reasons:

1. It contains useful energy that can be burned (like food, electricity or petroleum)
2. It can reduce your energy loss (like cloth or house that protect you from excessive energy loss in cold weather,  or computer to reduce the physical paper work)

Since all living things burns energy through metabolism and other activities, anything that satisfy these two criteriea can be regarded as having demand from living things, thus have some value basis, no matter how large the supply is

This theory contradict with traditional economy books, but I have observed this theory is more close to reality in some cases: Even with almost unlimited supply of food, no one dares to say that food is of no value: Human has a tendency to value things based on its energy content

From this view, bitcoin does not contain useful energy that can be burned, so its value must come from the second demand, that it can reduce the energy loss

What kind of energy loss that is reduced by using bitcoin?
1. Energy loss due to inflation (fiat money can be regarded as a store of energy, but it is constantly losing energy content)
2. Energy loss due to friction in international value transfer (due to the high fee now, this only applies to countries that have capital control, for example if you want to get large amount of money out of China)
3. Energy loss due to inefficient and unstable financial infrastructure (confiscate your money, freeze your account, haircut etc...)

More can be added

No, bitcoin value retains its usability and scarcity as you correctly point, even in the inevitable diminishing of hashrate once mining stops becoming profitable, which is a point we are approaching with every passing day.

This doesn't make the network weak, because there are less miners because it has become too expensive for the benefit, so its still to expensive to attack, even with less miners. There will ALWAYS be miners, just not so many since the for profit ones will be gone. This moment is not too far away, sure the current price is temporary, but letter even with higher bitcoin price, the mining activity won't be able to pay for itself anymore. So the last miners will be those hobbysts, enthusiasts or people that somehow have "free" electricity (ie. renewable sources).

If you were expecting significant profits from transaction fees, LN came to get rid of that. Everyone can just stick to 1 sat/B txs and maybe use LN for anything else. The only reason you sometimes see fees spikes, its because people still blind trust their wallets to pick the "best" transaction fee. This is NOT Bitcoin doing it, its your stupid wallet. So don't let it, set it up manually and don't bother for insta-payments unless you want to do LN or an emergency makes you use a higher fee.

Bitcoin has value because miners have to buy equipments, pay for energy to mine it.
Bitcoin supply is limited at 21M, people invest in Bitcoin because it has many features that fiat don't has and they hope the price woud increase.

Why bitcoin has value is not hard to answer. Not that it is like price that we don't know what could happen but because of what has happened before.
Bitcoin has value because:

1. It was the first digital curecies that uses blockchain technology
2. The bitcoin halving that make the price to rise in 2012 make people to see it asva way to invest.
3. Later, some people are holding it because of long term process for fiat foreign transactions.
4. More people are getting to know it and embrace it as well because they see it as a way to make money.

This is how bitcoin become more adopted and popular and this makes bitcoin to rise from zero value to something and to what it is today.

I agree with a statement that bitcoin has value because of its monetary properties.

Bitcoin has everything we require from money. The main thing is of course bitcoin's scarcity so we always certain that our money won't debase due to inflation. This was one of the main reasons why gold became such a good asset, it surpassed all other types of money.

Gold has credible monetary properties, but it is not for digital era, which in need of transactions via internet. Bitcoin solved that issue, because it has both credible monetary properties and digital nature. That is why it has value. It is merely best money.

Bitcoin fundamentals are not just scarcity and utility but the evolved technology, community and the network, as well a the established methods of this evolution. It is nearly impossible to duplicate this evolution of miner infrastructure, community support AND decentralized decision-making. The fact that bitcoin is here is here to stay.

The next fundamental that all the "business" people cry about is "utility on blockchain". This is where success of LN becomes all the more important. If the LN infrastructure gets going, it'll mean that the tech has matured to a level where a layer-2 utility can use the security of base layer. The use there-on is limited only by the acceptance of bitcoin's advantages by the people and developers. Instead of hating on each other, people can just accept bitcoin as it is and work with it instead of against it.

I will say, we are the one who giving value to bitcoin. Bitcoin  valuable because of its strong community. You know when bitcoin was created then it was zero value, it was just a code. When people realized the use of this codes and what would be the benefits of it then they become interested on this peer to peer decentralized electronic cash system called bitcoin blockchain. And that's how community start build up, in a result bitcoin become most valuable worldwide. So it will expand more day by day and it will not ended. That's why bitcoin value totally depends on its community.

By this logic, anything fiat 'related' could be considered the same thing as Bitcoin, "no value or practical use". Gold, bonds, mutual funds, etc.

Fiat are just a unit of exchange, in this case, the same as BTC when it was used in trading pairs. Remember that a guy buys pizza with bitcoin in the past when there's no 'fiat injected to pump it'.

At this moment, it's probably not possible to expect any valuation fully expressed on Bitcoin from merchants, but that does not mean it's impossible.

Majority of Bitcoin's value comes from speculation rather than fundamentals (scarcity and utility), we can see it by how much the price moves without any change in fundamentals at all. And it makes Bitcoin really unpredictable, it's almost impossible to make any educated guess for where the price is going, maybe we'll see $100,000 or maybe $100, maybe even both - who knows.


Why? People so often make these "moon" predictions without any proof that the growth will indeed be exponential. Drawing parallels with adoption of other technologies doesn't actually prove that Bitcoin will repeat their history.

More specifically, I see "utility" as network effect, or network value. Bitcoins can only have value if other people accept and value them. Many people use Metcalfe's law as a model for Bitcoin's network effect and value.


Bitcoin adoption is a free market process. There is no guarantee of exponentially increasing adoption.

I think the guy on the video had answered the wrong question. The title and topic was supposed to be about why Bitcoin has value but proceeded to answer why Bitcoin is valuable which is a different thing. He did mentioned it at around 0:21 of the video when he said that "in a nutshell Bitcoin is valuable because...." so the bottomline is he didn't even answer the question to his own topic. It is really obvious when he did proceed to stray away from talking about the economic side of Bitcoin and proceed to talk about the features and why it is "better" compared to fiat currencies.

The best answer about this can be given by a miner, the one who gives birth to new coins every single time a new block is found. The energy and electricity consumed by a mining machine is not less than what a mother collects inside her in order to push her baby out, just go and ask that mother what's the worth of that baby to her. She'll say, "Priceless". So, don't just look for a few aspects about BTC while considering it to have a value as it'll take years for you to understand what exactly is behind it that BTC has tethered all of us who never even knew each other during our lives.