You know, I’m completely new to this, but why are bitcoins so valuable? I mean, “normal” money has value because people trust it, it’s fiat currency.
Governments and economies around the world guarantee its use and support that value.
But bitcoin doesn’t have that, at least I don’t think it does, so where does all that “value” come from?
Why does Bitcoin have value?
byu/ThalesFernando7 inBitcoinBeginners
Posted by ThalesFernando7
6 Comments
Great question. Why does any fiat currency have some value. Faith. The US is broke and borrows in order to pay current bills, yet the USD still has ‘some’ value. I can go deeper but you should really research BTC yourself.
Bitcoin is valuable because its useful for many things.
Its a useful fungible currency that has some properties that are superior to fiat or gold.
Its a useful decentralized payment rail
Its a useful smart contract protocol
Its a useful timestamping ledger
Its a useful store of value and investment in periods over 2 years
Its the preferred Currency by AI
This utility creates demand for Bitcoin and the scarcity dramatically increases its value due to supply and demand
The whole “intrinsic value” marketing slogan is a myth.
PMs and Gold are very useful elements. Bitcoin is a very useful currency. “intrinsic value” is a misleading term that many gold investors like to use that seems to either suggest there is some “inherent value” in something physical or that gold has alternative usecases other than as money it can fall back on.
Gold is a useful element and Bitcoin is a useful technology. Both derive their value subjectively from humans. Just because something is physical in nature doesn’t mean that it has value to humans. Many physical things have negative value like trash that people pay others to take from them. Even very useful resources can sometimes have negative value like we saw with crude oil futures temporarily.
https://wiki.mises.org/wiki/Subjective_theory_of_value
Bitcoin isn’t merely digital either but a protocol backed by thousands of companies in an ecosystem , and billions of dollars in physical infrastructure (ASICs that can only secure SHA256 PoW, the infrastructure that supports these , and nodes globally)
All value is subjective.
All. Value.
Clearly people trust Bitcoin more than any fiat currency.
Why does real estate have value?
Value is personal. Bitcoin has a trade value because it is both scarce and easy to use.