Why Does Bitcoin Have Value?

Ryder

New member
It is a simple yet not easy question to answer: why does bitcoin have value?

Bitcoin has value because it has both scarcity and utility. It is a limited and useful resource. It is important to note that something must be BOTH in order to command a market value, NOT either.

Bitcoin is limited to the software-imposed hard limit of 21,000,000 bitcoin units ever in circulation. It is useful because it allows payment information to be secured by a decentralized computing network backed by magnitudes of raw hashing power. That raw hashing power is energy (electricity) converted into digital utility. Each transaction must compete (fee market) to be included in the next block of transactions which has a limited [block space] due to the block size limit (2MB) imposed on each ~10 minute block.

We can expect both the value to increase and the number of users to increase exponentially so long as the current technology maintains itself and remains both useful and in a limited abundance.

Bitcoin will always retain market value so long as miner nodes are actively contributing their hashing power to secure the network (proof of work).

Courses:


Literature:

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Bitcoin 101:
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Bitcoin Is Backed By Time Itself

Cashless Society:
Is Total Cashlessness Inevitable?
The Growing E-Dollar Culture
E-Banking Squeezing Out Personal Banking

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Diego

Member
It is a simple yet not easy question to answer: why does bitcoin have value?

Bitcoin has value because it has both scarcity and utility. It is a limited and useful resource. It is important to note that something must be BOTH in order to command a market value, NOT either.

Bitcoin is limited to the software-imposed hard limit of 21,000,000 bitcoin units ever in circulation. It is useful because it allows payment information to be secured by a decentralized computing network backed by magnitudes of raw hashing power. That raw hashing power is energy (electricity) converted into digital utility. Each transaction must compete (fee market) to be included in the next block of transactions which has a limited [block space] due to the block size limit (2MB) imposed on each ~10 minute block.

We can expect both the value to increase and the number of users to increase exponentially so long as the current technology maintains itself and remains both useful and in a limited abundance.
I think it has a value because people understand it, we can see how the engine was made and since it is a fair deal for all then people decide it has a value. The value is variable because is based on a market, but what we know is the value will never be zero
 

Cole

Member
It is a simple yet not easy question to answer: why does bitcoin have value?

Bitcoin has value because it has both scarcity and utility. It is a limited and useful resource. It is important to note that something must be BOTH in order to command a market value, NOT either.

Bitcoin is limited to the software-imposed hard limit of 21,000,000 bitcoin units ever in circulation. It is useful because it allows payment information to be secured by a decentralized computing network backed by magnitudes of raw hashing power. That raw hashing power is energy (electricity) converted into digital utility. Each transaction must compete (fee market) to be included in the next block of transactions which has a limited [block space] due to the block size limit (2MB) imposed on each ~10 minute block.

We can expect both the value to increase and the number of users to increase exponentially so long as the current technology maintains itself and remains both useful and in a limited abundance
I think it has a value because people understand it, we can see how the engine was made and since it is a fair deal for all then people decide it has a value. The value is variable because is based on a market, but what we know is the value will never be zero
The value will remain above zero as long as the network is still being secured by hash power (miners).
 

Maxwell

Member
Moreover, unlike Fiat which is minted out of thin air as the Govt wishes, for mining BTC you need to spend resources (proof of work) thus making it more valuable
 

Ivan

Member
I think it has a value because people understand it, we can see how the engine was made and since it is a fair deal for all then people decide it has a value. The value is variable because is based on a market, but what we know is the value will never be zero
I don't think so. I'm pretty sure that people who actually understand Bitcoin is only a small minority. All they need to know is that Bitcoin is decentralized, trust-less, unconfiscatable, and has a hard limit. I think knowing those characteristics alone will be enough for the typical non tech-savvy person to know that it's worth something
 

Kingston

Member
Yes Bitcoin has value despite high fluctuation in price.
Users can transfer digital assets in quick time and complete privacy. Anyone can be owner of this cryptocurrency. You need not to complete KYC for having bitcoin wallet. Bitcoin transfer fee is very very cheap. Transaction takes place without any border. This is just the beginning of crypto era. There are lots of surprise waiting on the market. If other cryptocurrency wants to dominate the market then bitcoin will still be accepted to buy sell crypto.
 

Juan

Member
Bitcoin needs fiat and fiat determines its value. Fiat acts as a fuel to Bitcoins value. Without fiat being pumped into Bitcoin it has no practical use or value. Considering other cryptocurrencies in the market Bitcoin does not perform well as payment processor. Without its Fiat value Bitcoin won't be accepted by any vendors online or offline.

Your analysis is bookish and does hold any practical stand
 

Ashton

Member
Bitcoin needs fiat and fiat determines its value. Fiat acts as a fuel to Bitcoins value. Without fiat being pumped into Bitcoin it has no practical use or value. Considering other cryptocurrencies in the market Bitcoin does not perform well as payment processor. Without its Fiat value Bitcoin won't be accepted by any vendors online or offline.

Your analysis is bookish and does hold any practical stand
You need to step out of the fiat bubble and enter the brave new world of digital cryptocurrencies
 

Kaiden

Member
Very valid scientific definition of bitcoin value system. what equally gives bitcoin value in a simplified language is that it requires a lot of work and complex mathematical computation to determine each next block before reward can be awarded to the miner who has the most complex block. In its utility, it has a huge advantage over fiat. It doesn't get decayed like the fiat, it can't be counterfeited, it takes less cost to keep and store unlike the traditional cash. One of the major breakthrough of the bitcoin value system is the total control it gives the owner of the coin, which is a proof-of-key. You are your own bank, no one helps you keep it and lend it out without you gaining when in a non-custodian private wallet
 

Giovanni

Member
Without its Fiat value Bitcoin won't be accepted by any vendors online or offline.
Says who? There is a merchant I buy from fairly regularly whom I (and several others) pay in bitcoin, who has told (and shown) me that he then uses that bitcoin to pay part of the salary of some of this staff members, and also to pay one of his suppliers. His employees which are paid partly in bitcoin are paid with a fixed amount of bitcoin, regardless of its fiat price. They earned relatively more in terms of fiat last June/July when the price was $13k, and they will earn relatively less currently in terms of fiat, but they always earned the same amount of bitcoin.

Bitcoin can function just fine without fiat. I earn a fixed amount of bitcoin from my signature and avatar, regardless of fiat price. I buy things from this merchant who pays his employees in a fixed amount of bitcoin, regardless of fiat price. There is no inherent need to convert to, or even think about, fiat when using bitcoin, unless you want to
 

Jesus

Member
Bitcoin’s value derives from its current real uses, mainly for money transfers and remittances. it's limited supply, scarcity, store of value, and its many potential uses. If you buy for day trading you may lose money, but if you hold long term, it has been proven you get a nice ROI. And bitcoin has barely started, think of the Internet/email in the '90s. A decentralized technology that has a valuable use it's not going to disappear, even if a few tyrannical governments try to ban it.
 
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