Anyone care to fill me up with some ammo for the typical question.. "what give bitcoin value" or "what gives all this digital money any value, I mean we know the US dollar is backed by something.."
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Anyone care to fill me up with some ammo for the typical question.. "what give bitcoin value" or "what gives all this digital money any value, I mean we know the US dollar is backed by something.."
Here's a quick list from the what gives Bitcoin value section of our LeoFinance guide to Bitcoin:
Most of which are the same as those giving value to fiat currencies, or at least what we perceive to be giving them value.
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The angle this person is coming from is: what is it backed by
"The largest, most decentralised computer network in the world."
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Bitcoin is backed by technology and this ^
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Bitcoin is famous for its fixed MAX supply of 21 million BTC. For years no one cared, but once people started to care it was off to the races for Bitcoin.
Many people see Bitcoin as money outside the central banking system, and they see it as a viable alternative to fiat currencies. Neither fiat currencies not cryptocurrencies are backed by anything, but people have more trust in crypto than in fiat currencies.
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In a way. There are still a great many people that trust the security of some fiat currencies, especially the US dollar which is currently the most widely accepted token of exchange.
The volitivity of cryptocurrencies still make it difficult to use as a way to use in purchases with the exception of stable coins.
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Given the nature of fiat currencies, USD reigns supreme among them, even more so than GBP, EUR, and CHF. One day it's value will reach its intrinsic value (zero), but all others will fall first. USD will be Last Man Standing, so to speak.
Extreme volatility of cryptocurrencies is the major stumbling block for acceptance by the public. Then again, that's because they are being measured against fiat currencies. Without fiat currencies, 1 BTC equals 1 BTC, 1 DOGE equals 1 DOGE, and 1 HIVE equals 1 HIVE.
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IMO: Governmemt issued Fiat currency is backed by a centralized authority who has an arbitrary power to act and implement at a whim without any input from the population. And effects these changes by the threat of force.
Cryptocurrency is backed by code, encryption, a public ledger, the network effect, the free market, and people's free choice. And if your lucky and find a place like hive, it is also backed by development and use case.
That why "fiat" is part of the phrases "fiat money" and "fiat currencies": Money forced on the people by the rulers.
Just as important regarding cryptocurrency, it's backed by trust. Even with all the pump-and-dumpers out there and all the rug pulls taking place, cryptocurrency has more trust than fiat currencies.
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Store of value , no intermediary , large amount can be trasnferred at smaller fee than traditional methods .
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Awesome!
What gives anything value other than it is an agreed upon choice by two parties or more?
Good point. Even fiat goes by this rule even though a lot of people don't see that
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To be blunt, "lack of governance from traditional govt" opens up door for mafia and black money which is mostly pumped into the crypto and that gives most crypto the value it has as of now. Because normal public who has no access to phone don't buy crypto. I know thousand of people who have computer, phone yet have never touched crypto or even understand it. So the money that is pumped into crypto market is from the white collar people who want to do dark work or mafia pumping into such coins.
Just my 2 cents of observation.
Okay? Like all the legacy institutional investors that are buying up cryptocurrency now and are pumping and dumping? I tend to disagree with your assessment, but we are all entitled to our opinions I guess. 😁
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And even governments now, as is the case of El Salvador!
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I am not saying "legacy institutional investors" are not buying it. I am saying maximum of crypto money has been mafia funds movement or VC scams.
I don't think the rug pullers or the people being rug pulled vastly worked with the mafia/black market forces. Thanks for your input tho.
USD is backed by "the full faith and credit of the government." In 2021, that means that USD is backed by nothing. It's been backed by "nothing" since 1971, but it has new meaning these days. Only the real threat of government force gives it the illusion of having worth.
Since more people than not believe otherwise, USD holds its grip on the imagination. When more people discover (to their dismay or horror) that USD is backed by nothing, confidence in USD will reach its well-earned level of worth: zero.
Wouldn't it be ironic if the federal government came to depend on cryptocurrency to pay down the national debt? Whichever altcoin gets used for this purpose will moon so high investors will find themselves in the Andromeda Galaxy. It won't happen because the people running the federal government need the people to remainin debt to maintain control over them.
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