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Since the value is based on confidence and it is not backed by anything ... who knows? Same sentence applies to fiat currency too although there is so much int
by bbcbasic 10y ago
Since the value is based on confidence and it is not backed by anything ... who knows?
Same sentence applies to fiat currency too although there is so much interest in keeping those stable that they are unlikely to tank.
- dr_win 10y agoIf something (a commodity) has limited supply and there is non-zero demand => it has a value. Demand for fiat currencies is at least generated by legal tender laws (you need it to pay taxes). Demand for bitcoin is at least generated by the need to publish some information in a global immutable distributed censorship-proof table. Those two sources of demand are the fundamental ones (I would say intrinsic). There definitely are more. Some demand is for example generated by "store of value" function or "medium of exchange" function. These functions emerge as secondary functions when a commodity is selected by market for its favourable properties. So I would disagree that "bitcoin is not backed by anything". You might have written "I don't see the intrinsic value backing bitcoin" or "bitcoin is not backed by anything tangible". Those statements would be correct.
- eb0la 10y agoI feel some amount of Bitcoin is backed by fear. Specifically from countries that are removing bills like India or Venezuela. Years ago you had to buy dollars or gold but Bitcoin is somewhat opaque to that governments because there is yet very little people involved