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BTC was the one and only crypto currency to exist I'd think it has some value. However when there are many crypto currencies why does BTC have any value? Eg if

by rb808 9y ago

BTC was the one and only crypto currency to exist I'd think it has some value. However when there are many crypto currencies why does BTC have any value? Eg if ETH starts being used for most transactions, and BTC started crashing in value would anyone feel a need to keep it?

stevenmays 9y ago
This argument makes no sense. "If the euro exists, why does the dollar have value?" Edit: The above is a rhetorical question.
- dragandj 9y ago
  Because both currencies have monopoly in two highly developed economies. I guarantee you that the exact moment the government crashes or drops support for the currency, that currency becomes worth zero. Happened many times in history. However, I bet the chance of either US or EU collapsing is tiny.
  - stevenmays 9y ago
    My comment was rephrasing the OP so they'd understand why they're argument was wrong, not an actual opinion.
    - dragandj 9y ago
      Sorry for quick shallow reading on my part.
- flunhat 9y ago
  Because you need it to pay taxes in European nations?
- runeks 9y ago
  Because the Euro and the US Dollar are legal tender in their respective jurisdictions, thus giving them a competitive edge over other types of money, and — perhaps more importantly — because capital gains are calculated using each currency as a reference in the jurisdiction where it’s legal tender. So, if you invest in Euros in the US, and the dollar falls relative to the Euro, you owe money to the IRS — and vice verse for the Euro in Euro-countries. It’s difficult for competing currencies to gain traction when you owe money if the legal tender drops in value (relative to the competing currency).
  - stevenmays 9y ago
    Read the OP, then read my comment... Yes, I understand why 2 different currencies have value. The OP does not. Rhetorical question.
    - deleted 9y ago
      [deleted]
- kaffeemitsahne 9y ago
  If businesscards, party flyers, and other pieces of paper exist, why do dollar bills have value?
  - taw55 9y ago
    Not sure if this is rethorical, but it's a great question. In hacker-news-pedantry tradition i will answer: A. A dollar bill represents an accounting entry in a bank account. Banks are the third party that facilitate trust and the rules by which 2 actors trade. B. Dollar bills are legal tender for the payment of taxes. They are enforced by government, which is the sole legal arbiter of coercive action. Taxation requires every citizen to hold a reserve of state currency. C. Due to the specialized printing process dollar bills are, at least theoretically, hard to counterfeit. D. Ubiquity as trading mechanism, barter requires double coincidence of wants (rare) or interpersonal credit (lack of third party oversight to guarantee fair play). When holding assets, these can deprecate (or appreciate) in value, and would need to be converted in cash holdings to avoid the impracticalities of barter exchange. E. They are an convenient way of turning digital entries into tangible user objects, since they hardly take any space. I'm sure you could keep the list going. Notice how cryptocurrencies satisfy a lot of those conditions. Also notice how bitcoin in particular fails at a number of them.
  - deleted 9y ago
    [deleted]
- rb808 9y ago
  I've lived and worked in many countries, I know why sovereign currencies exist. I don't understand your point. I can understand we will have multiple crypto currencies, but if there are unlimited number of currencies, why would any of them have any value?
djohnston 9y ago
"would anyone fell a need to keep it?" BTC holders, at least.
- dragandj 9y ago
  But what when some of them stop HODLING?
sboselli 9y ago
If BTC has any value at all, then all other cryptocurrencies have at least some minimum value solely as a possible redundacy or replacement in case of emergency. That's not the whole story though, some of these other cryptos also serve as a testbed for new concepts & improvements, differ in particular ways to better suit a specific purpose, target different markets, have different core values or are alltogether alternate technical implementations. Each one of those nuances adds some deegree of value. As with any stock or other economic asset, their price today is not necessarily reflecting the value it has for practical use today, but rather the possibility that it will become necessary or more dominant in the future.
nikcub 9y ago
Network effects. No other crypto is as well established or has as many points of contact with the real world economy as Bitcoin. So much so, that when trading other crypto currencies you're usually trading via BTC.
sgspace 9y ago
1) First mover advantage. Bitcoin is the easiest crypto currency to buy or sell for fiat. Every crypto exchange/atm/payment gateway supports Bitcoin and maybe some altcoins like Ether or Litecoin. On crypto exchanges, Bitcoin is always the base market pair. Bitcoin is the oldest, most battle tested crypto, so people expect it to be the most secure. 2) Economics. Bitcoin is deflationary. There will only ever be 21m Bitcoins. Ethereum does not have a hard cap on the max number of Ethers. Each coin has its own economics. Smart investors will understand the economics behind each coin they buy into. Otherwise you end up buying Ripple at 40 cents each thinking its a bargain...

by rb808 9y ago

stevenmays 9y ago

This argument makes no sense. "If the euro exists, why does the dollar have value?" Edit: The above is a rhetorical question.

dragandj 9y ago
Because both currencies have monopoly in two highly developed economies. I guarantee you that the exact moment the government crashes or drops support for the currency, that currency becomes worth zero. Happened many times in history. However, I bet the chance of either US or EU collapsing is tiny.
- stevenmays 9y ago
  My comment was rephrasing the OP so they'd understand why they're argument was wrong, not an actual opinion.
  - dragandj 9y ago
    Sorry for quick shallow reading on my part.
flunhat 9y ago
Because you need it to pay taxes in European nations?
runeks 9y ago
Because the Euro and the US Dollar are legal tender in their respective jurisdictions, thus giving them a competitive edge over other types of money, and — perhaps more importantly — because capital gains are calculated using each currency as a reference in the jurisdiction where it’s legal tender. So, if you invest in Euros in the US, and the dollar falls relative to the Euro, you owe money to the IRS — and vice verse for the Euro in Euro-countries. It’s difficult for competing currencies to gain traction when you owe money if the legal tender drops in value (relative to the competing currency).
- stevenmays 9y ago
  Read the OP, then read my comment... Yes, I understand why 2 different currencies have value. The OP does not. Rhetorical question.
  - deleted 9y ago
    [deleted]
kaffeemitsahne 9y ago
If businesscards, party flyers, and other pieces of paper exist, why do dollar bills have value?
- taw55 9y ago
  Not sure if this is rethorical, but it's a great question. In hacker-news-pedantry tradition i will answer: A. A dollar bill represents an accounting entry in a bank account. Banks are the third party that facilitate trust and the rules by which 2 actors trade. B. Dollar bills are legal tender for the payment of taxes. They are enforced by government, which is the sole legal arbiter of coercive action. Taxation requires every citizen to hold a reserve of state currency. C. Due to the specialized printing process dollar bills are, at least theoretically, hard to counterfeit. D. Ubiquity as trading mechanism, barter requires double coincidence of wants (rare) or interpersonal credit (lack of third party oversight to guarantee fair play). When holding assets, these can deprecate (or appreciate) in value, and would need to be converted in cash holdings to avoid the impracticalities of barter exchange. E. They are an convenient way of turning digital entries into tangible user objects, since they hardly take any space. I'm sure you could keep the list going. Notice how cryptocurrencies satisfy a lot of those conditions. Also notice how bitcoin in particular fails at a number of them.
- deleted 9y ago
  [deleted]
rb808 9y ago
I've lived and worked in many countries, I know why sovereign currencies exist. I don't understand your point. I can understand we will have multiple crypto currencies, but if there are unlimited number of currencies, why would any of them have any value?

djohnston 9y ago

"would anyone fell a need to keep it?" BTC holders, at least.

dragandj 9y ago
But what when some of them stop HODLING?

sboselli 9y ago

If BTC has any value at all, then all other cryptocurrencies have at least some minimum value solely as a possible redundacy or replacement in case of emergency. That's not the whole story though, some of these other cryptos also serve as a testbed for new concepts & improvements, differ in particular ways to better suit a specific purpose, target different markets, have different core values or are alltogether alternate technical implementations. Each one of those nuances adds some deegree of value. As with any stock or other economic asset, their price today is not necessarily reflecting the value it has for practical use today, but rather the possibility that it will become necessary or more dominant in the future.

nikcub 9y ago

Network effects. No other crypto is as well established or has as many points of contact with the real world economy as Bitcoin. So much so, that when trading other crypto currencies you're usually trading via BTC.

sgspace 9y ago

1) First mover advantage. Bitcoin is the easiest crypto currency to buy or sell for fiat. Every crypto exchange/atm/payment gateway supports Bitcoin and maybe some altcoins like Ether or Litecoin. On crypto exchanges, Bitcoin is always the base market pair. Bitcoin is the oldest, most battle tested crypto, so people expect it to be the most secure. 2) Economics. Bitcoin is deflationary. There will only ever be 21m Bitcoins. Ethereum does not have a hard cap on the max number of Ethers. Each coin has its own economics. Smart investors will understand the economics behind each coin they buy into. Otherwise you end up buying Ripple at 40 cents each thinking its a bargain...