Can someone explain why cryptocurrencies have value?
In essence, the work your PC or other peoples' PCs did is what gives it value?
>Why does bitcoin have value
Because everyone agrees it has value,
The same reason anything has inherent value in the first place.
You can't eat fucking gold/diamonds or precious metals.
The value is decided by people.
If you understand this you understand how pricing and markets work.
Otherwise go to econ 101 and learn you some shit faget.
Theoretically there can be "infinite real money" (for example banks printing more and more €) the value of cash CAN drop to almost 0 as it happened quite a few times because of war.
With bitcoin, there is a max amount of coins that can be extracted through mining, and this is one of the huge benefit of crypto currencies.
Yes but this leads to the question, why does anyone place value in cryptocurrency?
It's not backed by any government.
>bitcoins are real money because I say so
The money supply is created out of nothing. There's no "gold standard" any more.
The supply of money is expanded regardless of the demand for goods and services, which creates inflation. The buying power of the dollar never goes up.
So the only thing that gives money value, is the supply of money that already exists.
So money's "value" is not actually derived from anything of real value, like food, fuel, clothes etc.
Something has "value" if people believe in that something.
People believe that digital blocks of ones and zeros are on equal plain of worth with gold and that why they can be exchanged for it.
Its basic economics and the fact you dont know where money comes from and how it works its tells me you never had a job and most likely you are underage.
first off, I am not surprised that people who post anime are this retarded.
Secondly, the value comes from the fact that the amount of bitcoins are a finite value and therefore a limited resource. It costs people actual money to produce bitcoin by mining them and there are exchanges willing to give you fiat currencies for bitcoin.
The last one, partially, gives you the ability to assign a USD value to a bitcoin. The rest of it is based on how much it costs to produce a bitcoin. Electricity, CPU's etc.
Another huge factor is acceptance of the value of the currency.
Traditional, fiat currencies need to be backed by law because it's been so fucked up and raped that it no longer has a real value. it's even more vaporware like than bitcoin.
Currencies are meant to be a promise of physical goods. i.e. gold. However, there is not enough gold to back every dollar in existence because people are fucking greedy and want more money. So instead of the currency collapsing, laws protect it.
you're the dumbass here mate, mining creates bitcoin. Buying and selling creates an exchange.
Are you a janitor somewhere? Please don't tell me you actually contribute to anything in life.
umm, only if you exchange it for money? Not if you buy things with it. Is this rocket science to you?
>factory uses money to make an item
>you buy the item
>you've got real money coming in and real money coming out
>You know you can sell them for real money right?
>umm, only if you exchange it for money?
Keep up with the conversation friend. Yeah I guess if you want illegal shit then whatever fine but bitcoin will never be anything noticeable if its only application is buying your drugs or whores.
>Keep up with the conversation friend. Yeah I guess if you want illegal shit then whatever fine but bitcoin will never be anything noticeable if its only application is buying your drugs or whores.
Okay m8, cool story. Don't mind me while i go to Subway/SFU bookstore/Bloomberg to go buy my drugs and whores.
pic related again
So you work at a job to get real money OR you spend real money on electricity to mine either way to get bitcoins. Then you buy goods from a service which instantly converts those bitcoins into real cash and passes the currency exchange fee onto your end fee.
Sounds like a really good idea mate. All these totally necessary additional fees for tons of reasons!
1. If you don't see the point, then don't use it. But don't assume that means there is no point for anyone else either.
2. The total fee for the seller is actually lower than when accepting credit cards, even after including exchanging the bitcoin back into fiat, so if fees are your argument then you should be in favor of bitcoin.
that's the way it is now. The currency is still young and hasn't been widely adopted. Until you start earning in bitcoin, you will always need to convert it. But I can see that most of this is going over your head anyway so there isn't much point trying to educate you any further.
I'm done with you.
The currency never will grow because it favours early adopters. As it grows in popularity it's attractiveness proportionally decreases. By this very principal Bitcoin will never become mainstream.
This is only true if by users you mean investors wanting to profit. But the actual bulk of potentials users are just that: users, that only want a usable currency. And for that purpose, the attractiveness certainly grows over time because bitcoin becomes accepted more places and more stable.
I did buy things, and I did get the shit I ordered.
In fact I vastly prefer BTC over having to deal with Paypal (which froze funds in my account for no reason, so all the two items I sold on eBay were for nothing) and having to deal with my bank (much much much longer processing time for all operations).
You consistently prove that statement to be false. I wonder if you'll do it one more time?
Romans had legionaries to threaten peasants with. Not much choice.
If the rich and influential have no desire to switch to a currency that disadvantages them what makes you think that the masses which follow them will move either?
Uh, this is an economics question. You should really ask what gives anything value. Why are diamonds more expensive than water when you need water to live but diamonds don't do anything? The answer is marginal utility. Things don't really have objective value. They have objective properties and then people use those things for their own ends, thus 'valuing them'. The price of something and its value are linked but are not the same. Market price is an interaction of supply and demand. Why would anyone demand bitcoin? Well, in the case of bitcoin there are three main factors that give it some 'value'. One is that it is scarce, there's only a certain amount at any time and only a certain amount is created at any time. Second is that it costs electricity money to create bitcoin. In the early days, people realized that it was actually cheaper to simply buy bitcoin than to mine it, so they bought it, thus raising its price to the cost of electricity production at least. This got bitcoin started with a price. That's all you really need to know, if someone wants something and they are willing to buy it on the market, that's what it is 'worth'. What gives anything value? If people want it. The third value in bitcoin that makes people want it is that it can be used as money and transferred, with no fees, with no central authority, anywhere in the world. It has the value of being able to serve as a medium of exchange in a superior way. The network effect is the reason why bitcoin is the most valuable cryptocurrency, since it was the first, it has the most use value as it's the most accepted, has the most market cap (yes that's circular) and most recognized.
>muh gold standard
If you think enough gold is as worthless as paper money.
We agreed that gold is worth something, the same way we agreed that paper money is worth something.
The crucial difference is because there's a limited supply of gold in earth's crust you can't manipulate it's value easily like central banks do with printed money.