Stop in for a cup of coffee
Reading about bit coin. Now, I am not a stupid guy, I can make or fix most anything. I have a Bachelors in business, BUT, I do not see how Bit /coin has value. Just because it is hard to mine? Really????
Bitcoin in all actuality is just like any other fiat currency. It only has value because enough people have agreed it has value. This could be done with anything including Monopoly money. Fiat currencies are not backed by anything like gold or silver or whatever other physical currencies throughout history.
So a good example of this would be the dollar. Yes, the dollar is a fiat currency. It holds value because enough people recognize it to have such value. It is not actually “money” in the sense of anything valuable. It’s just numbers printed on paper.
Now take Venezuela for example, a HUGE part of their socio-economic troubles come from the fact that barely anyone outside of that country will take their currency. So their currency is pretty much worthless. Now there’s deeper and more complex reasons for this but you get the general idea.
so how does this relate to bitcoin? Well, you have half the story already. Yes, it started as a data mine to harness unused RAM to solve complex math equations that even super computers couldn’t solve on their own. Aka mining.
Because this used your computer and your electricity, the developer paid you in a form of digital coin, a bit coin. That could later be exchanged between people in what was essentially a barter economy around the world, with no regard to currency exchange rates or government intervention. This is also why the EU tried unsuccessfully to shut Bitcoin down.
now here’s where things get interesting. Bitcoin and it’s location on the net, are only known to the holder. So if you have say 10 bitcoins, their location is nothing more than an algorithm containing an unique url to that location. You can even go a step farther and get vpn wallets and scramblers and really conceal your money’s location. This means that no hacker, no government and even yourself, should you lose that location or forget your password, can retrieve it. For example, there is a guy in Europe in jail simply because he refuses to tell the EU where his millions in bitcoins are located. Guy secretly installed mining software on hundreds of gov computers and mined thousands of bit coins in the early days.
now, the reason it is becoming so valuable is all the above combined. But think about it, it’s safer than a bank, it can’t be stolen. And as long as enough people feel it has value, it will continue to do so. Yes, it’ll spike up and down as people sell it back and forth but there’s becoming a trend in recent years, as the economic situations get worse, people run towards hedges, gold, silver and now Bitcoin and it’s sisters. Why? Because it’s almost become as easy as PayPaling someone money to buy and sell it. I think it will continue to climb in popularity. But with it being a finite amount, unlike the dollar or euro(which the government can literally create with a few key strokes), once all the Bitcoin is mined, that’s it, no more new Bitcoins. And as we see with classic cars, enough people want them and the price gets stupid high.
hope that helps
@Mopar Tim
