Why does this have any value? It's not backed by any goverment, and it's not a physical commodity like gold where you can touch and feel it.
It is Decentralized
That means it is not backed by any government or central authority. For currencies like USD or the Euro they are backed by their respective government and groups of governments and with those goverments, there may be times of hardships. Hardships such as, but not limited to, war, famine, financial crisis, and natural disasters.
It is a Store of Value
When these difficulties hit, governments are usually tempted to just print out money. They might be needing that money because they are in debt or they need to fund a war. Printing more money increases it's supply and this could ultimately lead to inflation.
With bitcoin, there is a set maximum that can be created, and that is controlled by mathematics and computer code. Because there is a limit, it makes it a great store of value. You may have even heard of the term "digital gold" being used to refer to bitcoin.
First movers advantage
It is Secure
Bitcoin can only be transferred by mathematics. It has to adhere to the programming code rather than people. We do know that people can sometimes be controlled or influenced by politics or other external pressures.
As long as you are the only one in control of your private key, then your funds are safe. Someone cannot decide to suddenly lock up your account or freeze your funds.
Transactions cannot be reversed
when your bitcoins are sent, there’s no getting them back, unless the recipient returns them to you. They’re gone forever. This makes it difficult to commit the kind of fraud that we often see with credit cards, in which people make a purchase and then contact the credit card company to make a chargeback, effectively reversing the transaction.
It is Convenient
Earlier, when we talked about bitcoin being named as "digital gold", we forgot to mention another advantage that is has. Since bitcoin is a digital currency, it has the benefits of gold without the drawbacks.
Gold can be heavy and bulky, and thus hard to transport. You also need a secure place to physical store it. Since bitcoin is all digital, the cost of sending it doesn't change no matter where you are. The amount of time it takes and how much it costs is the same whether you're sending it to someone next to you or halfway across the world.
It's cheaper compared to bank transfers or international money transfers. The fees are a lot lower. Also, if you've ever tried to transfer money overseas, you know that it can take days. With bitcoin it is much faster - you can send money anywhere and it will arrive minutes later, as soon as the bitcoin network processes the payment.
the mentioned factors are applying to most of other altcoins
but why is bitcoin the most valuable cryptocurrency?
the way i see it, it's three factors
Reputation, widely used as a payment option, limit of quality
& it has the biggest share of miners
i think mining is a very big factor to increase cryptocurrency value, which is the point that most recent of altcoins are missing, even though they have better technology, faster confirmations & stronger security
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bro.. these are scam websites don't help them get famous..
Great review of the basics
Thank you for sharing @boxmining. This is a very informative post and answers many of the questions that people new to bitcoin and the crypto industry may have. How would you answer the question regarding people being able to send bitcoin for illegal transactions in a much easier process?
US dollar is the biggest currency used for illegal transactions.
Awesome post as always! Will be watching your video on Youtube now :D
Ty, for the video
greetings @boxminning
I agree, bitcoin is EXACTLY like gold, like you said. A digital gold. Gold is also decentralised. Also doesn't depend on one specific government. It's also a store of value. And it also doesn't have a real utility value.
But as much as it's more convenient to transfer Bitcoin compared to Gold; that also makes it less likeable, hence less usable. Gold is shiny! I know this sounds crazy, but people like Gold because they make rings, earrings, necklaces out of them. They show it off in the weddings etc.. Otherwise Gold actually has no value.
Bitcoin doesn't have value either but it also doesn't have the likability and use cases that people are attracted to. Now, that might change but I think it's much less likely for the mass population to adopt a digital non-utility asset (like bitcoin) than a physical non-utility asset (like gold).
I can't say the same about utility currencies though. Ethereum and co. are solving actual problems.
well written, bitcoin is decentralized and no govt. can stop it!
What about Jamie Dimon?
Nice post Boxmining! Most of the people have got convinced that crypto currency has better edge than the traditional currency system, but still acceptance & security needs to be improved further. On top of this, we are not sure how this digital currency will influence the functions of the current banking system. Anyway, time will help us to solve all these road blocks in coming days.
It seems to me that the best thing of all is it empowers people by encouraging creativity and innovation. it takes away the monopoly held by the banksters and puts the power back were it should be with the people who do all the work, nice post.regards Gez
Finally, I've read an explanation I understand. So, if I get Bitcoin, how do I spend it? Or, is it just for investment purposes only at this time?
Saying $370 is a massive error. Why wouldn't you re-edit and fix that? It's a good video but I'm hesitant to share because of that.
Good post Boxmining! Bitcoin is the real deal!
Great article. I share your enthusiasm for cryptocurrencies and Bitcoin in particular, but I think that it is important to observe the potential issues that we might face along the way. I'm thinking about the mining companies. Yes, Bitcoin is decentralized in theory, but is it really? Antpool and BTC.TOP, both private companies, mine about 36.4% of all BTC and growing. The recent 2X debate and the upcoming Bitcoin Gold forks shed light on the problems that Bitcoin has to overcome. I think Bitcoin and blockchain is one of the greatest technological breakthroughs we'll see in our lifetimes and I'm grateful to be able to witness and have a small part in that. Is there value in Bitcoin? Absolutely, but only as long as people believe in it and make it grow.
@cheetah
Its a great informative post ..keep it up
Enjoy!
https://steemit.com/news/@odigetti/6kpmxy-humor-bitcoin-regulation
This is a fascinating debate that I've had with friends about the true value of Bitcoin. Yes, I agree that all of the characteristics that you mentioned give Bitcoin value. I would also add that a VERY important characteristic that gives it value is the fact that it costs about $1000 in energy and equipment to mine one bitcoin. That helps set the floor for how low the currency can drop during a panic.
Bitcoin is probably one of the best innovative tech of the 21st country. It has huge potential and this is only the beginning of bitcoin. Mass adoption should soon follow. What a time to be alive!
nice
I am once became a victim of that charge back scam. I set up my online store last 2012 but paypal charge a dispute of unauthorized credit card usage, put some 2000 usd in freeze while the dispute is only at the amount of 30 usd. Therefore in my opinion paypal and other agency who hold fiat money is a scam. Real scam.
Besides ... for example bank robbery etc will also be impossible.
If it becomes a world standard currency, "exchange" will disappear.
An example of the ever changing industry and economics. Is great.
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I agree completely! I was having a discussion with a coworker yesterday, and he said he thought Bitcoin was "imaginary" money.. The DOLLAR IS IMAGINARY!
Nowadays people and government are slowly making their move towards digital currency to abolish corruption. This will have a paradigm shift and digital currencies such as bitcoin are very good alternatives..hence its value proposition increases over passage of time
The answer comes from understanding that every form of money, from dollars to gold to bitcoins, is only valuable if people consider it to be valuable. A money’s worth is completely based on our own individual perceptions. If we trust and value a form of money, we’ll accept it in return for our own goods and labor. But our trust in particular forms of money is not arbitrary or without reason. Nearly every form of popular money in history has possessed particular traits that have caused people to want to use it.
Bitcoin has nearly all of the properties of secure, sound, and useful money. And if a new form of money possesses enough of these qualities, especially to the point where it’s advantageous to use over other existing forms of money, people will voluntarily choose to accept it as payment and hold it as store of value. As demand increases, value increases, and the exchange rate goes up.
All these are certainly the points that make Bitcoin what it is at present. However, you need to know that Bitcoin reach is not alone to do with these points; it’s also to do with the contribution of other Cryptocurrencies and even the upcoming ICOs, as they boost it in greater way! I especially love this Cryptonetix, it’s one of the FINEST upcoming ICOs I have seen!
The main reasons mentioned here are that Bitcoin is decentralized and secure. Any currency, either digital or ordinary should be secure and this is a duty of government to do that for you. And having a decentralized currency makes the payments easy all over the world.