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by baddox
3449 days ago
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Bitcoin isn't backed by any assets. Bitcoins ARE assets. They don't have value because someone just came along and claimed they do (try to start your own Bitcoin clone and see how much people will buy them for). They have value because people are willing to trade for them, and there are many potential reasons for that (some less reassuring than others). |
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"They don't have value because someone just came along and claimed they do" - that's exactly why they have value - because a bunch of people arbitrarily believe they have value.
There are zero currencies which survive on this basis.
All major currencies exist because they are the medium of exchange in some economy - and/or they are backed by something tangible: in the US it's government debt, in Europe by other assets.
In China it's a little more fantastic, but the currency has about as much trust as one can have in their government - meaning, it's sketchy, but it's not going to 0 overnight.
Bitcoin could be worth 0 tommorow if people lose interest, vendors stop caring - which could happen - after all, what is the underlying impetus to keep pricing momentum? Is there demand on Bitcoin for people to pay taxes? Nope. To buy other products and services? Nope. As a 'store of value'. Nope.
Really - the only value might be to 'hide from paying taxes' or to 'hide from authorities' - which admittedly has value to some people, but I'm not sure if it's enough to keep it afloat.