Bitcoin Genesis - Satoshi Nakamoto
As Dr. Tomic explains, utility is a key driver of cryptos' worth. As more institutions accept crypto as a form of payment, the value goes up. This also means individuals can contribute to this process by using crypto. Why is bitcoin worth anything Bitcoin is limited in quantity, with only 21 million Bitcoins ever to exist in the world. It thus retains its relative value just as gold. It is also secure, decentralised and highly efficient for transactions. In short, Bitcoin serves a purpose and does not just exist in the financial system because of ancient practices.
What gives bitcoin its value
Are cryptocurrencies the wave of the future and should you be using and investing in them? And do the massive swings in their prices—nearly $1 trillion was wiped off their total value in May—portend trouble for the financial system? A Few Thoughts on Crypto While there are many reasons why so many individual and institutional investors believe Bitcoin has intrinsic value, it mainly comes down to trust. In fact, the modern financial system is built on this very type of trust — even though most existing fiat currencies and traditional financial instruments are not provably scarce, globally accessible, and community owned.Why Does Bitcoin Have Value?
The majority of Bitcoin or any cryptocurrency's value is purely speculative. That isn't to say that all cryptocurrencies are worthless, because fundamentally, even fiat currencies are a speculation on the wealth of a nation. The correlation of crypto prices with network effects means usage will always be a strong indicator of its price. Aside from that, there's intrinsic value in crypto today because it allows for cheap and safe value transfer. The security of the network is an added bonus, but the lack of liquidity in crypto markets are going to ensure extremely volatile prices in the short to medium term. How does the mining process affect a cryptocurrency’s value? As there are only a limited number of bitcoins in circulation and the creation of new bitcoins follows strict rules with a consistently decreasing output (because of shrinking rewards for miners), demand would have to follow the deflationary behaviour of Bitcoin to even theoretically keep prices stable.
