The repetition of bitcoin having nothing to back it is a very old misnomer, probably good to get that settled now. It actually has two values behind it.
1) Initial worth. Bitcoin's initial worth is the amount of effort put into creating and circulating the coins. Since miners have to invest money and time into creating coins (mining) just like any commodity which takes investment to create which is an overhead for the miners. That investment (overhead+miner profit) sets a base value for which the market pays make use of as anyone would for an ingot of gold. Like any business, those are real numbers and must be recovered for the miners to succeed.
But the market needs to see an ongoing value to choose to buy it from the miners and use it, hence...
2) Ongoing worth/value. Accounting, safety and security of your funds and fund transactions. We create value from the work we do and we want that value protected, from the time funds are acquired to the time they are to be spent, whether that be next week or waiting for retirement. What we see with fiat currencies is that value dropping all the time (90% over the past century and accelerating.)
People turn to precious metals, real estate, etc. but they are very hard to transact with. Fiat is easier to transact with but the fees (especially over borders) are killers. Bitcoin's value (as opposed to price) is the ability to have safe/secure transactions that are faster, minimal fees, with a fair amount of privacy. That is highly valuable in itself. The average person pays a minimum of $300 a year just to have a bank account and suffer brutal fees to pay for that top heavy system of so called safety and security. A home alarm, we could say has no intrinsic value (a box that beeps) or a guard dog (meat that barks) but they have real value in that they bring a sense of security so that we do not lose value we have collected. Some would call that instrumental value as opposed to intrinsic, but I see it as both. All of bitcoin's other features enhance this, making bitcoin an incredibly useful and flexible value transaction system (numbers that protect your previous effort).
If we are willing to pay for a book containing lines of columns for tracking wealth, or a spreadsheet for doing so, then there is value in those things. It is a myth that bitcoin has no value, spread by the banks who are scared by what bitcoin is capable of, namely the demise of the banks usefulness (and that can be called the third value).
1) Initial worth. Bitcoin's initial worth is the amount of effort put into creating and circulating the coins. Since miners have to invest money and time into creating coins (mining) just like any commodity which takes investment to create which is an overhead for the miners. That investment (overhead+miner profit) sets a base value for which the market pays make use of as anyone would for an ingot of gold. Like any business, those are real numbers and must be recovered for the miners to succeed.
But the market needs to see an ongoing value to choose to buy it from the miners and use it, hence...
2) Ongoing worth/value. Accounting, safety and security of your funds and fund transactions. We create value from the work we do and we want that value protected, from the time funds are acquired to the time they are to be spent, whether that be next week or waiting for retirement. What we see with fiat currencies is that value dropping all the time (90% over the past century and accelerating.)
People turn to precious metals, real estate, etc. but they are very hard to transact with. Fiat is easier to transact with but the fees (especially over borders) are killers. Bitcoin's value (as opposed to price) is the ability to have safe/secure transactions that are faster, minimal fees, with a fair amount of privacy. That is highly valuable in itself. The average person pays a minimum of $300 a year just to have a bank account and suffer brutal fees to pay for that top heavy system of so called safety and security. A home alarm, we could say has no intrinsic value (a box that beeps) or a guard dog (meat that barks) but they have real value in that they bring a sense of security so that we do not lose value we have collected. Some would call that instrumental value as opposed to intrinsic, but I see it as both. All of bitcoin's other features enhance this, making bitcoin an incredibly useful and flexible value transaction system (numbers that protect your previous effort).
If we are willing to pay for a book containing lines of columns for tracking wealth, or a spreadsheet for doing so, then there is value in those things. It is a myth that bitcoin has no value, spread by the banks who are scared by what bitcoin is capable of, namely the demise of the banks usefulness (and that can be called the third value).
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