Why Bitcoin has Value?


Bitcoin

The most important question is why does bitcoin have any value. The reason your country’s currency has value is because it was agreed upon by the government to exchange goods and services, similar is the case with bitcoins. Bitcoin is a “cryptocurrency” in which “crypto” stands for cryptography which is used to keep the “currency” secure and prevent any frauds and hacking

The reason bitcoin has “value” is because the country of the internet has agreed upon it to exchange goods and services online. What happens if people unanimously agree not to use bitcoins as an exchange for goods and services, you guessed it right it will lose it’s “value.” The reason why bitcoins got a boom in early 2018 is just because people invested in bitcoin to be an exchange online, the more people agree to this the more is the value of bitcoin.

Bitcoins are usually used for goods and services online, many sites allow bitcoins for exchange, also it goes without saying it is also used for evil and criminal things on the dark web.

The reason bitcoin has value and credibility is because it is finite. Every bitcoin out there is a reward given to a miner for updating the blockchain. Bitcoin has no central authority. It works by a peer-to-peer network. People take up the responsibility to update the blockchain after every transaction. There are virtually thousands of people to keep track of the same “blockchain” credibility is maintained.

Anyone can mine bitcoins by running a program like bitminter on your computer. But, I highly recommend checking whether you will make a profit or not using your computer. How does profit or loss come into the picture you ask, you have to pay for the electricity, if what you are paying for the electricity is more than what you are making in bitcoins then it is just not smart.

How do you check whether you can make a profit? Well, check on an online bitcoin calculator like this mining calculator.

Also to note: mining for bitcoins for too long on your computer can heat it up and can potentially fry your machine. There are people who buy good hardware just to mine bitcoins, on a large scale such a setup is called bitcoin mining farm.

Though many people find Bitcoin valuable, there are fair shares that criticize the cryptocurrency. According to Warren Buffett, “When you’re buying non-productive assets, all you’re counting on is the next person is going to pay you more because they’re even more excited about another next person coming along.”

The value of Bitcoin is going to be on people’s belief and mutual agreement in the system.

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