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Is Bitcoin actually worth anything? (lemmy.ml)

submitted 1 month ago by oxjox@lemmy.ml to c/asklemmy@lemmy.ml

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I get that anything is worth whatever someone is willing to pay for it. That's besides the point. My point is, beyond speculation, what do crypto coins represent?

I also understand that the value of the US dollar is being questioned almost as much without the backing of gold.

But what I really want to know is what is at the foundation level of Bitcoin that people are buying into?

I have a basic understanding of the blockchain, etc. I sold 1BTC in 2017 for $1200 when I thought that was as high as it would go. At this point, at over $100kUSD and rising steadily, what is the $ limit and what is that limit based upon? I thought it was based on the value of mining to check transactions but this seems... not worth $100k to me.

I've been thinking, the only tangible value I personally see in Bitcoin, because it's not really being used as legitimate currency, is for criminals. By now, there must be trillions of dollars in BTC acquired by criminals holding corporations hostage. When you've got people like Trump involved (either explicitly or by way of manipulation) with an executive order to establish a crypto czar, this suggests to me that he's creating pathways for bad actors to more effectively gain more wealth. These are the people who are most excited in Bitcoin, beyond speculation.

I mean, there's little to nothing on the up and up with crypto, right? It's a scam. Right?

Please, factual answers only. I'm looking for someone to dispel my speculation with genuine economics of the matter.

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[–] mrjack@lemmy.world 1 points 6 days ago

All good questions.

It can be both a currency and an investment. Money can be an investment, but not any fiat money that exists in the world today, thanks to inflation (money printing). Gold and silver can be both money and an investment, but even gold and silver have an inflation rate (new metal being mined and introduced into the market, aka market dilution.)

The reason this is a hard concept to grasp is because we are taking something that is truly finite (21 million bitcoins, EVER to exist) and we measure it against the USD which literally has no limit to the amount they can and will print. When you think of it this way, Bitcoin price relative to USD has no limit because USD money printing has no limit. There can always be more USD but never more BTC, therefore BTC's value when denominated in USD will theoretically go up forever (though not always at the same crazy rates we've seen the past 15 years.)

Take gold for example. In the 1960s it was $35/oz. Today it's over $3,000/oz. Is this because gold has somehow changed to become more valuable or did the USD just become less valuable while gold stayed the same?

1BTC will always be 1 of 21 million BTC. USD on the other hand will always be continually devalued due to money printing.

Nobody can tell you exactly how this is going to work out 20 or 50 years from now but the growing consensus is BTC price relative to fiat price can really only continue to go up because it's literally the the hardest form of money in the world - even more so than gold. It's the only asset in the universe that we can buy and hold and know exactly how much of it there is and ever will be.

I don't recommend anyone buy into something they don't understand but I will say I believe it would be well worth your time to study bitcoin and learn about what makes it different from fiat. Read books like Broken Money, The Bitcoin Standard and The Big Print.