Where does bitcoin value come from? Lets take a look at 3 elements that are intrinsic to bitcoin’s nature.
Bitcoin as a New Disruptive Technology – VALUE ELEMENT #1
Bitcoin as a currency, as a payment system and as a stock cannot be separated from its nature as a new revolutionary technology.
Leaving technical concepts apart, the bitcoin system provides the base for:
– Transferring money with low or none cost to any place in the world. Global acceptance and distribution!
– Empower people to become their own bank, removing the dependance on financial institutions. Freedom!
– Empower people currently out of the banking system. Democratic!
– Avoid the deflationary effects of traditional currency. Buying power!
– Pay for goods and services while protecting your personal data. Security!
The Bitcoin Network – VALUE ELEMENT #2
People trust (?) the US dollar, the Euro (and others) because they are supported by certain infrastructure that ensures its availability, supply, exchange, usage, etc., and that its value is recognized by other parties when you want to trade/exchange it, right?
Bitcoin is empowered by the trust its network of users, miners, merchants, traders, investors, entrepreneurs, advocates provide to it.
Supply and demand produces its effects on value. In terms of supply, the network is limited to 21mm. As gold, bitcoin could last forever (unless you lost them!).
Similar to dollars, bitcoin can be moved around, be aggregated, and be subdivided easily.
But its core value is that bitcoin is decentralized, globally distributed, everybody can participate but no one has power over it.
Bitcoin as an Intellectual/Knowledge Base – VALUE ELEMENT #3
Bitcoin has started a new revolutionary change. By itself, the system has created the need to learn new things, ways of thinking and doing upon which people will start to experiment and even develop new intellect.
In that sense, we can expect to see a larger development of new technologies based on OR conceived with bitcoin at its core. The entrepreneurial spirit is exploding as we have seen during 2013, with investors supporting and following this trend.
Bitcoin is also gaining space into people’s minds on its path to go mainstream, what we will see happening during the next 10 to 20 years. This means learning a new language/concepts/terminology, new practices and new tools (Ex. Virtual wallets).