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.

  • mrjack@lemmy.world
    2·
    5 months ago

    You have to think about Bitcoin in a different way from any other form of money that has ever existed because it’s literally the first of its kind.

    I work hard for money. I expend my time and energy and talent in exchange for money (USD, in my case) that I can then trade in the future for the things I want/need. So money is an abstraction of my time and engergy, stored for later use.

    Unfortunately, USD is pretty highly inflationary and it loses a lot of value over time, so it doesn’t make sense to save it for very long. I have to either spend it or invest it because every day I hold on to it, it loses a little more of its original purchasing power.

    I could invest my money in gold or silver because those things are certainly more finite than USD and hold value better, but precious metals are heavy, difficult to transport and store in large quantities and I can’t easily use gold to pay for my daily expenses.

    So here’s an idea: What if instead of converting my time, energy and talent into some physical thing that I have to hold onto and contend with inflation, etc. we just cryptographically assign that value to an entry on the public blockchain ledger? Now, that value is permanently locked into part of the total 21 million supply of bitcoin and no one can create more of it. Bitcoin is literally the hardest form of money ever created.

    If I want to exchange that value with someone else in the future, I use my private cryptographic key to prove that I own it and I can effortlessly transfer it to anyone anywhere in the world in a matter of minutes.

    You can’t think of Bitcoin as some “thing” that you buy because a “bitcoin” is really nothing more than a unit of measurement. The real power of the bitcoin network is the ability to store and transmit value in a completely secure and trustless way that’s immune to the manipulation of fiat currency.

    If you’re truly interested in understanding the answers to your question of “is bitcoin actually worth anything”, I recommend the book Broken Money by Lyn Alden. It’s an easy read and it will absolutely change how you see money.

    • oxjox@lemmy.mlOPEnglish
      1·
      5 months ago

      Thank you.

      I guess the part where I’m stuck is the current volatile state of this “currency” compared to the idea or the promise of it.

      Should I buy BTC now or wait? Is it a currency or an investment?

      If something is an investment, can it also “be money”? Like, if I buy a painting for ten grand then twenty years later its worth 15 grand, I suppose I could trade the painting for something of an agreed upon equal value or I could sell it for money with which I can buy things. This concept isn’t really how we’ve experienced money in my lifetime.

      It’s this push / pull of crypto’s facade where I’m struggling. It’s looked at as both currency and investment at the same time. It doesn’t seem to have much value today to use as currency because as soon as you buy something you’ve lost money. I could take 100USD worth of BTC to buy a thing and tomorrow that hundred dollars could have been worth $110. It’s not possible to say something is “worth” .01BTC because that value will change tomorrow.

      It seems it’s only worth something today because people are investing in the promise of it. We don’t know if it will ever really be used as a currency as you’ve described. And, if and when that day comes to pass, what will the value of 1BTC be worth? Should I just wait five to ten years to buy crypto to avoid the speculative market? Maybe I miss out on capital gains over a hundred thousand dollars - is that so bad?

      Or, in your opinion, is it inevitable that this will be the world wide currency of the future?