Bitcoin Forum

It makes perfect sense to want to own something that is has increased in value 13-fold in the last year, but is part of Bitcoin’s value due to the social status it brings?

A study conducted by Bernstein Research has recently suggested just that. The analysts agree that limited supply plays a big role in the price surge, but the social standing that comes with owning Bitcoin may also be causing investors to join the hype:

“Bitcoins do not provide investors with cash-flows or other benefits, but the maximum supply of Bitcoins is fixed and so the price is driven by speculation on the potential demand for Bitcoin.”

A Veblen good
Just like high-end liquor, fancy cars and fashion brands, Bitcoin is acting like a Veblen good. The higher prices for certain goods can be attributed to the reinforcement of the social status attached to the product, something Bernstein calls “snob value.” The analysis added:

“In mid-2017, we conducted a consumer survey of 1,070 Chinese Premium Goods Consumers which showed that Veblen Demand is the third most important motivator of brand choice in brands.”

Demand Curve of a Veblen Good

Bitcoin is perceived as difficult to understand for those who aren’t “in the know.” Thus, owning Bitcoin immediately gives one that “snob value,” implying greater intelligence or insight.

Just like medicine...
In a strange, yet practical comparison, Bernstein compares Bitcoin to E.Jiao - traditional Chinese medicine derived from donkey skin. In 2016, China produced 5,000 tons of E.Jiao, which required 2.5 mln donkey skins. This has lead to a scarcity of donkey skins and cheap imitations coming to the market.

The original product’s leading manufacturer - Dong E-E.Jiao - has been able to raise the price of its product 18 times over the last decade because of the Veblen good-quality that has become attached to it with its scarcity.

Dot-com hype?
While not necessarily a good, in the early 90s, with the dot-com boom, there was a certain social standing that came with being involved in a technology company. People were caught up in the hype partially because they wanted to be part of the early elite that were making waves in technology.

It has already been seen that companies that simply add Blockchain to their name get huge waves of unjustified interest, and again, this could be likened to the social status that comes with being part of a company that is in the cryptocurrency space.

Has it already reached that point? I still don't see a lot of people around me bragging that they've tried investing in bitcoin. Considering the price fell, I would know from their faces if they were one of those that bought around $20,000.  ;D

It would still have to get through the stigma the banking industry and the media has slapped on it. While there may be people thinking they are cool for buying some, a lot are still guarded.

Maybe not because a lot of people still laugh at people who are buying Bitcoin and basing it from my personal experience they hide it to people who are not open to cryptocurrencies. Even me I get laughed at and judge by people who think that I am out of my mind buying Bitcoin.  Yes we cannot deny the fact that Bitcoin's price is brought up to the recent demand for it and also the growth of the cryptocurrency market. The market is still growing and we can see that the price of Bitcoin is not due to Social Status.

I doubt your social status will actually change for owning a few Bitcoins unless the corresponding Fiat Value is high... Other than that, I believe Bitcoin is valued for its uses and the potential growth it brings.

I can see it getting a status symbol, but we aren't there yet at all. Most typical for status symbols is that rich and famous people flaunt it, which isn't really the case at all.

But no, BTC offers some unique properties that I think the large majority of the world has not even considered yet. The amount of people that own BTC is very, very small. It is only 8 years old, I think it can take a few decades.

I haven't viewed it as a status symbol myself, and I've never really seen others brag about it either in real life.

It is a good investment , not a status symbol . Smart people about his wealth are silent and do the right thing . And in this area full of moshennikov ,which can Rob

Your taking it too far for the investors to go for bitcoin just for the social status that it brings, that is not the main reason why they're jumping the hype train nor strike through their minds that they can gain greater social status just by owning this currency, I'm afraid you can gain such a good status as some countries are banning btc, haters wrote some negative views leaving a bad impression on people that may result in a bad social status.

Yes but it has gotten social status by being a new and useful invention.

Very good point. Bitcoin is like the Louis Vuittom of crypto. You can buy better products for less money, but a single Bitcoin is scarce, expensive, and definitely serves as a status symbol. These are qualities that tech nerds have a very hard time understanding. With that being said, if the Lightning Network succeeds, it will also have superior tech. Only time will tell.

Bitcoin's value is due to it being the originator and then successful.  Everything else follows and falls in place after that, such as social status and alt coins.

Now the price BTC is not very stable, but it does not frighten people from buying it as people see it in the future and how to make money.

you are right. It was the first coin and it became famous.

That may be a possibility but I do not think that is something that is happening right now, some of my friends think I'm dumb for having bitcoin, however as time passes I think that not only having some bitcoin will become a mark of status it is possible that just the year in which you became involved in bitcoin will be a status in itself, just like the early adopters before us, there are going to be a lot of people joining bitcoin in the next years and when they ask us when we got in bitcoin they are going to be surprised we were interested in bitcoin at such an early stage.

Many new people came to crypto just to earn. They saw how much bitcoin had grown over the past year and decided to invest in it. And I do not see anything wrong with that. Everyone has the right for a better life.

Its much more than mere social status or money power. Its about a new world order.

I lie about how much crypto I have (say I have less than I do), not really sure why.  So I definitely don’t consider it a social status thing

that is an extremely biased wall of text which i dare call FUD even.

there are a lot of reasons for bitcoin's price and the way it rises. there is a very long list of them and the "social status" is at the bottom of that list.

it is true that the limited supply of bitcoin (which is also a small amount not a ridiculous amount) plays an important role in the final price of bitcoin due to supply and demand but people aren't jumping on board and invest in bitcoin because of that. they invest in bitcoin because it is a peer to peer digital cash as the paper written by the creator Satoshi Nakamoto calls it.

I do not think so. I think bitcoin is the master of cryptopcurrecy. It decides everything. It's not just the social network that decides it

Personally, I think bitcoin will become a new currency, a universal currency.
At present, the whole world can only be used for the United States dollar, and the emergence of bitcoin is to break this pattern.

There's no social status assigned to owning bitcoin, if you say you own bitcoin people will still think you are a weirdo that spends too much time inside, possibly a criminal selling illegal things on the darknet and other negative connotations.

Maybe once it reaches an higher valuation like $100,000 or $1 million people will start getting past these cliches and accept that someone that managed to own at least 1 BTC was ahead of the pack and therefore will translate as status. Until then they will continue thinking it's weird and a bubble.

Most likely it's not a matter of social status, but that the crypto-currencies in particular in the technology of blockchain are in general the modern flagship of the digital industry. All this is understood, but the details do not know everything that awakens interest

Yeah right now the people investing in bitcoin are believers in the technology or people looking to make a lot of money, maybe in the future bitcoin will become a mark of status as much as brands like Ferrari or Rolex but that is not the case right now and there is not a reason to think this is going to happen anytime soon.