Bitcoin Forum

Where do bitcoins come from? From the WeUseCoins.com video it appears they are just being produced by "miners" and sold to people. So who backs Bitcoin or gives it its value?

The usual explanation is to picture Bitcoin as a Supercomputer cluster. Just search the term "supercomputer cluster" and you will find out that if you connect one desktop computer to another in a single network you will be able to create a very cheap supercomputer which is also called a cluster computer. The ./bitcoind or the bitcoin daemon turns every machine into a simple node that handles all of the copies of the blocks of the Bitcoin network if 1 million machines are using bitcoin daemon then there are 1 million copies of all the blocks from the genesis block which is actually recording all the transactions. These transaction records can be accessed readily just by using a block explorer. The miners are actually machines that verifies transactions. They are called miners since they are earning rewards from 25 Bitcoins when it started and now atleast 12.5 Bitcoins. The value of Bitcoins is actually based on the fact that it is the largest and fastest supercomputer cluster which was built not by businessmen but by the Bitcoin community. The value of Bitcoin is also backed by the unhackable/immutable public ledger that records every single transaction. The exchanges will say that the value of Bitcoin is fictional. No it  is not. Bitcoin is an infrastructure that has exchanges, miners/auditors, users, and the supercomputer cluster/nodes that is keeping the transaction 24 hours a day. 7 days a week. 365 days a year without holidays and weekend. It is the only infrastucture that can handle this amount of abuse for the past 9 years as it started in year 2009. The central banking can't transfer your funds on Saturdays and Sundays and holidays but Bitcoin doesn't refuse the challenge. Which is why it it so valuable.

The value of bitcoin is created by demand and offer by the need of market.I think the value of bitcoin comes from people's understanding of the need to change the Fiat system. Cash is indeed too easy to depreciate.

creation. in simple terms
bitcoin is created everytime a block (batch) of transactions get validated and locked into a chain of blocks(block validation / tx confirmation).
the work rquired to lock these transactions into blocks and chain them together to previous blocks requires special machines called asics to create the lock. these asics do alot of mathematical computations that would today require hundreds of millions of pc's cpu power to lock one block.

the owners of these pieces of equipment are called 'miners' and they pool all their asics hard work into groups which is why there are so many asics doing the job colectively, but from different locations.

what gives it value in simple terms
the cost of the asics and the electric can be calculated. and as such miners decide logically that its not worth selling coins below the cost of gtting their coin rward for validating and locking a block

so call this first layer of price support: mining cost

their is another layer of price support which is from buyers of previous coins. they too know how much it cost them to buy the coins and would not sell for less.

so lets call this second layer of price support: buyers remorse

these two support layers give bitcoin its intrinsic value.
then separate from the value. is all the emotional illogical nonsense of random choice. which is called speculation. this can cause alot of hype wher the price jumps up alot higher than value. causing a big temporary spike. or it can cause people to think all hope is lost and people sell as cheaply as they would dare risk.

the mining and buyers remorse support area is around $6k -$12k
the speculation area is anything above that.

imagine the price like a bathtub of water
the 'cost of obtaining' support lines is the waterline of value. but above the waterline is where things get stirred up by spculation and creat bubbles. this is why although 2018 never dropped below $6k, economics guys were screaming the price was a bubble when it reached $20k
(they were saying there was upto $14k of bubbles in the $20k price.. NOT that there were $20k of bubbles.. just like housing, when house prises double for no reason the housing bubble is the extra price that cant be explained)

the bottom $6k price point has been tested dozens of times since october 2017 and seems to be holding nicely so intrinsic value (cost of obtaining support) seems to be settling above the $6k range along with the averag mining costs which for the last few months has been varying the price below the $12k range

unless mining costs drastically dropped due to a drop in how difficult it is to mine. we should not see much change in the $6k support line. but speculation and emotion of foolish people who sell at a loss or buy at a premium can change the price to go down or up. usually spculation doesnt knock prices below support lines much but does send prices up way higher.

the positive flip side of this is that as it becomes more difficult to mine and more asic miners add more asics to the network the costs will rise. which should help keep the underlying value increasing.

i generally don't like your comparison because it is not a good one in my opinion!

wrong. miners find blocks they do not verify transactions. nodes verify them. then a miner includes those verified transactions in the block they found.

it started from 50

Bitcoin come as a reward to miner who input every trx in to a block after been verified by the node, it all started in 2009 with a reward of 50btc per block in every 10minutes, which in every 210,000 blocks reduce by 2, which has brought us to the third level of it by rewarding 12.5 in every block now and will continue till we get the last block at Max supply of 21,000,000 btc.

Bitcoin value is basically determine by market base on agreement between the seller n the buyer , which trigger the price to what ever the last buyer n seller agreed on and also by it decentralized features and store of value .

Bitcoins are generated through mining, the miners have their special reward (bitcoin) from the network. Also, the value of bitcoin depends on the buyers/sellers of it, thus the trend varies depending on the state of its market.

Bitcoin is created by generating random numbers, which is why it is called a digital coin. With respect to the value of bitcoin and generally decentralized crypto currency, there is no consensus. Most believe that bitcoin has no intrinsic value, and its price is formed solely on the basis of the ratio of supply and demand. However, bitcoin, like any crypto currency, provides us with the opportunity to use it to transfer money at any time to any place in the world and without intermediaries. Such an advantage can be measured from a material point of view, that is, it can be said that he still represents a certain material value.

this is a difficult mystery, bitcoin is derived from miners, but if about who found it and made it, the information is all in Satoshi Nakamoto.

because of the demand the value creates.

It is a trust that gives value to Bitcoin and the people who trust Bitcoin determines the price of Bitcoin in the market. The same thing is associated with Fiat currencies, we believe that a $1 bill has the value of $1 because the government want us to believe it. On the other hand, when it comes to cryptocurrencies, everyone trusts the entire network and believes that his Bitcoin has some value in terms of money.

Actually bitcoin is created from miners.But it was introduced by the legend called Sathoshi .But it was boon to lot of people.
The main advantage of bitcoin is we can expect huge profit in short term by the investments.
This is the reason for many people involved in crypto.

People create bitcoin by running something on their computers. They get paid for doing this so a great number of them are all doing it at the same time which makes the bitcoin network enormous.

Bitcoin gets its value from several mechanisms, intrinsic and user created.

The most valuable intrinsic characteristic of bitcoin is its scarcity. Because bitcoin is in short supply and no more will ever be created it’s value is inflationary (its value will always increase because no more can be created).

Bitcoin also gains worth by being an accepted means of exchange. This user created property increases its value over time. The more people agree that bitcoin has value then the more value it has.

Because bitcoin is always inflationary and people agree it is valuable it can be a “store of value” which also gives it worth. Most recognized means of storing value like gold can lose value over time. Bitcoin will always increase in value over large expanses of time (one year its worth $100, five years later $1000, another five years $5000, etc. always increasing over time makes it a good retirement vehicle)

Speculative interest makes bitcoin massively valuable to those fearless investors willing to risk money for short term profit. This is currently fueling the huge interest in bitcoin but speculative interest will decline as adoption increases.

Request you to go through http://lopp.net/bitcoin.html to know about Bitcoin and how it has been created. This link gives you the A to Z of Bitcoin and their concept. Apart from that you can go through some youtube videos about Bitcoin. Basically Bitcoin is created by Satoshi as a digital currency with the advanced technology of Block Chain.

The value of a Bitcoin is derived from the total value of the Bitcoin used for storage of wealth (SW) plus the total amount of the Bitcoin required for concurrently transacting in it (TX). The sum of these two numbers divided by the amount of Bitcoins in circulation (BC) (currently 12.2 million, ultimately 21 million), will give you the price of Bitcoin (PB).

During the inception of bitcoin, it literally has no value whatsoever. People just chose to give it some value and so history begins. Others thought that it could be a great speculative asset and so trading of bitcoin starts, with exchanges being set up and enthusiasts putting some real money onto it. The value of 1 bitcoin became something significant that enthusiasts started to think that they could 'farm' it on a large scale via mining, so dedicated miners, called ASICs are created just for mining bitcoins. From then on, people are buying and selling bitcoin up to the point that it reached such heights that people back then never thought would be possible. Right now, the cost of mining 1 bitcoin + supply and demand are the main factors on determining bitcoin prices.

Bitcoin is a huge amount of electricity spent on its production, this development and production of equipment for mining, it's a simple and quick way to send your money to anywhere in the world.

And the number of bitcoins is limited, he is forever freed from corruption, he can not be arrested and taken away, he can freeze the account, he is completely yours every second 365 days a year. And it's wonderful

In my point of view, the value of cryptocurrency was back up by the people who believe in and invested in it. We all observe that when investors dump their coin into the exchanges the price drop out. Every single centavo sent to the exchanges to buy cryptocurrency creates a movement of the price.

What gives value to bitcoin is the selling value of the blockchain system, so investors dare to give the money into bitcoin.
Blockchain system is very popular among people now, because according to what the user wants. that's my opinion.

Interesting facts) Every day bitcoin consumes as much energy as 520,000 Canadians. Bitcoin consumes as much energy as the entire Republic of Congo. Bitcoin consumes more energy than each of the 166 countries in the world.

not true
doing some maths
take the 35exa hash average
work out how many asics does that 35exahash
(35000000thash/14= 2500000 s9 ASICS all running all the time)
imagine electric at $0.05c /kwh
an asic uses 1.3kwh
=$162,500 an hour = ~$27083.33 per block(12.5btc) = ~$2166 /btc for electric

then with the asic itself. at bitmains latst release price of $850 per s9i, and assuming they run for a year (52416blocks = 655200btc time)
2500000*850=$3243

make it COST $3248+2166=5409 minimum to mine a btc

so taking the bitcoin price. of ~6700 right now against the $5409 minimal cost makes the cost of mining 80% of intrinsic VALUE
(i excluded some minimal extra things that get added to 'costs' like salary, facility leasing which bring it nearer to $6k cost (nearer 90% value)
but you see my point

in short
the speculation of
supply(amount of coins on exchanges NOT total circulation on network)
scarcity(amount of coins on network NOT on the exchanges)
demand
social drama
other things
makes up LESS than 20% of the price

anyway heres a chart
https://i.imgur.com/kKoy6LA.png
the top edge of yellow is the actual btc price.
the top line of blue is the combined cost of rigs and electric (s9i @ $850 each and electric at 5cent/kwh calculated using the hashrate changes over the month)

the reason scarcity is not a big percentage is the same as me saying this
my dog will only do ~4000 bowel movements in its life.. anyone want a bag?
lets see if a high population of those reading this says yes.. (they wont)
scarcity alone is small, its the speculation of function, utility and desire along with scarcity that adds more to the price than just cost

as you can see by the yellow speculation area. a month ago thr was 30% speculation ontop of basic minimal mining cost and this week its under 10%

Like fiat money, the valuation of BitCoin stems from its changing share per unit of world GDP transacting in it - the share of world economic activity expected to transact in BitCoin vs. the supply of BitCoin. Consider what gives fiat money value: is it the “faith in and credit of” the issuing government or its quantity relationship to real GDP? The CPI or purchasing power (valuation) of fiat money is clearly determined by its supply relationship to real GDP wherein excess money vs. production of goods and services determines the CPI.

What I hear bitcoin coming from japan country and finally used by people from some countries even now may have been used almost all over the world. And why they have value because that's what makes bitcoin worth until now.

I think if you make a research you will know where bitcoin is from and you can give yourself the right answer. But what I will let you to know is that bitcoin do not have owner also decentralized no body control it and it price. Bitcoin was invented by an unknown person or group of people under the name Satoshi Nakamoto and released as open-source software in 2009 With that brief introduction do the rest and find the answer that will satisfy you.

Bitcoin will not die. This is the original crypto and the first ever project of ICO. It will always do goes up and down (Price) but it will never fall to $100 per token. If this happen then some crypto will have a very nice outcomes. like altcoins, eth, trade.io, etc.. There's a lot of crypto btw

From my research the best short answer is that they have use value as a medium of value exchange. Their use value comes from having properties of gold (limited supply), and digitally transferable over the internet so can be called digital cash. There is no central authority, so you can trust the wisdom of the crowd. Another good described is a digital distributed notary system.

All the Bitcoin that will ever exist were created when the genesis block was laid. Miners just mine blocks

I started a thread about it on this board

Bitcoins are just ledger entries. Like all modern currencies they are not backed by anything, but have value based only on their usefulness and their supply.

The reason mining causes new bitcoins to be created is two-fold. On the one hand it's a mechanism to introduce bitcoins into the money supply that is controllable and essentially random (like winning little lotteries). On the other hand it motivates people to run the mining software which helps to secure the entire system.

They are scarce. The number of bitcoins can be predicted over time. They are easy to move. They are not easy to be forged. This is almost what you need. There is nothing to support them, just like nothing supporting gold. The main purpose of support is to ensure scarcity. But the block generation algorithm is compared with the special currency.

their value is what people think they are worth, as anything