New to BTC

[cleent7319]

Hi all,
new to this forum and have a few questions to understand BTC better, as I am a firm believer it's the way of the future but still have some things that confuse me - please bear with me:
1. How did BTC increase in value to current values from first BTC? compared to stocks/ shares etc.these have underlying value based on income, assets etc.
2. for future BTC growth, if more people hold on to BTC as an "investment" than use it, does not present any issues?
3. Volatility and purchasing power - isn't this a potential issue? If I bought a car for example for 50BTC, and the current fiat value was worth $ 50 000, but then in a years time the BTC value halves (or doubles), does that not mess around with underlying value of anything significant you may buy with BTC?

sorry, if silly questions and thanks for your patience!

[cryptoaddictchie]

_{First of all welcome to the forum mate}

1. How did BTC increase in value to current values from first BTC? compared to stocks/ shares etc.these have underlying value based on income, assets etc.

Due to demand and adoption improvement. Since then BTC has grow exponentially in the blink of an eye. Its value is based on its demand, normally we can just follow the principle of demand and supply to relate at least. Also this is a decentralized asset where no one controls it so some people are fond using this rather than stock/share for their investment.

2. for future BTC growth, if more people hold on to BTC as an "investment" than use it, does not present any issues?

No, the value will go up as many will hoard their assets but its not advisable in my opinion. Somehow the views of most people interested on BTC is this but there are true bitcoiners who wanted it adoption to bloom and btc used as a means of peer to peer use cases.

3. Volatility and purchasing power - isn't this a potential issue? If I bought a car for example for 50BTC, and the current fiat value was worth $ 50 000, but then in a years time the BTC value halves (or doubles), does that not mess around with underlying value of anything significant you may buy with BTC?

Like what I said, this is a speculative commodity, so its not an issue whether its value fluctuate down or suddenly rise up. You got a point but we must viewed this cause as part of this system. Your car's value will always be the dame as 50k worth regardless bitcoin go up and down.

Just my 2cent satoshi.

[Upgrade00]

1. How did BTC increase in value to current values from first BTC? compared to stocks/ shares etc.these have underlying value based on income, assets etc.

Traders speculate on the value, it was greatly undervalued when it was first created as few people understood the technicalities of it, as more people got interested demand rose and so did the value.
Bitcoin also has an intrinsic value that is gotten from the cost of mining them.

2. for future BTC growth, if more people hold on to BTC as an "investment" than use it, does not present any issues?

As long as it has speculative value and potential to grow people are going to hodl, it would be a while before Bitcoin matures into a widely accepted medium of payments, and at that point users would have to spend it

3. Volatility and purchasing power - isn't this a potential issue? If I bought a car for example for 50BTC, and the current fiat value was worth $ 50 000, but then in a years time the BTC value halves (or doubles), does that not mess around with underlying value of anything significant you may buy with BTC?

Just like the scenario of the pizza that was bought with 10,000BTC about ten years ago which was worth about $41 then, but is worth millions of dollars now. This did not make the price of pizzas to skyrocket. So, I do not have think the underlying value of a product purchased with bitcoin is affected by a price movements.

[The Cryptovator]

Welcome to the forum, since you are a beginner on the bitcoin I will prefer you to read everything on the website first to gain basic knowledge about bitcoin. Here is official website, https://bitcoin.org. When you will read whitepaper you will find some answers why bitcoin has been created at the first time and what was the thoughts.

Shortly I will try to answer you instead of quote every part. Bitcoin price depend on the demand from community. When buy pressure increse then price increse as well. So it's from the beginning when bitcoin was created. If more people invest on it and hold then value will increse since its fixed supply.

If you know about bitcoin pizza day then you will get answer about your buy car. Someone had spent 10000BTC to buy pizza. Now how much worth? You should judge now what will happen after 10 years. You are buying something with current price. That's why some HODLER like to HODL btc for long time instead of buy something.

[jossiel]

2. It won't have any issues. If people won't spend their bitcoins, that will create scarcity which is really one of the best thing about bitcoin. There's a very few supply and majority of us don't want to spend that much bitcoins which can make the value higher.

It doesn't mean that many won't spend it. We're more oblige to spend it whenever we want but as an investment, I don't see any issue with it. Once we're ready to sell or spend it for things that we want, that's how it works. Everyone is free to hold it or spend it.

[Cnut237]

BTC as an "investment"

anything significant you may buy with BTC?

Bitcoin has the potential to fulfill more than one use case. What we are talking about here is both bitcoin as a store-of-value and bitcoin as a day-to-day currency. These use cases can overlap, but this isn't necessarily always the case.

For BTC to be a day-to-day currency it would have to lose the volatility and be much more stable in dollar price. But whilst a stable price might meet the criteria of a store-of-value, this use-case is more often associated with price increases - which would not make it very suitable as a day-to-day currency.

We are still relatively early in the journey towards mainstream adoption, and BTC's ultimate use-case remains, for the time being, fluid. You will see people talking about it as a store-of-value, and in the next breath as a day-to-day currency. It could be either, but is I think unlikely to be both.

[joniboini]

3. Volatility and purchasing power - isn't this a potential issue? If I bought a car for example for 50BTC, and the current fiat value was worth $ 50 000, but then in a years time the BTC value halves (or doubles), does that not mess around with underlying value of anything significant you may buy with BTC?

This mess happens because most system use fiat to denominate the value of their products. Which is why most merchants would quickly liquidate their bitcoins after they receive it from the buyers. If in the future the value of bitcoin become stable, or if people can confidently say that their products this amount of bitcoin without having to worry about the fiat value, I guess it won't be that problematic. Regardless of the conditions, there will always be some workaround anyway.

[cleent7319]

Many thanks to all your kind and prompt responses. It has made my perceived issues way clearer.

[seoincorporation]

...
3. Volatility and purchasing power - isn't this a potential issue? If I bought a car for example for 50BTC, and the current fiat value was worth $ 50 000, but then in a years time the BTC value halves (or doubles), does that not mess around with underlying value of anything significant you may buy with BTC?

This is the main issue about BTC today is at one prize and tomorrow we don't know what will happen. For people like me who join in 2014 to this world, to look back isn't an option. I see bitcoin growing from $300 to $20k and i spend them at all his prices. I regret to not hold but sometimes it feels like losing and others like winning.

Think on your example but in the opposite direction, what if you buy a car with 50btc  at $50k and the prize of btc goes to the half.

[Stedsm]

1. How did BTC increase in value to current values from first BTC? compared to stocks/ shares etc.these have underlying value based on income, assets etc.

BTC is a deflationary asset and that's the only reason it gained its current value this high. Another reason is the mining feature attached to it. It costed less to mine BTC in its early days when difficulty was damn low and so the price was low. Difficulty adjusts with the type of machines used to mine BTC which makes it harder for miners to find blocks, this is why it's necessary for traders to keep the value of BTC "even" matching it with miners' costs and even more in order to let them continue their mining.

2. for future BTC growth, if more people hold on to BTC as an "investment" than use it, does not present any issues?

Satoshi held his coins above a decade and they're still there. Did it make any difference? Maybe a small difference can be seen and that is, price hike because if no one will sell, they'll probably do this for price rise. Hodl we call it.

3. Volatility and purchasing power - isn't this a potential issue? If I bought a car for example for 50BTC, and the current fiat value was worth $ 50 000, but then in a years time the BTC value halves (or doubles), does that not mess around with underlying value of anything significant you may buy with BTC?

You bought the car with your BTC when it was worth $1k (based on your example) and then if someone else (even if you don't buy a car and) wants to keep it a year later, then it's your problem because BTC is a volatile asset and when you trade anything that works almost as a stock, you need to understand the risks as well. After all, 1 BTC is just 1 BTC in the end.