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Author Topic: What is Bitcoin backed by? Well what are good domain names backed by?  (Read 966 times)
herzmeister
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March 20, 2013, 12:01:33 PM
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I think this is a good comparison, better than going great lengths comparing it with gold and mining etc...

I still see people trying to derive the value from the proof of work, that they're expensive to create, etc...

But proof of work is obviously merely an implementation detail, rather than the cause of what gives them value. If bitcoins could be distributed in another way (more or less gradually and evenly over time), they were just as valuable. Scarcity and usefulness is all that's required, as we all here (should) know.

So even for gold bugs it will be more intuitive to understand that good domain names are "backed by nothing", are just characters (and numbers), are merely digital sorcery, but they're limited and useful, hence they have value.

The Bitcoin system is just like that -- it's a global borderless value transfer system which uses units that are limited in number by design. They're just more fungible (being random-looking numbers and characters) than domain names. And everyone can have "shares" in this system just by holding some of these units.

So I hope this is an explanation that would once and for all satisfy the question of "what gives 'em damn bitcoins value" for everyone.

(Also there's no central authority like ICANN in Bitcoin of course.)

https://localbitcoins.com/?ch=80k | BTC: 1LJvmd1iLi199eY7EVKtNQRW3LqZi8ZmmB
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