What is the collateral behind Bitcoin?

[rolls89]

What is the collateral behind Bitcoin?Like in case of Fixed deposits Money deposited acts as a collateral.In case of a car loan Car acts as a collateral.Likewise what is collateral behind Bitcoin? BTCBTC

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[manfredmann]

There is no collateral against bitcoin because people has agreed to it that bitcoin well have a value and the value for bitcoin will depend on the demand for it. As we all know that bitcoin literally had a rare acceptance on establishments. Most common use of bitcoin is holding it and waiting for the market price to goes higher and selling it when one can profit already.

[batang_bitcoin]

Bitcoin is decentralized so there's no collateral or any exchange in need just to have it.

Bitcoin isn't a loan to have a collateral. To understand it easily, you buy bitcoin with the use of your money and you get bitcoin only. Well that can be the easiest explanation that I can give or someone can give more enlightening explanation.

[sri11]

there seems to be no guarantee for bitcoin like borrowing money in a bank that should require collateral, bitcoin does not like it just requires mutual trust

[gasparyu]

A collateral is something pledged as security for repayment of a loan. Simply saying, bitcoin is not a loan. You don't loan a bitcoin, paying it month per month. You get bitcoin equal to the value of your money. Straight up just buying and it's done.

[aoluain]

As mentioned, bitcoin is a decentralised technology, no one person or group control it.

We need to consider and remind ourselves of this and that it is not like FIAT currencies,
the only backing it has is from its miners and users and as long as we all believe in its
technology it will continue.

[clonely]

There is no guarantee of everything in life. Bitcoin is a currency. The preferred value is increased.

[virendarnagpal]

There is basic difference  between Bank deposits / loans vs Bitcoin or crypto currency.
When you deposit your money in a Bank the Bank is giving you a receipt guaranteeing to pay back after a certain period of time the  principal amount plus the interest as applicable for that period.  In some countries where the Banks are run by the governments; the receipt of the Bank is equivalent to the receipt issued by the Government so fully secured.  In case of private banks it depends on the worth and goodwill of the Bank accepting deposit.

When car loan is given ; car is hypothecated to the lender Bank and in case of default the Bank can take the possession of the car and sell it; so it is collateral.

But in case of bitcoin the value / price is not being fixed by anyone because it is decentralized, virtual currency, not run by any agency.  There is no centralized controlling authority over it.  The base price can be the cost of mining plus miners remuneration.  
But the speculation, demand and supply are the major reasons behind the volatility of it's price.  Price  of one bitcoin at one time may be 5k dollars while on the other time it may be $15k.  If one  buys one bitcoin at any price as mentioned above; it depends upon his luck, expertise, knowledge that whether he will get back his investment or not?  He may get 15k for the amount invested 5k and may have to be satisfied with 5k against the purchase price of 15k.

[左]

What is the collateral behind Bitcoin?Like in case of Fixed deposits Money deposited acts as a collateral.In case of a car loan Car acts as a collateral.Likewise what is collateral behind Bitcoin? BTCBTC

Money people use to buy it with, mining equipment etc.
Nobody gets  bitcoin for free.

[demenBTC]

What is the collateral behind Bitcoin?Like in case of Fixed deposits Money deposited acts as a collateral.In case of a car loan Car acts as a collateral.Likewise what is collateral behind Bitcoin? BTCBTC

someone can not guarantee the goods like in a traditional bank, if we want to borrow bitcoin with landing system like in poloniex we have to have bitcoin to bet in the market itself.

[Mind Control]

What is the collateral behind Bitcoin?Like in case of Fixed deposits Money deposited acts as a collateral.In case of a car loan Car acts as a collateral.Likewise what is collateral behind Bitcoin? BTCBTC

Bitcoin is not a loan in order for it to have any collateral. You buy Bitcoin voluntarily and understanding that the price could fluctuate at any second. Bitcoin is not backed by gold, money, or any item that is of value. So if you lose your Bitcoins, there's nothing you can do about it nor you'll receive something for it has no collateral at all.

[blacknight789]

words like "collateral" is for banking section specially for the loan department and cryptocurrency is lot more different than this all. here you can have a confirmation receipt about your investment. Here prices can change any moment not like the bank culture where the government fix a rate so it is better if we don't mix this things.

[avikz]

What is the collateral behind Bitcoin?Like in case of Fixed deposits Money deposited acts as a collateral.In case of a car loan Car acts as a collateral.Likewise what is collateral behind Bitcoin? BTCBTC

Are you seriously asking this question or just having fun?? Bitcoin is a decentralized currency without any controlling authority unlike Banks. Who would keep the collateral? There is no authority who is controlling the circulation of bitcoin!!

However, there are three intangible collaratels available for bitcoin,

1. Public trust
2. Hope
3. Technology

Bitcoin is pretty much based on these three pillars. You can take these as collaterals as well if you really need to factor in. But quantification of these collaratels is not available!

[mobnepal]

What is the collateral behind Bitcoin?Like in case of Fixed deposits Money deposited acts as a collateral.In case of a car loan Car acts as a collateral.Likewise what is collateral behind Bitcoin? BTCBTC

Bitcoin is neither issued by government/bank like fiat nor it is a form of credit to us so there is no need of collateral at all.
Bitcoin hold value based on people's trust over it and supply/demand of bitcoin drives the price. With growing demand and limited supply of bitcoin price is moving upwards if we look at long term charts.

Many experts that's why suggest to only invest what you can loss in bitcoin because it can be worthless in future which is quite unlikely scenario but its better not to take risk with all of your money.

[kotajikikox]

I have no idea about bitcoin collateral because as decentralized digital currency, the bitcoin holder's is anonymous they can buy bitcoin without any information from the buyer in the online exhange so how can give requirements people use bitcoin anonymously. My answer not collateral.

[jhon_21]

Actually BTC is fully decentralized system based on this I think BTC have no collateral system. Though it’s a cryptocurrency so this loans are not available because no one control this system but in case of fiat currency you can.

[pitiflin]

Bitcoin is neither issued by government/bank like fiat nor it is a form of credit to us so there is no need of collateral at all.
Bitcoin hold value based on people's trust over it and supply/demand of bitcoin drives the price. With growing demand and limited supply of bitcoin price is moving upwards if we look at long term charts.

Many experts that's why suggest to only invest what you can loss in bitcoin because it can be worthless in future which is quite unlikely scenario but its better not to take risk with all of your money.

In addition to this, bitcoin is only backed by a few lines of code. There's no real collateral. Bitcoin's price is determined by demand and supply and nothing else, just like Gold and other things that aren't made up from thin air.

And why are you comparing a car loan to bitcoin? Makes absolutely no sense. Bitcoin is a currency, and you buy it just like buying any goods/services. Do they necessarily have collateral?

[spazie]

I think bitcoin can not make guarantees to borrow money in the bank, because Bitcoin is virtual money, my hope in the future can someday be for collateral.

[Walter789]

There's no collateral behind bitcoin investment and trading since bitcoin is cryptocurrency or virtual currency and used blockchain technology so that there was no definitely collateral that bitcoin imposed. However eventhough bitcoin have no indemnity there are still backing with you in terms of your time spending on crypto world. And also your efforts and hardworks given from bitcoin are still the collateral.

[MetalGear]

A collateral is something pledged as security for repayment of a loan. Simply saying, bitcoin is not a loan. You don't loan a bitcoin, paying it month per month. You get bitcoin equal to the value of your money. Straight up just buying and it's done.

Yeah I agree, bitcoin is not loan that needs collateral, only bank are find collateral before you making a loan. Banking loan are so hard to apply cause there are so many documents they needs and the collateral are need much higher value than your loan and the payment they require is monthly but in bitcoin you never need collateral to start to invest.