What is the collateral behind Bitcoin?

[Nhor1011]

   There is no collateral in bitcoin. It was created as digital currency that has no value at the start. But when people start to have interest on it and make it an investment it slowly rise and become valuable until now. The demand makes bitcoin valuable and through the help of blockchain technology bitcoin continue to flow with anonymity to all people who used it with out any collateral.

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[Falmera]

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

I think bitcoin is not that strong enough to be used as a collateral. It depends on the person's faith on bitcoin if he accept it as a collateral.Its our faith that guarantees it.

[BlackandRed654]

Bitcoin doesn't require any collateral against its investment. As it is an industry where money is invested in favor of the value likewise share market. And again, BTC is generally used for making transactions using a decentralized network, thus it doesn't require collateral. In case you think about taking loans from crypto market, they have their own policies rather collateral.

[timerland]

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

Think of bitcoin like sort of a digital, better version of gold.

Does gold have any "collateral" per se behind it that gives it intrinsic value? No. However, it's still considered to be a great store of value and hedge against fiat inflation. This is because the supply of gold is decentralized, it can't be manipulated by entities or organisations, and there is a demand for gold as a store of value.

That's how bitcoin derives its value from, in my opinion, and it's the same as gold. Bitcoin isn't representative money - it doesn't have a backing per se, but its supply is limited and hard coded, unlike fiat, making it a good store of value in the long run.

[BitcoinFX]

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

Zero. None. The system does not have collateral - https://en.wikipedia.org/wiki/Collateral_(finance) - because it isn't based on debt.

The Monetary System Visually Explained
- https://youtu.be/aXiNZWJKnVI

The parallel world we are living in is a debt based kleptocracy - https://en.wikipedia.org/wiki/Kleptocracy

...

However, if I had to give you a (bad) one word answer I would say 'Math'.

[ballerin and giroud]

There is no second party, and there is no second party when you have bitcoins. You buy bitcoin from someone for intance, after that there is no special guarantee given by someone who sells bitcoin to you and make sure bitcoin you have is safe, bitcoin you have will be profitable. In crypto currency you buy bitcoin, then you who have full rights in watching you will get profit or you will get loss.

[farhiamunni]

Decentralized system is Bitcoin's main characteristics that's why it does not have any collateral. One buys bitcoin at his own risks hoping to get benefited when the price goes up.

[Jet Cash]

By 'collateral' I assume you mean 'underlying asset value', and Bitcoin is interesting in that the asset value is virtual, and based on the solution of a complex mathematical calculation. This proof of work requirement prevents indiscrimate creation of Bitcoins, and is in sharp contrast to fiat currencies which have no underlying asset values and no limits on their creation, and are essentially worthless as a result. The asset value of Bitcoin is based on scarcity and demand, and is comparable to gold and silver. Another interesting class of virtual assets is Internet domain names.

[Billgates710]

Bitcoin is a disperse technology. No one control this system. You only buy bitcoin through use of your own currency. We have to consider this, this is not fiat currencies.

[cryptoVinc5599]

There is no collateral in bitcoin as a decentralized technology. You can not consider as a loan you can get bitcoin as much you pay for this. You have fully trustworthy when you want invest on it .I think you would be never disappointed on just one thing i can suggest not to fear just go for it

[jasydoggye]

nexo is offering a facility where loan seekers can get loans by keeping by their coins as collateral, this would allow the coin holder to keep their coins as well as get a loan. once the loan is paid the coin will be returned and the coin holder can sell off their coin at the market price.

[jasydoggye]

Collateral is property or other assets that a borrower offers a lender to secure a loan. Bitcoin is not like loan. Moreover it is decentralized in nature. So there is no collateral in bitcoin.

[annasadia]

There is no particular collateral behind bitcoin because it is all about strategy in my opinion. Fiat currency needs collateral because it is well established but people buy and sell bitcoin only to make some money till now.

[blacknight789]

I think Bitcoin is not like bank related traditional transaction process. It has its own systematic way of business. There are many easiest way to know about bitcoin I guess. You can try on of these.

[BlackandRed654]

No person or group controls Bitcoin because Bitcoin is a decentralized virtual currency. There is no collateral to Bitcoin. Bitcoin's value can increase or decrease depending on the demand.

[markluis]

Simply saying, there isn't any collateral offered in Bitcoin. Actually, BTC are not loaned over, it is being traded over internet Crypto-space in exchange of money. You buy bitcoin, you get its values and nothing else. And also there isn't any governing authority to control over it. So no chance of deposit. BTC though, is a hotcake in the market having so many other demanding factors.

[btcluisdiki]

Actually, there is no collateral when people invest with bitcoin wherein I would say people should have the right knowledge when participating in doing investment.  People should accept that there is always a risk involved in btc but that risk would be a minimal one if you acquire the skills in analyzing the market trend. The best thing to do is hold when it dip and sell when the market goes up and that will depend on your decision.

[stimliall]

There is no collateral behind BTC, and no organization or government guarantees BTC!
The value of BTC is that people are returning to investment through other trusts! The value of Bitcoin is accumulating a little bit with the increase in the number of users.

[magneto]

Bitcoin is not an interest bearing loan.

Colletaral is only used when you've got someone who wants a loan, and it is filled with some sort of item with equal or more value held by the lender to liquidate in case the borrower defaults on the loan. That's what a collateral is.

Bitcoin is not based on debt. Bitcoin is a currency, and currencies don't need collateral to back it. For example, precious metals don't have collateral backing, nor do fiat currencies.

Though of course, bitcoin is much better as "money" and store of wealth compared to fiat because its supply isn't centralised.

[rabia_laskor]

Bitcoin doesn't have collateral. It is a decentralized currency which is used to do transactions. We cannot take a loan, either it can be used as bonds. Besides, the price very fluctuates. People need to believe it to accept it.