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Author Topic: Does Bitcoin had a back up by real money?  (Read 1586 times)
beverly788113
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July 31, 2018, 11:46:57 PM
 #41

I just wonder how bitcoin really works on local exchange around the world because if you will going to need a real money and you have bitcoin definitely you can sell your bitcoin and exchange it with real money in your local to be used. Well if all people around the world would exchange their bitcoin holdings is it possible because bitcoin is being back up by real money?
I believe that bitcoin can not be backed up in real money, you can see that the number of bitcoins in the world is very small and it is not enough to meet the needs of any country. Bitocin prices also fluctuate very strongly and in very large amplitudes. Therefore, I believe that bitcoin can not become a currency and bitcoin can only be used as a means of exchange for keeping altcoin and USD.
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It is a common myth that Bitcoin is ruled by a majority of miners. This is not true. Bitcoin miners "vote" on the ordering of transactions, but that's all they do. They can't vote to change the network rules.
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August 01, 2018, 05:02:58 AM
 #42

I just wonder how bitcoin really works on local exchange around the world because if you will going to need a real money and you have bitcoin definitely you can sell your bitcoin and exchange it with real money in your local to be used. Well if all people around the world would exchange their bitcoin holdings is it possible because bitcoin is being back up by real money?
Bitcoin is Backed by people. So, if nobody wants to invest in bitcoin, the demand will decline because of its price drop. Notice that when many people invest in bitcoin the price rises and when many sell it is falling its price.

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August 13, 2018, 08:42:06 PM
 #43

I just wonder how bitcoin really works on local exchange around the world because if you will going to need a real money and you have bitcoin definitely you can sell your bitcoin and exchange it with real money in your local to be used. Well if all people around the world would exchange their bitcoin holdings is it possible because bitcoin is being back up by real money?
If everyone sell bitcoin, than somebody will buy it. And no, crypto currencies don't have gold backup.
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August 13, 2018, 09:52:11 PM
 #44

I just wonder how bitcoin really works on local exchange around the world because if you will going to need a real money and you have bitcoin definitely you can sell your bitcoin and exchange it with real money in your local to be used. Well if all people around the world would exchange their bitcoin holdings is it possible because bitcoin is being back up by real money?
I think that is absolutely impossible and if it happens, it will take a long time, take a lot of time. You can see that bitcoin is not controlled by a government or a state, so it is very difficult to trade successfully when the bitcoin price is not controlled and shark-dominated.

In addition, the number of bitcoins is limited so that bitcoins are not enough to meet human needs.
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August 13, 2018, 09:58:41 PM
 #45

Bitcoin and fiat if it is what you meant by real currency is related to each other like currencies around the world. They had this particular value and have different equivalents per currency. Because the encypted currency or cryptocurrency has also its unique value, it can be exchanged into fiat according to what its present value is.

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August 13, 2018, 10:38:07 PM
 #46

I just wonder how bitcoin really works on local exchange around the world because if you will going to need a real money and you have bitcoin definitely you can sell your bitcoin and exchange it with real money in your local to be used. Well if all people around the world would exchange their bitcoin holdings is it possible because bitcoin is being back up by real money?
No bitcoin isn't being backed up by real money. The sole purpose of the value of Bitcoin is supply and demand, the supply of bitcoin is limited i.e. 21 million coins to be formed ever and out of which about 17 million are mined already. So when a person buys bitcoin he creates demand and makes the market and that increases the price so when bitcoin become popular the market rises and vice versa.

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August 13, 2018, 10:52:25 PM
 #47

I just wonder how bitcoin really works on local exchange around the world because if you will going to need a real money and you have bitcoin definitely you can sell your bitcoin and exchange it with real money in your local to be used. Well if all people around the world would exchange their bitcoin holdings is it possible because bitcoin is being back up by real money?
No bitcoin isn't being backed up by real money. The sole purpose of the value of Bitcoin is supply and demand, the supply of bitcoin is limited i.e. 21 million coins to be formed ever and out of which about 17 million are mined already. So when a person buys bitcoin he creates demand and makes the market and that increases the price so when bitcoin become popular the market rises and vice versa.

Using Bitcoin in a transaction doesn't do anything for supply or demand necessarily. Those Bitcoins have already been bought or sold, so transacting in BTC shouldn't affect the price. The replacement of those Bitcoins by someone who spent them in theory is how that would come into play. On the flip side, it's more likely that transacting in btc has a negative pressure on price than someone buying with btc and then eventually buying more btc to replace what was already spent. That's because businesses are unlikely to hold btc, they just accept it as an accommodation, but are likely using a processor who instantly credits them with a USD equivalent amount. Holding it for any period of time threatens to erase the profit margin of the transaction due to price volatility, so purchases are likely to be instantly sold and converted to USD.

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August 13, 2018, 11:17:08 PM
 #48

I don't think that what you assume is possible, exchanges don't work like that in order to prevent extremely dramatic drops in prices, which can cause serious problems to economics. At least exchanges that I used had a strictly limited amount of Bitcoins you could sell for fiat currency and that amount was exactly equal to the amount of Bitcoins that was bought on that same exchange. So if everyone sells Bitcoin, but no one buys exchanges will just stop working after the exhausted stock. But Bitcoin isn't physically backed up by money or any other assets, like all other cryptocurrencies. There's only one maybe upcoming cryptocurrency, invented specifically for Muslims that conform with Sharia. As long as it prohibits using any currency that isn't backed up by anything the idea is to create a crypto, that would be backed up by gold, here's the link https://qz.com/1247409/bitcoin-cryptocurrencies-for-muslims-backed-by-gold-are-popping-up/
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August 13, 2018, 11:26:20 PM
 #49

Bitcoin is not supported by real money because the supply of bitcoin is 21 million, actually what happens is the change of bitcoin by people. for example: Those who sell bitcoin and after that someone buys. Easier we can equate with money in the bank.
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August 13, 2018, 11:36:19 PM
 #50

Bitcoin is the same with fiat currency that is back up by promises and helps one another with the growth of it's market price so i think they are link with one another and one of the factor of it's price growth of course investors. Bitcoin or crypto currencies is no different it is also back up by investors but has a lot of good feature but mainly it's popular because of it's decentralization.

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August 13, 2018, 11:42:13 PM
 #51

Not all people will exchange their bitcoin into fiat. There are people who keep bitcoin as a medium of investment over time. Bitcoin use is expected to grow in the future too. What this means is that when people get to do more buying and selling and offering services and pay/get paid with bitcoin, people wouldn't have to exchange their bitcoin as much.
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August 13, 2018, 11:49:02 PM
 #52

No. it doesn't back by any fiat money ( I disagree using the term real money ). Bitcoin gets its value base on Supply and demand, actually can be zero value if there is no demand for it.
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August 14, 2018, 06:12:27 AM
 #53

I can't comprehend it but my understanding is like this.

OP is telling that bitcoin is backed up by "real money" because when we sell bitcoin, we are getting cash/fiat money and that's what made him think that it is possible that bitcoin is backed up by real money.

Well, bitcoin is decentralized and it isn't backed up by anything. You just sell and exchange your bitcoin to cash just like you are selling goods for cash.



 

 

 

 

 

 


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August 15, 2018, 12:48:15 PM
 #54

I think it's not right to say btc is supported by flat money, but for now it is very difficult to use btc directly as a transaction tool because of the lack of facilities, the current fund btc and flat money still go hand in hand and I think they are complementary, in the future if btc is widely accepted and facilities are starting to be adequate then we do not have to bother to redeem btc on flat money every transaction
 
A big difference is there between bitcoin and fiat currency. No doubt that still all the people of the world are using their fiat currency for different purposes, and people use their fiat currencies to buy bitcoin, but still we cannot say that bitcoin has a backup of fiat currency. I think that as time pass people will start using bitcoin for everything.
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August 16, 2018, 01:08:33 PM
 #55

Bitcoin and fiat if it is what you meant by real currency is related to each other like currencies around the world. They had this particular value and have different equivalents per currency. Because the encypted currency or cryptocurrency has also its unique value, it can be exchanged into fiat according to what its present value is.
You should just think as simple as this. When you join a game you want to buy something in it, you have to put money in to buy. Electronic money and money will also be exchanged for each other. Due to the demand of the market when you really care.
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August 16, 2018, 01:28:36 PM
 #56

besides backing up I think bitcoin is also profitable, because of the price movement that every year tends to increase, and it is a very good thing to secure our money and get lots of profits, this is safer and more profitable than saving deposits at a bank
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August 16, 2018, 02:04:15 PM
 #57

I just wonder how bitcoin really works on local exchange around the world because if you will going to need a real money and you have bitcoin definitely you can sell your bitcoin and exchange it with real money in your local to be used. Well if all people around the world would exchange their bitcoin holdings is it possible because bitcoin is being back up by real money?

Since Bitcoin is a big deal and so expensive now then it does naturally have value to have a back up money from people because they intend to believe that it is.
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August 16, 2018, 02:10:32 PM
 #58

Bitcoins have no intrinsic value. But since they were introduced to the world in 2009 by inventor Satoshi Nakamoto (a pseudonym), they have turned into a billion-dollar market and have been designated a currency by the U.S. government. Since the days when stones and shells were recognized as a means of payment, currency has taken many forms. What makes bitcoin a currency is what it does, not what it is. "To the extent it looks, walks and acts like a duck, this 'duck' is a currency,"
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August 16, 2018, 05:45:56 PM
 #59

Bitcoins have no intrinsic value. But since they were introduced to the world in 2009 by inventor Satoshi Nakamoto (a pseudonym), they have turned into a billion-dollar market and have been designated a currency by the U.S. government. Since the days when stones and shells were recognized as a means of payment, currency has taken many forms. What makes bitcoin a currency is what it does, not what it is. "To the extent it looks, walks and acts like a duck, this 'duck' is a currency,"

The US government has never designated Bitcoin a currency. The closest to an official designation of any kind is by the IRS, which has deemed Bitcoin to be "property" for taxing purposes. That's not a currency. It is true however that Bitcoin has no intrinsic value. It doesn't represent anything in particular, but people have started acknowledging it to have value. This is an entirely artificial construct, and the value is only a representation of what large groups of people agree it is worth. Because of this, there is an inherent desire to constantly value it ever higher, because that's the only way you can get a return. On the other hand, potential buyers want to value it lower so they don't spend as much to acquire it. But real currencies are being traded to acquire the property (Bitcoin), the crypto itself doesn't function as a currency very much in the real world.

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August 16, 2018, 08:13:44 PM
 #60

Bitcoins have no intrinsic value. But since they were introduced to the world in 2009 by inventor Satoshi Nakamoto (a pseudonym), they have turned into a billion-dollar market and have been designated a currency by the U.S. government. Since the days when stones and shells were recognized as a means of payment, currency has taken many forms. What makes bitcoin a currency is what it does, not what it is. "To the extent it looks, walks and acts like a duck, this 'duck' is a currency,"

The US government has never designated Bitcoin a currency. The closest to an official designation of any kind is by the IRS, which has deemed Bitcoin to be "property" for taxing purposes. That's not a currency. It is true however that Bitcoin has no intrinsic value. It doesn't represent anything in particular, but people have started acknowledging it to have value. This is an entirely artificial construct, and the value is only a representation of what large groups of people agree it is worth. Because of this, there is an inherent desire to constantly value it ever higher, because that's the only way you can get a return. On the other hand, potential buyers want to value it lower so they don't spend as much to acquire it. But real currencies are being traded to acquire the property (Bitcoin), the crypto itself doesn't function as a currency very much in the real world.

Ah but if it has no intrinsic value, how can they declare it an asset? Can't have both I'm afraid...

In the new age of the internet, anything online can be deemed to have intrinsic value. We saw this phenomenon in the late 1990's when everyone thought it would be a great idea to invest in websites with a lot of hits. These hits were of course perceived value, but they were being sold as intrinsic value. Logic had it at the time that more hits meant more profits for a company.

The intrinsic value in bitcoin is the blockchain behind it. That very code makes it worth much more than any other idea in the last 20 years.
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