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Author Topic: If Bitcoins aren't tied to a conventional currency how did they get so valuable?  (Read 135 times)
magneto
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July 30, 2018, 09:40:55 PM
 #21

If Bitcoins aren't tied to a conventional currency, how did they get so valuable?

It's quite the opposite - it's because bitcoin is a decentralised and independent currency that it's got intrinsic value. Its supply can't be modified like fiat can essentially be printed into existence by the government/central bank.

Bitcoin's utility as a decentralised currency is what makes it valuable. People know that it's an international medium of exchange that has a decentralised supply, which means that it's a great long term store of value. That's where the demand comes from. Same principle as gold and silver.

On the contrary, fiat currencies are actually intrinsically worthless - its supply can be increased at any time by a central entity, and we see this with Venezuela and and Zimbabwe as recent examples.

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July 31, 2018, 02:09:47 AM
 #22

     Even if Bitcoin is not tied to a conventional currency lot of people believe that the digital currency has many potentials the government doesn't understand what is the intention behind this digital currency creation they think that this is a scam the reality behind this decentralized digital currency was introduced to advance the potential of transaction in the digital goods .The value of Bitcoin is determined by the market as modern technology improved  new stuffs developed, the blockchain can increase the pace and can be used in business.

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July 31, 2018, 02:34:34 AM
 #23

     Even if Bitcoin is not tied to a conventional currency lot of people believe that the digital currency has many potentials the government doesn't understand what is the intention behind this digital currency creation they think that this is a scam the reality behind this decentralized digital currency was introduced to advance the potential of transaction in the digital goods .The value of Bitcoin is determined by the market as modern technology improved  new stuffs developed, the blockchain can increase the pace and can be used in business.
Your answer very good, I also think as same as you.
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July 31, 2018, 06:24:15 AM
 #24

If Bitcoins aren't tied to a conventional currency, how did they get so valuable?
Bitcoin is the peoples money. People are giving it a value because they rule it themselves. It is not like traditional government money where government can affect the prices. Hence this causes bitcoin to be up or down, expensive or cheap, whatever the price of bitcoin is actually decided upon what people value it. The value of it comes from the chances of not being tied to governments or corporations and having your own currency that you can call yours without anyone meddling with it.

All things in this world get their value based on demand. This demand is being decided by the supply. This is one of the core concept of every economics which applies to bitcoin ecosystem too. You sound like a school boy, go and educate on this from wiki pages before asking any more doubts from this community.

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July 31, 2018, 07:41:50 AM
 #25

If Bitcoins aren't tied to a conventional currency, how did they get so valuable?

In many countries there are centralized online exchangers with the help of which you can buy or sell bitcoin. There is also a decentralized exchange - localbitcoins , I like it more.

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July 31, 2018, 08:12:58 AM
 #26

     Even if Bitcoin is not tied to a conventional currency lot of people believe that the digital currency has many potentials the government doesn't understand what is the intention behind this digital currency creation they think that this is a scam the reality behind this decentralized digital currency was introduced to advance the potential of transaction in the digital goods .The value of Bitcoin is determined by the market as modern technology improved  new stuffs developed, the blockchain can increase the pace and can be used in business.
Think of bitcoin as a pass-through of every transaction it depends entirely on the elements to form. However, it does not belong to any organization so it is not affiliated or dependent on any other. It simply represents electronic money in general as a bridge to the market.

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July 31, 2018, 09:05:49 AM
 #27

If Bitcoins aren't tied to a conventional currency, how did they get so valuable?
Everything in this world has a perceived value. Bitcoin is so valuable because the people like you are me accept that it has this much value. The same concept applies to the currencies. The value of anything is greatly affected by the demand and supply forces. When Bitcoin was launched, its value was very less but when its demand started increasing, the supply being limited, its value started rising.

  

 
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July 31, 2018, 09:19:39 AM
 #28

Actually it did for now because people are deciding on the market price for crypto or bitcoin basing on its demand for it. As the demand for crypto goes high then so does its market price and it is even tied up to centralized currency like dollars. As you can see that the value of bitcoin is always being tied up with dollars or any local currencies.
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July 31, 2018, 11:41:58 AM
 #29

The growth of its price is parallel to the growth of those interested and buying bitcoins. The more popular is bitcoin, the more it grows in price.

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July 31, 2018, 11:47:04 AM
 #30

Each of these booms—and, for that matter, most bubbles throughout history—has been driven by the same basic publicity-price feedback loop. As an Internet writer, I've seen this process first hand. During times when the price is rising, there's a lot of traffic to be had writing about bitcoin, so reporters like me write articles (like this one!) about it. The articles cause more people to pay attention to the currency, and some of those people decide to buy. That pushes the price up even more, triggering more media coverage and more public interest.

This is very true because it is what drives most of the hype about new things. Then when so much interest is on a specific thing, everyone and their auntie (well not quite with bitcoin--yet) wants to buy it. So then it gets more and more expensive.

That's also the issue in the other direction, when people realize that speculation is just... speculation. That the numbers aren't supported by the facts, and the prices are much too high. Then they all run for cover, sell it off, and protect themselves. The recovery stage takes time, but it will go back up again.
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July 31, 2018, 11:53:04 AM
 #31

I think its value and the hype comes from the economic drive that is being created by the investors like us. What else could be the reason for that? Do you really think that there is any other way for the crypto to gain its value? Its just the real money that gets flooded into it time to time basis and over the time it can be condensed market and hyped prices for the bitcoin. For bitcoin the most easy way to get the value is its popularity and people just trying it out with thousands of dollars as an investment. Thats the possible explanation for this.

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July 31, 2018, 12:09:56 PM
 #32

Everything is based on users and investors which are "creating" the price of bitcoin, let's show this on example, you have something material, it has its own price but in some way this is only a thing made from something, the same is with coins but they are just in internet not in ours hands.



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August 02, 2018, 08:14:14 AM
 #33

Lol who told you that Bitcoin is not tied to conventional currency? Man it is. The main purpose Satoshi even made it was for it to be used as a way for making peer-to-peer transaction, but since it has a value that fluctuates up and down based on what is being invested on it, it continues to be going any direction based on what we invest, the price we are ready to buy and sell. So it is tied to conventional currency.



The value of BTC is determined by the market. If you are willing to buy BTC for $8200 and the other person in the market rather want to buy BTC for $8100 then both of you has to wait til someone is wiling to sell for the price you set. However the market place will set and average to which the basis for what the price would be just as how CMC shows the price is.
You’ve made the perfect explanation of this so no need for further explanation. And like you said it is fluctuating based on the rate of demand and supply, so that means that it is relying on conventional currency to gain its value, cause if we don’t invest our money (the real currency we are using) in it, then the value wouldn’t increase, and if it has increased already it will then start to decrease due to the rate of demand has decreased.
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August 02, 2018, 08:26:52 AM
 #34

Bitcoin has not been accepted by some countries. If bitcoin is not associated with a normal currency, the stability of bitcoin is not guaranteed, the value of bitcoin is unstable.
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August 02, 2018, 09:19:25 AM
 #35

What currency do you usually prefer? US dollar or another high-value currency? If bitcoin is associated with a high-value currency, the value of Bitcoin may be high.
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August 02, 2018, 09:36:58 AM
 #36

The current value of bitcoin is still considered as virtual and not long. When bitcoin is linked to another common currency, the value and future of the bitcoin will increase to a new level.
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August 02, 2018, 09:57:45 AM
 #37

If Bitcoins aren't tied to a conventional currency, how did they get so valuable?

If bitcoin is combined with Chinese yuan, what is the value of Bitcoin?
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August 02, 2018, 10:13:45 AM
 #38

If Bitcoins aren't tied to a conventional currency, how did they get so valuable?
This market is ruled by ideal model of demand and supply. People get interested in the new technology and are excited about generating some money on their own.They have demand and partially create their own supply. Others simply want to buy some coins, so they form demand, but the supply should be provided by others. What is essential for the increasing of bitcoin's price is limited supply. There cannot be more that 21 million coins, so when new people will join the market, they'll have to divide the btc that's already circulating. Plus, bitcoins are also generated in limited amounts each 4 years or so, which means that even though some day there will be more of them, people who want them now have to pay more.

pickledmuffin
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August 02, 2018, 10:25:43 AM
 #39

If Bitcoins aren't tied to a conventional currency, how did they get so valuable?
Good question! When the bitcoin network was first created in 2009, bitcoins were barely worth anything. Bitcoin lore holds that the very first real-world bitcoin transaction occurred in May 2010, when one early bitcoin user paid another user 10,000 bitcoins for two pizzas. At the time, bitcoins were trading for less than a penny each.

Geez! I hope the user who paid 10,000 Bitcoins for the pizza did well out of Bitcoin (no doubt they did), otherwise they would be in the Bitcoin regret forum. Huh
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August 02, 2018, 10:41:27 AM
 #40

If Bitcoin is associated with a common currency, I think at that time the value of bitcoin would not be as volatile as it is today, and it is likely that the bitcoin value will increase sharply because only to 21 million Bitcoins
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