Why would one pay $7K for Bitcoin if he/she can get the same thing for $0.001?

[antikvark]

Imagine that Motorola company, sells its new smartphone for $1.000.000.000, while in the same time similar Huawei or Xiaomi smartphones are priced at around $1,000. Such scenario would be crazy because no one would give a million times more money for a product that has essentially the same features as alternative products. That is why the above scenario is not possible in reality.

But... in the crypto world, such scenario is exactly what can be observed.

In the crypto world people are paying a million times more for bitcoin than for alternative coins, even though these coins essentially have the same features as bitcoin. Functions and features of cryptocurrencies are pretty straightforward. Elimination of expensive brokers, lawyers, and other typical “middlemen”. Low transaction costs. Transactions are transparent, quick, permanent, and hard to fake. Cryptocurrencies that are priced below $0.001 have all these functions and features. But, the previous media attention and hype created a situation where people pay thousands of dollars for bitcoin. They pay a million times more for bitcoin than for alternative coins.

Of course that being the first in the industry and having reputation means something. For example, Motorola was first in the mobile phone industry, has good brand reputation and consumers trust it. For that reason they might pay more for some Motorola phone than for the same feature Huawei or Xiaomi phone. But, no one would pay a million times more, since phones are just plastic, metal, glass, chips, resistors and transistors put together.

The same is with cryptocurrencies. They are just addresses, numbers, databases, and protocols that enable the elimination of middlemen, low transaction costs, immutability, anonymity, transparency and traceability of transactions. In that sense, bitcoin is equal to thousands of other cryptocurrencies. It is the same thing with different name. Accordingly, no rational reason exists for bitcoin to cost millions times more than an average coin. There is no reason for people to enter into fast, transparent and cheap payment system for $7,000 if they can enter it for $0.001.

Once the hype is gone, Bitcoin will simply go down to the price of an average coin and settle around $0.001.

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[gentlemand]

Bitcoin is the oldest, most secure, most tested, best developed, best distributed, most decentralised and most trusted.

A 1 cent alt is none of these things. It's a bit of code cut and pasted in a few seconds. You can't know how secure it is, whether the miner (s) will roll back your transaction or whether what's in your wallet will even be movable in a few weeks. There are plenty of dead coins.
 
The thing that gives Bitcoin its value is confidence and trust. That takes years to build. You can't buy it. You can't fake it. It can only be earned.

Forget transaction times and so on. That's nothing but tinsel. If not enough people trust it it's going nowhere.

[Carlton Banks]

Imagine a $0.001 cryptocurrency, then imagine some miners holding up a $1.00 cryptocurrency.

You don't have to imagine the next part, if the single-celled organism you call your corporeal form is a brain cell: the miners from the $1 coin eat the entire $0.0001 blockchain, spit it out without even chewing, then tell all the holders they now have a grand total of zero coins.

Imagine someone who doesn't even know this in nigh-on the year 2020

[romero121]

Here I would like to make a question. Why should you have a comparison of bitcoin against low price altcoins. Why can't you have the comparison to be made with ethereum, because there are altcoins that are priced less than $0.1 while bitcoin has a value higher than $150. If your mind knew it, then you've got the answer for what you've asked

 Just think bitcoin is priced $7000 while another altcoin is priced $1. You buy 7000 coins on the altcoin and a single bitcoin. There is growth of 1%with bitcoin and 1.2% with the altcoin. Now the bitcoin and altcoin is opened for trading. The bitcoin is opened for a sell trade and sold while the altcoins hasn't got executed. Suddenly there is drop on the growth which gets deflected on bitcoin and altcoins. As bitcoin has got sold it is possible to buy it again for lower price while altcoin remains unsold and now once again it needs to be kept till growth happens.

This way liquidity, trade support and on various other things it isn't easy to reach close to bitcoin. This is where bitcoin gets the highest preference than rest of the altcoins.

[qwk]

You're asking the wrong question.
The real question should not be about utility, but about value.
Value, and that's a scientifically established fact in economics, is not based on utility at all, but on supply and demand.
There's simply no causal link between utility and valuation.

In fact, it's understood in monetary theory that utility actually decreases with valuation when it comes to a medium of exchange, a.k.a. money.

[BitcoinGirl.Club]

Okay OP,
I was lazy and wanted to find some answers for you from my bros and here are some I managed to get for you.

Anyone interested to answer this stupid?

pass.... i just talked with my relatives already.

<snip>

https://youtu.be/UG7zLhEWanc

"I'd settle for a Dogecoin, I'm so desperate!" LOL! 

This worth listing for you.

Nope. Highly opinionated self righteous noobs can learn from their own damned mistakes.

His verbiage is very like 'another' troll we had on this thread a while back, can't remember the name because boomer.
https://bitcointalk.org/index.php?topic=2889909.0
maybe that twit not sure don't care where's my slippers

I am sure more will be coming on your way but I give up however before I go here I have something for you.

[CryptoBry]

But... in the crypto world, they are possible. Take for example bitcoin. People are paying thousands or even million times more for bitcoin than for some altcoins, even though these coins have the same or better utility than bitcoin. Meaning, the same as bitcoin these coins can be transferred easily, fastly, cheaply, safely and transparently to someone. Such coins can be bought for as low as $0.001. Why people in the crypto world pay millions time more for the same thing? Why they behave so irrationally?

In the world of business and branding, why people are paying big bucks on luxurious labels, for example a designer bag when the same utility of a bag can be bought elsewhere for just a dollar maybe? Why in the world of paper money, there are currencies that cost much when all of them are just made of paper? And yeah, why would people watch a movie of a famous movie star when they can just watch another movie of an unknown starlet when both are movies? You see all of these questions can be answered by another questions...

[Kyraishi]

Imagine an electronic producer that pays $10,000 for 1 gram of gold, while in the same time a metal with better electrical properties costs less then a cent.

Imagine a buyer who gives his 5,000 square foot luxury mansion for 10,000 units of fiat money that bank created with only Kia Pride vehicle as a collateral.

Imagine an investor that pays $1,000 for a stock with a book value of $1 and earnings of $0.01, while in the same time he can buy a stock with a book value of $2,000 and earnings of $500 for the same amount of money.

Imagine a guy that pays $1,000 for the Cheeseburger while in the same time he can get the Big Mac for only $1.

The above scenarios would be crazy because no one would trade his thing for something that has thousands or millions time less utility. Nor would someone pay a thousand or a million times more money for the same or even worse thing. That is why the above scenarios are not possible in reality.

But... in the crypto world, they are possible. Take for example bitcoin. People are paying thousands or even million times more for bitcoin than for some altcoins, even though these coins have the same or better utility than bitcoin. Meaning, the same as bitcoin these coins can be transferred easily, fastly, cheaply, safely and transparently to someone. Such coins can be bought for as low as $0.001. Why people in the crypto world pay millions time more for the same thing? Why they behave so irrationally?

You forgot a couple very important features to bitcoin, and it's the first of it's time. How many companies have you seen that have been first to the market, haven't really innovated, and often times, screwed over their own customers, but have still remained on top.

Just look at examples like PayPal, who no longer offer a unique service, but instead they overcharge for the same service a lot of other payment methods give out as well, but they are still the most used payment processor.

[electronicash]

the difference of the cryptocurrency will matter in the end. you might think cardano is better or eth has better usecase and will have more demand in the future and then you will question why use BTC when there is ETH.  there are tons of us who thinks the same way but then understanding decentralization and security of bitcoin's blockchain will make you realize there is more to BTC than all the others created after it.

[shield132]

Imagine an electronic producer that pays $10,000 for 1 gram of gold, while in the same time a metal with better electrical properties costs less then a cent.

Imagine a buyer who gives his 5,000 square foot luxury mansion for 10,000 units of fiat money that bank created with only Kia Pride vehicle as a collateral.

Imagine an investor that pays $1,000 for a stock with a book value of $1 and earnings of $0.01, while in the same time he can buy a stock with a book value of $2,000 and earnings of $500 for the same amount of money.

Imagine a guy that pays $1,000 for the Cheeseburger while in the same time he can get the Big Mac for only $1.

The above scenarios would be crazy because no one would trade his thing for something that has thousands or millions time less utility. Nor would someone pay a thousand or a million times more money for the same or even worse thing. That is why the above scenarios are not possible in reality.

But... in the crypto world, they are possible. Take for example bitcoin. People are paying thousands or even million times more for bitcoin than for some altcoins, even though these coins have the same or better utility than bitcoin. Meaning, the same as bitcoin these coins can be transferred easily, fastly, cheaply, safely and transparently to someone. Such coins can be bought for as low as $0.001. Why people in the crypto world pay millions time more for the same thing? Why they behave so irrationally?

With that logic also consider this two example:
1. Imagine a buyer that pays 1000$ in Gucci's sunglasses while he/she can buy absolutely same quality/design glasses in 20$ and lower.
2. Imagine a buyer that buys Apple iPhone 11 Pro Max instead of other cheaper alternatives and in reality he/she doesn't use 90% resources of smartphone.

Don't you think that name also matters too? Brand <-- it's a huge advantage in selling when when you already own this status.
But bitcoin isn't just a thing, it's currency and people look at it as an investment option like stocks for example, that's what makes bitcoin to worth 7000$ and more, also there is mining difficulty factor, in order to make mining profitable, we need higher price.

[DannyHamilton]

Take for example bitcoin. People are paying thousands or even million times more for bitcoin than for some altcoins

Correct.

even though these coins have the same or better utility than bitcoin.

Nope.

There is no altcoin in existence today that has "the same or better utility than Bitcoin".  You are mistaken.

Meaning, the same as bitcoin these coins can be transferred easily, fastly, cheaply, safely and transparently to someone.

Some can be transferred faster, some can be transferred cheaper, some can (perhaps?) be transferred more safely, some can be transferred with more transparency, some can be transferred with more anonymity.  However, NONE are able to match ALL of the features of Bitcoin.  Whenever they are better than Bitcoin at ant one thing they are worse than Bitcoin at others.  Most are worse than bitcoin at the things that really matter (such as security), and better than bitcoin at things that don't matter as much (such as blocksize).

Such coins can be bought for as low as $0.001. Why people in the crypto world pay millions time more for the same thing?

Because it is NOT the same thing.

Why they behave so irrationally?

The behave VERY rationally.  Your failure to see the difference doesn't mean that the difference isn't there.

[1Referee]

I always found it funny to see people state that altcoins have more utility. If people actually cared about altcoins with utility, they would use them instead of dumping their coins the moment they see Bitcoin go up.

The only utility Bitcoin doesn't have but altcoins do, is that altcoins work as leveraged instruments due to their low liquidity, which traders exploit to accumulate satoshis faster. If you ask people why they trade altcoins, most will confirm that they just want to grow their Bitcoin position. They do not care one bit about altcoins.

[DreamStage]

Bitcoin is more reliable, more secure and trusted overall than any other alt coin.

It has more technologies involved, more real life investments and applications.
Even on real life payments systems you don't see alt coins rather than bitcoin transactional payments.

Alt coins are a growing bitcoin as a child and takes lessons from his father (Bitcoin).
Think of it as Bitcoin Cash or any other forked coin.

[dimastegar]

But... in the crypto world, they are possible. Take for example bitcoin. People are paying thousands or even million times more for bitcoin than for some altcoins, even though these coins have the same or better utility than bitcoin. Meaning, the same as bitcoin these coins can be transferred easily, fastly, cheaply, safely and transparently to someone. Such coins can be bought for as low as $0.001. Why people in the crypto world pay millions time more for the same thing? Why they behave so irrationally?

Why should I pay for shitcoin if Bitcoin has proven to be better than other coins. People in the crypto world are willing to pay dearly with their money for Bitcoin, because they know getting Bitcoin is not easy. And besides, have you ever imagined the difficulty of being a Bitcoin miner if every 4 years Bitcoin experiences halving that makes their mining rewards halved per block. And so on.

[Finestream]

Bitcoin move based on its supply and demand and the fact that it reach at $7K or more, that shows how big the demand is.
This is a very different asset or technology on what you compare, this is bigger and has real use case where everyone can benefit using on it.

at $7k now, I still think its undervalued.

[Bitcoin_Arena]

It's quite absurd that you are trying comparing bitcoin, the God father of cryptos to shitcoins that were minted out of a thin air just yesterday with false hope instilled by the developers to the ignorant sheep that the prices will one day "moon" just like bitcoin  did and that they will be millionaires  

My friend stop dreaming, the online direction most of those shitcoins are going i towards $0. Wake up and join the bitcoin movement.

[pooya87]

before you ask this question from others you yourself should answer an important question explaining why you think there exists some altcoin (which i assume you already have one specific one in mind) that is the "same thing" as bitcoin?
my guess is that you haven't used that altcoin or probably fallen victim to the advertisers selling that coin to you to get it pumped. try to look under the hood instead of judging the altcoin by the "cover" and see why it is inferior.

[Reid]

And what altcoin would that be?

Yeah let us do some comparison here but let us not go with full "imagination".
Too much "imagine" word in your world.  

Let us say I bought an Iphone and then you bought some cheap China phone.
Both are created in the same country but the price are way far from each other.
An Iphone at $1000 while your cheap unknown China phone is at $100.

What will you buy?
Ain't that just the same as your comparison?
Trust, reliability, name, and a lot more. It gets more value because of that.

[MURONDI]

bitcoin is the main crypto, which was popular before the appearance of altcoin, I'm sure almost all crypto players have bitcoin even if only a little, because bitcoin is the oldest, most popular and trusted crypto.

[antikvark]

All responses to the OP are essentially the same, and all are beside the point.

Of course that people will pay more for branded or initial products. But not thousands or millions times more. No one would pay $10,000,000 for Gucci's sunglasses if he/she can buy absolutely same quality/design glasses for $10. No one would pay $100,000,000 for some Motorola phone just because Motorola was the first in the mobile phone industry, if he/she can buy a mobile phone with the same features for $100.

Functions and features of cryptos are pretty straightforward. Elimination of expensive brokers, lawyers, and other typical “middlemen”.  Low transaction costs. Transactions are transparent, quick, permanent, and hard to fake. Cryptos that are priced below $0.001 have all these functions and features. So why would one pay $7,000 to have features that he/she can have for $0.001?