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Where the heck does crypto currency gets its value

Discussion in 'Payment Processing' started by Sugavanas, Mar 21, 2014.

  1. #1
    So I have one curious questions,
    Where the heck do this crypto currencies gets their value for real money ?

    I have understood everything about them and except the thing that how could they get value. It is a online currency and it's now even used to by physical products.

    How did bitcoin come into circulation ? Did the fonder of bitcoin had invested his own money to first get the value for btcoin ? As people pay real money for some online currency which is not added by the goverment, is it legal in all countries ?

    And one last question which is the stupidest one, If bitcoin is something digital, then why do they need to mine them to solve the mathematical problems ? Can't they just get it running wihout having the complexity ?
     
    Sugavanas, Mar 21, 2014 IP
  2. Investophant

    Investophant Greenhorn

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    #2
    Here's my short answer: It has value, if people agree it has value.

    The reason Bitcoins are worth hundreds of dollars each is because people agree the TECHNOLOGY behind the CURRENCY is immensiely valuable, and thus agree it (the currency) has value.

    In my opinion, a better thing than currencies such as the US dollar which has no value really. It is simply forced upon us, cryptos aren't. Yet they have value, so they are considered valueable democratically.
     
    Investophant, Apr 2, 2014 IP
  3. Asso

    Asso Well-Known Member

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    #3
    Money value is in trust , if you belive that you can buy goods with that currency that menas that you trust in that currency.
     
    Asso, Apr 16, 2014 IP
  4. AGTBB

    AGTBB Greenhorn

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    #4
    The complexity involved in mining enforces a floor in the value of Bitcoin at least to to the degree at which mining hardware is specialized now. With some of the newer crypto things that can still be competitively mined with off the shelf GPUs, this is much less of a factor.

    Other than that the big factors providing value to Bitcoin is the scarcity of the things and the diversity and maturity of the markets denominated in it. Any thing sufficiently scarce can become a store and exchange of value if markets develop. Whether it is gold ancient Judea or Jolly Ranchers in prison the combination of scarcity and diverse markets can provide anything with this type of value.
     
    AGTBB, Apr 16, 2014 IP