The Argument Over Bitcoins Value

As Bitcoin continues to surge up in price people are starting to take note, people who aren’t running inside the crypto circles and they’re asking themselves, why is the price of Bitcoin so darn high. It’s far beyond the yearly salary of a large part of the world, so how the hell can one person justify a year’s salary after tax stuffed into random numbers backed up on a distributed database.

As a Bitcoiner myself, it doesn’t make a lot of sense when you think about it like that, but I want to look at what is value and why I think it has value.

Toss out the ideas of stock to flow, and buyers and sellers and all that economic data we normally focus on, I want to focus on the value Bitcoin can and will bring that validates why its price will continue to surge in the coming years.

Fiat money has no price discovery.

In a hard money system if you imported too much your currency would go down, and you’d curb your importing, the same would be for exporting, demand for your currency goes up, the price goes up, demand levels off.

When we moved to a fiat money system where anyone can create money out of thin air, markets started to function irrationally, misallocation of capital started to appear, currencies wanted hard pegs like the Hong Kong Dollar or the Yuan and so on, same with Swiss Frank and the Euro.

Having an uncapped money supply means you can jink the system, you can distort prices you can make artificial markets, and without price discovery, you cannot have true markets.

Bitcoin is price discovery; the price you see now is the price you pay. You can’t create it at will to match demand, if demand increases prices skyrocket this slippage keeps markets more honest as people tend to not want to overpay for things.

Money was never this scalable.

Now with Bitcoin, we have global money that can be sent across borders in an instant without a middle man at any time. As someone who has worked for foreign companies, I can tell you the pain of earning in Forex or having PayPal scalp a lot of your earnings through fees.

It’s archaic and antiquated and was due for an upgrade.

Bitcoin has no industrial use or intrinsic value.

This is why I see Bitcoin as better than gold; it can only do one thing, protect your purchasing power and so far has done it pretty well.

Bitcoin’s value comes in the form if it can store your wealth, it cannot be confiscated, and you can move it around the world as well as its growing acceptance around the world.

I can go to any country an exchange Bitcoin without issues, try taking your local currency to another country and see if you can exchange it at a market rate.

Bitcoin is energy stored.

Miners aren’t willing to sell at a loss, and their profit margins are what help set the floor for the Bitcoin price. To create a new Bitcoin costs money, labour and energy if that doesn’t give it value what does?

Fiat money used to cost money to create when it was largely printed, and the central bank pocketed the profit as this is known as seigniorage. The profits have become huge because only 3% of global money is physically created, and most are only accounting sitting on various databases of banks.

Due to this ease of money, creating it means fiat money has no value only belief, debt slavery and government laws ane enforcement.

Bitcoin is monetising the value of the internet.

Bitcoin allows us to be able to consume based on usage and not on pay walling services and charging a fee because you’re a monopoly. I’ll give you an example if you’re bidding on keywords via Google Ads; Google sets the floor price, they match the bids, it’s by no means a free market of bidding, it’s all held within their systems.

If no one was bidding for a keyword, I should be able to set the bid like I would in any market. In a real-life example, an Uber ride is set based on Uber’s algorithms and business needs, in Bitcoin, we could charge based on the expense and only pay for what you consume to the final centimetre.

This creates effect markets and thus provides a wealth of optimisation and cost-saving that can be passed on to the consumer. Its cost-savings are then passed on to to the value of Bitcoin due, the deflation of the service means you Bitocin goes further, giving your Bitocin more value.

Blowing hot air with the thin air argument

Source: Leofinance

Co-founder of nichemarket, a South African Business Directory and digital marketing agency —