3 Reasons Why Bitcoin Has Value
Time and time again, I am asked the same question: “Why does Bitcoin have value?” I have heard plenty of poor responses which would enrage the likes of Peter Schiff and traditional asset managers, yet, to me, the answer has never been more apparent. Let me clarify my position:
- The limited amount of Bitcoin and predictable inflation methods are essential factors, but they don’t define the value of Bitcoin. Bitcoin has been and will continue to be, Forked. And it can be broken down into tiny increments which can dilute purchasing power. Also, every time Bitcoin is used, users must pay fees which further weaken the total value.
- Bitcoin is digital gold. Wrong. The idea of digital gold is excellent, and there is certainly a use for it; however, Bitcoin is not digital gold. Gold does not lose 90% of its value every few years. Will Bitcoin eventually stabilize? Yes, it will. We are still in the early stages of Bitcoin, and with every new asset class, wild swings of value are inevitable. But, again, Bitcoin will stabilize.
- “It’s based on technology, not the Federal Reserve.” Lame reasoning! Like it or not, the United States has become the wealthiest nation in history while still under the control of the Federal Reserve. Is this wealth fake, and propped up by the most massive scam in history? Yes, but we cannot deny that the Fed, and the US government, have been somewhat successful in attempting to control the downfall of the US economy. Bitcoin is the ultimate enemy of the Fed, but this digital asset, is outside of the Feds control, but it doesn’t give Bitcoin value.
The above points are valid, and they do help give Bitcoin power and purpose; however, they do not provide Bitcoin its value. Bitcoin has value because it gives anyone with a cell phone the ability to control their own financial situation.
What do I mean by that? Bitcoin is the ultimate, censorship-free, universal transfer of value. Give me a Bitcoin address, and I can change your life. If two individuals who live on opposite sides of the globe want to transfer Bitcoin to each other, they can. End of story. There are no rules, there are no restrictions. Bitcoin cannot, and will not, be shut down.
On the other hand, if you want to send money to refugees, yet your home country doesn’t allow outgoing wire transfers to certain nations, you are out of luck. If you want to send money to family members in developing nations, you can, but it will take days and cost you as much as 25%. If you are a private individual, politician, or business, which payment processors deem to be unfit for their platforms, you are fucked — your business is ruined, and you are financially finished.
Bitcoin has value because it allows for the transfer of value in a private, fast, and inexpensive manner, and no one can control it. Just post your address, and anyone in the world can send you Bitcoin — no middlemen, no censorship, no outrageous fees, and no paperwork. Now, I can hear the critics already: “Bitcoin isn’t cheap,” “Bitcoin isn’t private.” True, but this will soon change. I believe in Bitcoin, and I am supportive of projects that aim to improve Bitcoins’ core functions! It is not perfect, but many people are working to strengthen its undeniable flaws, and I am confident that we will work out these problems within the next few years.