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Is Bitcoin actually worth anything? (lemmy.ml)

submitted 6 days ago by oxjox@lemmy.ml to c/asklemmy@lemmy.ml

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I get that anything is worth whatever someone is willing to pay for it. That's besides the point. My point is, beyond speculation, what do crypto coins represent?

I also understand that the value of the US dollar is being questioned almost as much without the backing of gold.

But what I really want to know is what is at the foundation level of Bitcoin that people are buying into?

I have a basic understanding of the blockchain, etc. I sold 1BTC in 2017 for $1200 when I thought that was as high as it would go. At this point, at over $100kUSD and rising steadily, what is the $ limit and what is that limit based upon? I thought it was based on the value of mining to check transactions but this seems... not worth $100k to me.

I've been thinking, the only tangible value I personally see in Bitcoin, because it's not really being used as legitimate currency, is for criminals. By now, there must be trillions of dollars in BTC acquired by criminals holding corporations hostage. When you've got people like Trump involved (either explicitly or by way of manipulation) with an executive order to establish a crypto czar, this suggests to me that he's creating pathways for bad actors to more effectively gain more wealth. These are the people who are most excited in Bitcoin, beyond speculation.

I mean, there's little to nothing on the up and up with crypto, right? It's a scam. Right?

Please, factual answers only. I'm looking for someone to dispel my speculation with genuine economics of the matter.

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[–] ThanksForAllTheFish@sh.itjust.works 4 points 5 days ago* (last edited 5 days ago)

I guess it's more useful as a store of wealth than a currency. Like gold it can be transferred irreversibly between owners, except now the transfer and storage costs are significantly reduced and it's available to the general public as an option. The key benefit is the use of the internet as a transfer medium, you no longer have to rely on a third party to facilitate the exchange, which for most large transactions means paying someone to transport it and store it (lawyers, guards, banks).

It does allow for easy exchange for all users, including criminals, but generally using it for crime is a terrible idea, as every member of the network can see all transactions. Bitcoin is more of a notice board about what addresses have what amounts, and if you can prove to the people that post on the notice board that you control an address, you're allowed to spend the contents and update everyone of where you sent it.

People came up with an idea for how to do chargebacks, it's called an escrow service, a third party that holds the money until all parties have had a chance to raise a dispute and confirm they are happy. This is the same as how PayPal works, trust based on reputation of the escrow provider, and the escrow provider is payed a fee. It's just that now with bitcoin, you also have the option to complete the transaction online without an escrow provider, the same as you would in person with cash.