Before you proceed with the reading, bear in mind that these are all product of my own understanding, should you have some additions and correction, I would love to here of them in the comment section.
Do you ever wonder where bitcoin gets its value? I have thought about that too and so I went on a search to find out how. Let me share it with you my personal understanding of how Bitcoin get its value.
So how does a bitcoin get its value. To help us understand the concept behind a currencies' value, let us look back to the time when currency was on its initial stage. Way back, a currency is not made out of a specific metal like the one that we have now, people used other things as a form of currency like cacao beans, salt, gold and many other. Those things were deemed valuable because the majority of the people agreed that it is truly valuable. For example, Ancient Mayans when they discovered that they can make chocolate out of Cacao beans, cacao beans are then deemed valuable. The Mayans would then buy cacao beans and in return they would use that to buy other basic commodities like flour or clothing. As time passes by, people learned how to grow cacaos and because every person now has his own cacao beans to make chocolate, if someone would come up to him and ask if he can trade his chickens with a sack of cacao, he would refuse because he has a barrel full of it. In those times another things was found to be valuable and that was salt, it became another currency of the time, it went on the cycle until its value depreciated, replace by another thing that is of high value like gold and other metals and until such time when we reach the point where the value of something is no longer determined by a thing's usefulness, the value was then predetermined by the government and a currency is made and regulated by a central authority- the bank.
The money that you have in your wallet is not valuable because it can be eaten or because it is a lifesaving agent or because it is very useful, no. The money that you have right now has value because the government said so and we the people agreed to it. A value of a currency is determined when there is a consensus among the people who possesses it. And so, it is with crypto, so it is with bitcoins.
Bitcoins has its value because we agreed that it is valuable due to its border less and transparent nature-something that can't be found in the fiat currency. Another thing that caused bitcoins value is it scarcity. Remember that Satoshi created only 21 million bitcoins and it is believed that the last bitcoin will be mined by the year 2040. That scarcity of its supply is also a value driver. We can arrive at a notion that the lesser bitcoin left unowned the higher the value it will have-much more like gold, ight? Wait, how much gold you think there is in the whole wide world? I am really wondering.
The greater number of people understands and realizes the efficiency of the system that Bitcoin is built upon and the more the masses uses it- the more the tendency for its price to hike up! On my own perspective, when you share to someone a site that gives out cryptos you increase the possibility of it being more well known by the larger public. I will take myself as an example of that. When my friend introduced me to noise.cash, I did know what a bitcoin is, I have heard of it yes, but I don’t have an idea as to what it is and how it works. All I know is that I get a little some of money by interacting. Now when I was introduced here in read.cash, I saw so many good articles about bitcoin and the like that caught my interest, and then that is how it all started, I then became acquainted with the world of crypto currencies and for me, despite its volatility, it is very exciting.
So, what do a man does when he finds that the fruit that he is eating is the yummiest ever? He shares it right? The more we announced the advantages of bitcoin, the more it will accrue value.
That's it for now folks! Hope I shared something good!
An interesting perspective and I can't say I disagree with it.