Originally Posted by lacrossewacker
So who or what establishes the value of a bitcoin? The buyer? The seller? An economy? Supply?
The reason I'm questioning the value of the bitcoin is that I don't see how it actually leads to anything. So what, I purchase a bitcoin? Can I eat it? Can I purchase something with it? What's the incentive for somebody else to sell something for a bitcoin? What will they do with the bitcoin? Sounds like some rebellious means to just be different or some "out of the system" thing.
The value comes primarily from the various exchange sites. They don't set the value, the value is set by all the individual traders. In that sense, the value of bitcoin is treated exactly the same as any currency on the ForEx.
The only difference is, there is no central governing body for bitcoin, like there is for international currencies, that can shut down trading at any time if they don't like where its headed.
But that's the major value of Bitcoin is that nobody can control it. Nobody can take your coins away from you, or freeze your accounts, or prevent you from trading. Bitcoin is the first currency that is truly for the people, by the people. It's controlled by a massive p2p network, that cannot be influenced by third parties or governments, or would-be-attackers. It brings a freedom that doesn't exist in any other currency.
Bitcoin represents the first time in the history of the world that any two people, anywhere in the world can freely exchange money without going through a third party like a bank or a credit card company.
Before Bitcoin, credit cards pretty much have a stranglehold on the world, because that is the primary method of purchasing things online. And as online shopping continues to grow, so does the power of the credit card companies. Bitcoin lets the people freely trade and exchange goods for money, without putting someone into debt.
It doesn't take much to see that there is an incredible value in that.Edited by wedge - 7/30/13 at 8:21am