Is a bitcoin worth anything
We accept that a dollar, euro, or yen is valuable because, throughout our lives, they have been. But take a step back and ask the same question about those currencies. Could you explain why they have value? Do you actually know how fiat currency markets work? If you had blinders on and were told you had the option of holding a money that could be printed at will or one with a hard limit, which would you choose to own?
Indeed, bitcoin isn't yet as widely accepted as the dollar, but then again, it hasn't been around nearly as long. As people become more familiar with bitcoin, we believe they will quickly recognize that it is superior money.
We value goods as money if they exhibit specific, tangible properties. The six characteristics1 of sound money are: Durability - Produce makes for poor money because it spoils. Portability - Cash is easy to carry, but gold can be physically taxing to transport in large amounts. Divisibility - U. Fungibility - A dollar is a dollar, but one barrel of apples could vary significantly in quality and quantity from another barrel.
If a currency isn't fungible, every transaction requires an audit. The easier it is to find or create a good, the less value it has. Money needs to have a limited supply to ensure that its purchasing power will remain stable. Acceptability - If a money fulfills the first five criteria, the more likely it is that people will use it.
The more people that adopt a currency, the easier it will be to spend. How credibly a good displays these characteristics will determine if it can fulfill the role of money. Clearly, a good doesn't become a currency out of a collective hallucination. Instead, people have continually adopted new monies based on how well they function as such. So long as the blockchain is maintained on even a single computer, Bitcoin exists. A bitcoin user who has memorized their private key literally carries their bitcoin with them wherever they go.
No coin is any more valuable than the next one. Unlike with gold or paper currency, counterfeiting is impossible. There will only ever be 21 million bitcoins. Bitcoin combines the hardness of gold with the portability and fungibility of fiat and comes built for the digital age.
Its supply is strictly regulated by its code and enforced by those who use it. Bitcoin can be sent anywhere in the world in seconds without incurring the prohibitive costs so often charged in the traditional financial system. Would a new protocol that looks and feels like Bitcoin have the same monetary properties? Yes and no. Certainly, the new Bitcoin would ostensibly act like the original, but it would lack something that can't be programmed: credibility.
Lewis explains why there's more to money, specifically digital money, than just satisfying the six characteristics mentioned above. Lewis argues that Bitcoin's code isn't money, in and of itself. What makes Bitcoin sound money is that its rules have been dependably enforced for well over a decade. According to CasasciusTracker , the majority of the tokens were still wrapped up. As of 12 May , there were 19, active coins, compared with the 8, that had been redeemed.
In reality, there is almost certainly far, far more. Physical bitcoins: Worth more than they hold? One of the many interesting things about physical bitcoins is their value. You would expect a material version of the crypto to be worth what the crypto is worth itself, but because of the comparative rarity and the collectability of the physical coin, it is often worth more. This is especially true if and when a range stops being minted.
The item sold to a private bidder. While the actual sale price was not made public, it seems fair to assume that it could not have been too much below its listed value. The fact that the seller could list what is, ultimately, a set of worthless aluminium disks for such a high price says something about the numismatic value of the tokens. Alitin Mint and other physical bitcoins Although the Casascius collection is probably the best known physical crypto, there are others.
For instance, Alitin Mint , based in Springfield, Missouri, made two coins. One featured economist Adam Smith and was loaded with two bitcoin and the other featured Joan of Arc and came loaded with one bitcoin. A total of coins of each kind, which were designed by sculptor John B Andelin, were minted in and they retailed for 2. What is notable here is, of course, the mark up for the physical object.
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