Bitcoin Only Backed by Faith?

Faith in the Digital Age

I keep hearing the argument that bitcoins only have value because people believe they have value. They state that a bitcoin is worthless by itself – the only reason it is worth something is because of some magical belief system that people can not prove.

However, it has so much applicable utility in digital (and non-digital) international finance. It has value because of its’ utility not because people “believe” it is worth something. It has value because it provides most of the same services as banks, CC’s & treasuries and so much more. It has value because it provides business opportunity for miners, developers, financial professionals, etc… It has value because if you steal it from someone (in a modern country) and get caught then you will face legal punishment!

It is not valuable just because people believe it is valuable.

That would be like stating that automobiles only have value because people believe they have value. People believe automobiles have value because of their utility. They provide for detached transportation unlike the prior train services. If automobiles did not have any utility, then they would not have value. There are some obvious exceptions to antique collectible automobiles. The same argument applies to Bitcoin. Bitcoin has an intrinsic value because it is a mechanism to move value from any two points on the internet nearly immediately.

Alt-coins

An argument might be that an alt-coin provides the same services as Bitcoin. However, how stable is the the alt-coin? There are no alt-coins that have the market capital as high as Bitcoin. If you wanted to buy $100,000 worth of an alt-coin, the price would probably triple and then many people would dump the coin and you would not be able to sell the coins for the same price that you paid for them. If you bought $100,000 worth of Bitcoin, you have some assurance that the price of your bitcoins should remain near what they were when you bought them – the price wouldn’t be impacted too much because of the purchase. Also, what is the security of the alt-coin? There are no alt-coins that provide the level of security that Bitcoin provides. Overall, there are currently no alt-coins that provide the benefits that Bitcoin provides. If an alt-coin has some new and improved feature that Bitcoin does not have, then the Bitcoin protocol can be updated to acquire the feature. If the feature is in a different family as Bitcoin, then possibly the new alt-coin would provide a different set of services than Bitcoin and the market would allow for both of them. The world of crypto-currencies is in its’ infancy and it is the next era of technological evolution.

  • ISeeSheeple

    “[Dollar bills] only have value because people believe they have value. They state that a [dollar bill] is worthless by itself – the only reason it is worth something is because of some magical belief system that people can not prove.”
    See what I did there?