There's no doubt that BTC is one of the most sought after cryptocurrencies on the market. But why? Find out below.
Bitcoin derives its value from a variety of different attributes. Ultimately, both crypto and fiat currencies have value because of trust. As long as society believes in the fiat system, money will continue to have value. We can say the same for Bitcoin: it has value because users believe it does, but there is more to consider.
Although there are remarkable differences, BTC, as a digital form of money, shares some similarities with the fiat money we are all used to. So, let’s discuss first the value of fiat money before we dive into the cryptocurrency ecosystem.In short, what gives money value is trust. Essentially, money is a tool used to exchange value. Any object could be used as money, as long as the local community accepts it as payment for goods and services.
have some things in common with our standard idea of money, but there are some remarkable differences. Although some crypto like PAXG are pegged to commodities like gold, most cryptocurrencies have no underlying asset. Instead, trust once again plays a significant role in the value of a cryptocurrency. For example, people see value in investing in, knowing that others also trust Bitcoin and accept BTC as a payment system and medium of exchange.
Stocks also have intrinsic value, as they represent equity in a company producing goods or services. In fact, many investors performin an attempt to calculate an asset’s intrinsic value. On the other hand, fiat money has no intrinsic value because it’s just a piece of paper. As we’ve seen, its value derives from trust.
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