Wednesday, 28 June 2017

Bitcoin and its mysterious value

With the market value of Bitcoin diving down from its mighty record high of over $3,000 to a still seductive $2,500, enthusiasts as well as infidels are pondering if bubble of speculation Bitcoin had been in for the longest of times has finally popped for once and for good, or, if the freshest of downturns is just, yet another gimmick perpetuated by a group trying to influence a market in order to profit from it. 

It must be said that, what the Bitcoin market was stuck in was definitely a speculative bubble; as supply runs that aren’t open for discussion, are stilted to softwares, run away towards a much bigger dunce demand. As dunces much more mighty than the ones that preceded them disrupt and displace their predecessors, all the people involved, dunces or not, hone in on a main thing, a principal question: Why are Bitcoin something valuable?

Adam Smith’s economic theory, his idea of the unobserved influence of supply and demand reason away into the answer for the market value of Bitcoin; a market value is nothing more than what an economic agent deems worthy of paying a specific amount in exchange for something else. So the willingness seems to be the answer this examination leads us down if we present to it the quandary of what gives Bitcoin value.

But, how does Bitcoin become a good parallel to gold or real-estate? Things that possess an inherent value in what they bring to everyday life. Those things are of use in the real world, so to simply attempt to rationalize it all in the same way would seem futile. Unlike land or real-estate-properties, Bitcoin is something we can’t farm on or live in, and unlike gold it can’t be converted or embedded into things for a high end decorative purpose either.

In many countries Bitcoin trade is another natural dimension of the economy now. In India companies like Bitxoxo have established themselves appealing to people who buy Bitcoins in India as a Bitcoin exchange in India offering the best Bitcoin rate, so this impossible question might  be of interest of some people as we head off into the future of cryptocurrency in global economy.

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