When you understand that money in a regular bank is just a number on a database, bitcoin becomes just another currency... just another number.
There used to be an age when the money available to banks was related to the amount of actual valuable metal (or other commodities) that the bank possessed. The money we used, coins and bank notes, were backed by something that was actually worth something.
Nowadays, our bank notes are backed by promises of future profits... and last 2008 we saw just how feeble that system is. And it's heading there again.
What makes something valuable?
What makes money valuable? The fact that everyone agrees to exchange it for goods? That some goods are valued a particular amount, others are valued at another amount, and so on and so forth.
Bitcoins are being valuable because some people are interested in them... they attributing value to them. As long as someone is willing to exchange regular currency for bitcoins, they will be valuable. As soon as people stop that, bitcoins will become like credits on an online game.
There used to be an age when the money available to banks was related to the amount of actual valuable metal (or other commodities) that the bank possessed. The money we used, coins and bank notes, were backed by something that was actually worth something.
Nowadays, our bank notes are backed by promises of future profits... and last 2008 we saw just how feeble that system is. And it's heading there again.
What makes something valuable?
What makes money valuable? The fact that everyone agrees to exchange it for goods? That some goods are valued a particular amount, others are valued at another amount, and so on and so forth.
Bitcoins are being valuable because some people are interested in them... they attributing value to them. As long as someone is willing to exchange regular currency for bitcoins, they will be valuable. As soon as people stop that, bitcoins will become like credits on an online game.
