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<p>[QUOTE=&quot;Prime Mover, post: 2753627, member: 38783&quot;]Ok so let me take a stab at your post, see if I can make some sense.</p><p><br /></p><p>First off, Bitcoin, or any crypto-currency, is dangerous.&nbsp; You are right, there is reason to be concerned.&nbsp; I believe the main point is that it&#039;s a black-box, it&#039;s Tech Voodoo Magic to those who don&#039;t/can&#039;t understand its underpinnings.&nbsp; The second is that also due to not understanding it, people see the hype and buy into it without learning anything about it, just like buying a stock on the hype only to have it fall and los your shirt.</p><p><br /></p><p>So, that out of the way, let&#039;s dive into some of the other things.</p><p><br /></p><p>I personally don&#039;t believe it&#039;s main usefulness is in being an alternate every-day currentcy.&nbsp; It can&#039;t function in that vein today, as its valuations fluctuate too wildly.&nbsp; Maybe it will get that stable, maybe not, time will tell.&nbsp; Only if it does become stable will it be useful as a currency, not before.</p><p><br /></p><p>I believe its usefulness is:</p><p>- Speed &amp; transaction cost.&nbsp; You can send money to anywhere in a matter of minutes, with very low transaction fees.</p><p>- Accountability / auditability.&nbsp; Build upon the above by knowing that your transaction, and all transactions are held in the Blockchain.&nbsp; It is simply provable that address &quot;A&quot; sent funds to address &quot;B&quot;, by just looking at the transaction list in the Blockchain.&nbsp; And, that your transaction has to be verified by 6 different parties to be fully &quot;confirmed&quot; and considered finished.</p><p>- Security.&nbsp; Your funds, transactions, everything is protected by unbreakable (by today&#039;s standards) encryption.&nbsp; No middle man attacks, no intercepts, your funds go exactly where you want them to.&nbsp; And, as processing power increases, the software and encryption standards will adapt, increasing to keep pace.</p><p>- Semi-anonymity.&nbsp; People believing any crypto currency with a publicly available block chain is completely anonymous are sadly mistaken.&nbsp; EVERY transaction is publicly browseable, so you can for sure follow the trail if you know the addresses involved.&nbsp; If you can successfully associate an address with a person, you can see their complete transaction history and hold them legally accountable.</p><p>- De-centralization, independence.&nbsp; Bitcoin has no owner, it has no government backing it.&nbsp; To those that use it, that is a positive.&nbsp; You can buy Bitcoin in US fiat, send it to someone in Japan, they can cash it out in Yen immediately.&nbsp; No conversion fees, no hassle, same value.</p><p>- Self-empowerment.&nbsp; YOU are the bank, you hold your own funds, and can transact with anyone, anywhere.&nbsp; For those who have fear of banking, large institutions, etc (agree with them or not), it&#039;s perfect.</p><p><br /></p><p>Now, moving onto what makes Bitcoin &quot;valuable&quot; in terms of actual fiat.</p><p><br /></p><p>You are correct in that there is no one who &quot;owns&quot; Bitcoin, and no one who backs it.&nbsp; This is a large red flag to any traditional economic understanding and basis.&nbsp; This is what throws most for a loop, and why there is so much angst about why is it valuable, and why does it have value when there&#039;s nothing behind it giving it intrinsic value.</p><p><br /></p><p>To me, the simple answer is that the value lies in what it can do, what it can be, and the ideology of what it represents.&nbsp; Hey, it&#039;s a hippie currency, go figure!&nbsp; <img src="styles/default/xenforo/clear.png" class="mceSmilieSprite mceSmilie1" alt=":)" unselectable="on" unselectable="on" /></p><p><br /></p><p>Yeah, take that one in.&nbsp; It really defies logic.</p><p><br /></p><p>This is a much larger part of it, which will have to go into another post, this one is already too long.</p><p><br /></p><p>But, there is a cost to &quot;mine&quot; Bitcoin, transact it, store it, etc.&nbsp; It is a self-contained cyclical system which feeds itself.</p><p><br /></p><p>Oh, and last part is that there&#039;s only 21,000,000 full Bitcoins which will ever exist (yes, they can be split up into much smaller fragments), so it is a fixed supply which can drive price.&nbsp; Only 2/3 have been mined and the last one won&#039;t be mined until 2140, on a fixed release schedule that is determined by the algorithms within the software.[/QUOTE]</p><p><br /></p>

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