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What gives bitcoin their value? A non-technical explanation
These days it’s hard to go a day without hearing something about bitcoin or some other cryptocurrency. Their soaring prices has created both FOMO and curiosity around the tech for many. But as a society we’ve become trained to be skeptical of anything that sounds too good to be true (insert Nigerian royal family emails) and have seen many fads come and go.
So if bitcoin is real, where does bitcoin (I’m talking about the currency not the application currently), get its value from? There are three primary and legitimate reasons why bitcoin has value to millions of people around the globe currently, and perhaps billions in the future.
1. Blockchain mechanics
Whether you believe in Bitcoin or not, imagine for a second that 50 people are trying to send bitcoin to a friend. For those transfers to occur and be validated, a very small amount of bitcoin is required as a fee. This fee is part of what incentivizes Bitcoin “miners” to validate the transactions that occur within Bitcoin the application. So as long as Bitcoin is around and people are transacting within it, there will be some value for bitcoin, the token, no matter what. These mechanics are also true for other cryptocurrencies.
