(Disclosure: this article is not investment advice but editorial meant for entertainment not as actionable advice)
People are always concerned where does bitcoin get its value. In the early days it was difficult to use and difficult to understand but that in large ways has changed. What started as a curiosity for techies and vehicle for black markets has developed into an international, decentralized financial system that anyone can enjoy.
Coinbase has made it super easy to purchase cryptocurrencies like Bitcoin and Litecoin. Coinbase also allows you to buy Ether, which is a unique asset I’ll discuss later. Bitpay and Uphold have made it easier to spend bitcoin anywhere that accepts Visa cards, bitcoin is easier to use than ever.
Bitcoin and Litecoin are traded on so many exchanges they’ve by far become the currencies of choice and the gateway into a much more interesting world of smart contracts and Initial Coin offerings.
Ethereum innovated in creating a blockchain that can not only serve as a currency but as a decentralized registry for all types of contractual arrangements (smart contracts).
For example, imagine if someone wanted to create marriage contracts outside of government. They could create a code that emulates a marriage contract that can be issued via the Ethereum network, using ether as the medium to do so. (You pay ether to create these marriage tokens, and pay ether to send them to others)
So imagine you get married and it’s represented by a unique token instead of a piece of paper at your local town clerk. This can lower financial and legal costs of marriage and divorce, this can be done with anything.
The Value of Ethereum is driven by the actual demand to use the Ethereum network for these smart contracts.
Ethereum isn’t the only game in town, there are competitors in this space in terms of bitshares, NEO, WAVES and many more.
So the value of bitcoin will fluctuate but it’s also the gateway into the crypto universe as bitcoin is the easiest way to buy all these other cryptos to make use of all these other financial services.
So as the demand grows for decentralized financial services so will the demand for bitcoin. An exciting technology that is only still getting started.
Summary, why BTC/LTC/ETH is valuable:
- Ease of use with platforms like coinbase
- Ability to use decentralized financial system
- Low to no cost to transfer funds globally
- privacy (Reason why many are hopping on the Monero cryptocurrency)
Now is it’s current market price over or undervalued is a totally different question, but there is no doubt this technology has tremendous value.