The most popular word in any conversation about crypto-currencies after "Bitcoin" is certainly "Bubble". There is no way to avoid the subject. Whatever the reason, people are absolutely convinced that there is a bubble. While this may be the case, I would say that the vast majority of people who say this do not understand why this is, hiding behind the hyper-growth that Bitcoin is currently experiencing.
Their main argument can be summarized as follows: "Bitcoin has a value of zero, certainly not any kind of money since we can not buy anything with it, it destroys the electricity and is especially speculation". So the logical conclusion is this: it will crash. Some go further and say that .
Bitcoin has a zero value"
Value is a relative concept. It's nothing more than a story that a group of people want to believe. If at a certain age stones were considered valuable for an "economy", they were valuable because enough people agreed. Does stone have value in itself? Zero. A common belief in an organized society is the founding principle of this relative concept. Of course, the stones did not last long as a valuable reference. Other assets came later.
Gold in itself was initially worthless. It is a brilliant stone. It has a peculiarity: it is rare. The first people who found gold had no idea of its value. Soon, governments and banks have adopted a reference to define and guarantee value for money. The reason gold is valued is that a group of people believed, based on the scarcity of this asset (and other properties such as sustainability), that this asset was quite strong.
The money we currently use is no different. The paper has no value per se, but the asset is distributed by a government we trust (most of the time) and which has reserves in a commonly accepted value (gold for example), which is a story that everyone wants to believe. Until they no longer believe in it, see hyper-deflationary economies like those in Venezuela or Zimbabwe.
To say that Bitcoin has a null value is to deeply ignore the way it is produced, stored, secured and governed. The concept of digital scarcity is not new: we already know it in many fields. Three-letter domain names are one example, digital rewards for video games are another. Focusing on Bitcoin as software with a few bits without understanding the underlying fundamentals and the network effect that has allowed the distribution of nearly 16 million bits on 21 million bits distributed is like trying to give value to an empty database.
But there are enough people who believe or want to believe that this digital good, decentralized, difficult to produce, difficult to store and highly secure and rare, has value.
What this value is really worth is nothing but law and supply and demand. But let me ask you: is a site like Privatejet.com really worth tens of millions of dollars? Enough people, including those who bought it, think so. And it does not matter whether you agree or not. It's a bubble? We will talk about it later.
"It's not a currency"