Currently Btc acts mostly as a speculation vehicle and also a way to exchange value without using banks or government money.
Let's say you live in Venezuela, what would you rather hold Bitcoin or your shitty government currency that's hyperinflating like crazy? ( Venezuela’s annual inflation rate at the end of 2018 was 80,000%!) Or if you don't have access to banking services then it also makes sense.
For most regular western people it doesn't make much sense other than as a way to speculate/invest/hedge. Cryptocurrencies are not even accepted in most places as way of payment.
From an investors perspective, digital currencies like Bitcoin are a hedge against inflation and a cashless society. Because the total supply is capped Bitcoin is a deflationary asset (unlike Steem).
Some people like to call it digital gold, i don't think that's a bad comparison because often people buy it for the same type of reasons. One of the advantages over gold is that it's easier to divide, transport, exchange, ... That makes it a better form of money.
The argument is then often made that gold is a physical asset while Bitcoin can be hacked. Gold can be stolen to. There has been in history even confiscations of gold by governments (that could happen again).
Does the fact that something is physical instead of digital make it somehow more valuable? Because the value of money is based on trust. You can use anything that is somehow rare. If that would not be the case then why does digital government money exist? It does because people have the expectation that it's worth something and they can use it to pay for goods and services.
Most of the time you see this is a generation thing, at least that's what i noticed. Young people don't know any better than digital so cryptocurrencies seem like a normal thing. While baby boomers rather invest in some hard assets.
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Hello friend @niel96 I answer you as a Venezuelan, it is true that Bitcoin has gained a lot of ground in Venezuela and has become an asset that people would like to have. However, not everyone here has the happiness of owning bitcoin.
On the other hand, I believe in the value of bitcoin and I think that although there may be a deceleration in terms of adoption, that will improve in the coming years. Crypto is the future.
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I think it's volatility is what brings a lot of people or it did the chance of earning some crazy roi but at a risk is it worth it?
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@niel96, In my opinion many still doesn't see value in Bitcoin but Time Will change in future and then everyone will run to adopt it.
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I think humans generally like using what makes life easy for them and causes them less stress.
People are growing and have grown to enjoy online purchases because it has reduced a lot of stress in their life, at the beginning the trust thingy you mentioned was a factor but as more security was put in place more people grow used to it.
Bitcoin and other Altcoins are fairly new by all standard but it's use is growing and more people are buying into the idea of what cryptocurrency is all about.
As regards how people value it compared to physical things is dependent on the value the user places on it. You rightly mentioned Venezuela as a case, but there are a lot of countries where there are a lot of restrictions on how foreign money enters their country because of press freedom, human rights, and government control issues, for these people, it is not the issue of holding cryptocurrencies for economic gains that is their goal but rather that it is providing funding from foreign support so that they can continue the struggle and also survive.
There are countries that are against cryptocurrencies in its entirety because it is a treat to their economic equations, they have ordered banks not to carryout transactions that are crypto base. Individuals and businesses have been able to go round that by transacting using cryptos. This is making the cost of transaction cheaper for them.
In summary, the value is most valued by the people currently using the and them either was i.e. physical or digital. But rest assured that number of people understanding the value of digital assets are growing. Cheers.
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I'm holding bitcoin in speculations due to its volatility. Also, here in Africa, the conversion rate is much higher than corresponding USD equivalent.
For example, 1USD= 570frs but I sell 1$ worth of BTC for 610frs. So, I prefer to have bitcoin or anything Crypto than fiat :)
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Can't you do arbitrage ?
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I used to do it but had to quit because I got into trouble so many times. Issues with trust since I was dealing directly with individuals. It would've been perfect if I'm able to built a platform for it.
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Hello, dear friend @niel96.
I understand that you use BTC as the main reference in your article because it is the most famous and most valuable cryptocurrency in the world. But the main idea that you want to transmit to us could support it using any cryptocurrency of recognized reputation. For example ETH, DASH, XRP, LITECOIN ... would comply with the same principle.
There are many advantages to own a cryptoactive instead of physical assets. And the advantages over the Fiat are even more evident.
It would be great to see a study about the ages of people who adopt cryptocurrencies. I'm sure the results would support this approach of yours.
All best, Piotr.
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The problem with the adoption of any crypto currency is the ease of the use of this tech. Here in vzla a few stores, friends or companies accept any type of crypto. Dash is making a lot of marketing, but in general there's a lot of people with no smart phone, or just no internet conection. And it all just worsen when you get to complexity part. I had an hour speech about what is btc, is a three act speech. Steem is easier to explain, but a lot harder to use as money. But it worsen when you have to use it hidden because the policemen are stealing mining machines, btc or anything of value.
If the people can make the technology more usable the value of crypto is gonna skyrocket. But it is not an easy task in some sort of countries.
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I see HUGE value in bitcoin. The wave will come to a end in a few years as the new big thing comes out or as regulations kick in.. but for now, its a way to level the playing field around the globe. Its a way to have people not be slaves to their nation state and locked into a system of fiance that is not serving them. Crypto is the future.. bitcoin may not be.. but the blockchain is.
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