How does bircoin have value if it does not have a physical presence? I am sorry if i ask a stupid question.
As a peer to peer system, it is based on the value two people agree upon. It really isn’t different than the dollar or euro. Two people agree that $100 is equal to three bags of groceries. And that will change next week (or tomorrow.)
What it doesn’t have are banks or governments telling you what its worth, or manipulating the supply to meet a “target.” I
In simplest terms, think of a cryptocurrency as the serial numbers on your paper money. The person you hand it to trusts it has value because they know they can exchange it with someone else later. The serial numbers are key to that trust.
For cryptocurrencies, each serial number is recorded for other coin holders to validate.
Each transaction can have its history attached to validate its authenticity.
Most cryptocurrencies have checks put in place to prevent someone from trying to counterfeit one with a duplicate number, whereas paper money can be counterfeited.
There is a known number of Bitcoins in circulation and a finite amount of serial numbers that can be added, leading to more accurate valuation than the Fed printing money at will.