Why does bitcoin have any intrinsic value?
I ask this but never get an answer. I do get why people who own bitcoin promote it so hard, they are looking to drive up the value of their investments.
A gold or silver coin has value because of the precious metal they contain.
A Gold backed security has value because in theory you could exchange the paper for a certain amount of gold.
Even a fiat currency like the dollar has value because it is backed by the most powerful military in the world and the taxing and legal authority of the Government.
However crypto-currency seems to have value because they claim that it is anonymous from the government. Honestly I doubt that, but even if it is currently true as technology advances it that value will likely disappear.
So what is the value of bitcoin? I ask this in all sincerity.
The intrinsic value is in the network.
It is a “proof of work” transactional network. Banks make money by taking a little bit of every transaction. Bitcoin pays their “miners” in a similar way. It takes an investment of time and energy to process transactions and the miners are rewarded with a payment of bitcoin.
It’s a little tough to get your head around—but it’s pretty much the same way that the big banking companies make their money. It just transparent.