Bitcoin does have value. We may disagree about what the value is, but if people are willing to use it for the payment for goods and services (There are legitimate businesses that take bitcoin. No, I don't know why they would; I certainly wouldn't), then it meets the definition of a currency.
AFA I am concerned, this is the 21st Century of the Tulip mania, but until it blows up, we are stuck with it.
Bitcoin has no
intrinsic value, It's only worth what people are willing to pay for it, because it has no useful purpose whatsoever. It only exists in the abstract as flipped bits on a computer.
Compared to something like gold and silver, which are physical materials with a ton of useful qualities. Gold will always have value as a useful metal that you can use to make electronics, or even as a paperweight. Even if nobody wanted it for it's historical use as currency, it will never be worth "zero". Rocks and dirt on the ground still have value as a thing you can use to pave a road or fill in a hole. Bitcoin cannot be used to build a computer or fill a hole. It
can be worth zero. Every dollar spent is a dollar taken from somebody else. That's it. It's really that simple. It's this weird hypothetical textbook example that is suddenly applied to real life - sort of like how a basic physics class will make you assume everything is an ideal sphere when calculating air resistance or gravity.
The value of bitcoin in a way is "what somebody will pay you for it". But it also has the real calculation which some speculators see as "all of the real money people have ever spent on bitcoin, divided by the number of bitcoin" (market cap) .. but that isn't actually accurate, because there is no central repository of currency, resources, or fiat to hold that value. The real money isn't actually ever attached to the bitcoin. If you give somebody $100,000 to buy bitcoin, nothing requires them to keep that money and buy back the bitcoin at market value when you want to sell. They can go spend it on a Tesla, or groceries, or whatever. They get the money, and you get a number typed onto the screen of a calculator. So the real market cap calculation is "what one person is willing to spend on a small amount of bitcoin at this exact moment" multiplied by "all of the bitcoin in existence". To say the least, this is a very volatile and risky "beanie baby" level of calculation. But, even a beanie baby contains a few cents worth of recyclable materials. On a long enough timeline its an economic inevitability that the market has to converge on the point where one wallet contains every single bitcoin, and that wallet is worth exactly nothing because nobody wants to buy it. They won't even buy it for a single cent. Well in practicality every single bitcoin will be in a dead/lost wallet, but the effect is about the same. Everything else happening is noise in the margins of speculation, whether or not that happens in a year, or in 10,000 years. A few people will gain a lot in the short term, but a lot of people will lose exactly as much in the long term. Usually the winners are going to be creators of currency and the owners of trading platforms. Unlike most economies, bitcoin really is a zero-sum game. A simpler way to look at it is that bitcoin speculation is "dumb" in nearly the same way that gambling is "dumb" except that the juice kept by the house is represented as transaction fees. So think of investing in bitcoin the same way you would think of investing in lottery tickets.
Bitcoin isn't a currency, because it is unregulated and not endorsed by any government. You generally can't use it to buy anything. It is, at best, a commodity - like gold and silver. Yes right now some companies will accept it in a trade (usually at a massive markup over what you could buy the product for with currency) but it is still meeting the definition of a trade, not a purchase. It's like a pawn shop who will let you trade $3,000 in gold bullion for a $500 gun, knowing they can make a profit. But that pawn shop knows better than to keep the gold and hope it goes up in value someday, any successful pawn shop resells gold as quickly as possible to turn an actual profit. They they will never pay market value for gold. They take a risk by briefly holding a commodity, so they make you pay for that risk (plus profit). Sure you can trade bitcoin for an RTX 3060, but that card costs "$1,200" in bitcoin when it costs "$600" on Ebay. Either way it coming from a scalper who is marking it up from $350.
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