[SOLVED] What gives a Bitcoin its value?

[ManOfArc]

I wasn't sure where on the forum to ask this question, so I chose networking pretty much at random. If this is a mistake, please point me in the correct direction.

To begin with, I'm ignorant as heck about cryptocurrency, so I have been doing a little online reading hoping to clear my head on the subject. Not working too well. I have been curious about where the Bitcoin gets its value. It's obviously not based on any commodity. A machine performs massive numbers of calculations and the owner is 'presented' with a Bitcoin or part of one. As of recently one Bitcoin had a value of ~$49, 000 US dollars.

I also read that Bitcoin mining today uses more electrical power than all of Argentina. Not exactly an energy conservative process if one cares about that sort of thing.

Why? Who pays out $49K for this imaginary Bitcoin? Or can it not be converted to normal currency?
See? I'm lost.

 

[TerryLaze]

I think some of them could. Someone could create a "new" crypto currency with the intent of "pump and dump".
Crypto has no track record to speak of. Metals, and even paper currency of many countries have a 100+ year history. Crypto has less than 10 and some, like Chia have less than 5 years. There just isn't enough history to determine if they have any fraud or not.

Someone can sell gold that doesn't really exist...just because it's new doesn't make it a scheme, there is crime in every field and crypto is a new field so it's easier to fool people, but it's not a fraud in its self.

 

[Ralston18]

I am not a lawyer (full disclosure) but making claims to fool people seems like fraud to me.

Footnoting an advertisement , claim, or document with lots of unreadable fine print and legalese as a "caveat" seems to be the escape route against lawsuits.

Again I am not a lawyer so I will defer to those who are lawyers.

 

[revodo]

Bitcoin is juts as fragile as most currencies, including the US dollar. The dollar is backed by nothing. Not even precious metals. It's status as the world reserve currency is the only thing that has propped it up over the years, but that will eventually fail as well.

There was one country that moved to a labor backed currency, and created an economic miracle out of it, but we killed them.