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Comment by DrBazza | Hacker News Reader

> For BTC (or any coin) to have any value, it needs actual economic transactions to be conducted in it. If there aren't any, its value is smoke-and-mirrors; its not real.

Not quite - if someone, anyone, wants something that someone else has, they're prepared to buy it. That's the price. You might say tulips are valueless, but that wasn't the case when people wanted them - https://en.wikipedia.org/wiki/Tulip_mania

I'm sure everyone has said "I wouldn't pay X for Y", but someone has paid X for Y. X is the price.

As much as many on HN like to hate on crypto, people want to buy it, and people also want to sell it. That means there's a market and therefore a value to it for those people.

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Answering the question "why does Y have value X" with "because people/someone are/is willing to buy Y at price X" is technically correct but a cop-out. When people ask why something has value, they are typically asking why someone is willing to give money for it, what's the motivation. And the reason why people are willing to pay for something can be very relevant, especially if you want to figure out whether something will rise in value or collapse.

There are many reasons to want something, but broadly you can argue that you either want something because you believe owning the thing will make your life better in some way (food, housing, transportation, ...); or you can want something because you think someone else will pay more for it later down the line, in which case the value of the thing is entirely speculative to you.

Some things are not entirely one or the other. People wanted tulips because they are pretty. Eventually they became a status symbol, demand grew faster than supply, and quickly people started buying tulips not because they wanted them, but because someone else might pay more later. So tulips became a speculative bubble, which eventually collapsed.

>people want to buy it, and people also want to sell it. That means there's a market and therefore a value to it for those people.

People don't want to sell it, they have to, in order to pay the electricity bills for the mining (in their countries normal currency, for that matter).

There is no inherent value - you can only sell if the exchanges find someone who is willing to buy.

The value to the seller is the Dollar/Euro they get at the exchange. The value for the buyer is speculation on the price, which someone else then has to pay at the exchange in normal currency. There is exactly zero value in crypto itself.

Not at all - I can buy a bitcoin now, and then sell it, having not mined it.

I choose not to. But other people do.

> Money has value because of the value of the economic transactions in which its conducted.

As the OP said, little pieces of paper have essentially no intrinsic value. But use it for transactions, and it has suddenly has a value forced on it. We've all seen zombie apocalypse films with cash blowing around in the street and the survivors ignoring it for good reason, no one _values_ it.

Bitcoin is the same, it's a bit of paper in the sense that it's just some numbers on disc somewhere with no _intrinsic_ value, yet as soon as it's a medium of exchange, _which it is_, it has value. There are transactions made in bitcoin.

Here's the interesting thing about tulips: after the bubble popped, bulbs recovered to a stable and profitable price, and the Dutch have been exporting them in great numbers ever since. Tulip mania was a resounding success and an enduring source of wealth for the Netherlands.

No direct analogy intended but it's an important historical fact. A lot of money was made on the South Seas as well.

It’s a unique move to non-ironically point out btc has value because tulips once had value, aka one of the most notorious bubbles of all time. Most people pointing to the tulip bubble comparing Bitcoin are giving an example of why Bitcoin is misguided. This is the first time I’ve seen someone say Bitcoin is like tulips thus it has value.

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