To give some counterexamples to your point were cryptocurrencies have no intrinsic value: bitcoin is backed by labor and capital. In order to generate bitcoins, it is required to invest in expensive computer hardware, and it also necessitates ongoing electricity and maintenance costs. In this sense, bitcoin bears similarity to the Labor Treasury Certificates issued by Adolf Hitler where the currency was equivalent to some unit of labor.
There is also in fact a cryptocurrency that is backed by gold, which used to be the case for the dollar, like you mentioned in your post. It's called PAXG. It can be exchanged for its equivalent value of gold at any time. From the :
Each token is backed by one fine troy ounce (t oz) of a 400 oz London Good Delivery gold bar, stored in Brink’s vaults. If you own PAXG, you own the underlying physical gold, held in custody by Paxos Trust Company.
PAX Gold is the only gold token that you can redeem for LBMA-accredited Good Delivery gold bullion bars. For additional convenience, smaller amounts can be redeemed through a network of physical gold retailers in US and Canada. Institutional customers can also redeem for unallocated Loco London Gold. Paxos customers can always redeem for USD at current gold market prices
In my point of view, the positives of bitcoin are the fact that the supply of bitcoin is limited, it is dependent on capital to be mined, and it is not in the hands of a central authority. No third party can arbitrarily change its value by increasing the supply.
Yeah but you can always divide by another decimal slot and never reach the whole so it kind of is an unlimited supply
i have heard this but i get conflicting information when i ask what the bitcoin mining actually does. so when mining a bitcoin what are people actually doing with their computers? what is the energy exchanged for? is it just burning power for the sake of it? that would have the same value as burning houses for currency and is retarded. So what is that computing power actually being used for? do they utilize collective computer power to process information? that makes sense and would give bitcoin some intrinsic value but that is what i have deduced personally, not what anyone who promotes bitcoin has told me.
As far as I understand it, the bitcoins that have not yet been mined are encrypted; The complexity of the encryption increases as more bitcoins are mined, meaning more computing power is needed for the same amount of bitcoins as more bitcoins are mined. This means the amount of money it costs to mine a bitcoin increases with time, thus increasing the value of newly mined bitcoins.
Miners form networks together in order to collectively attempt to brute force solutions in order to obtain the key and unlock a new batch of bitcoins. To do this, either their GPU or their CPU is utilized to try one solution after the other, until one of the miners in the network hits the right solution. The bitcoins that were mined are then distributed across all the miners in the network according to the total computing power they have contributed before the solution was found. At the same time, this computing power is used to verify transactions and keep the entire network secure.
... Am i the only person that thinks that is just a giant waste of power? You are essentially burning electricity to get electric dollars, they are seriously just wasting power to brute force encrypted codes? Essentially bitcoins are mined from a bullshit grinder
Pax g it is very difficult to get the gold. We need something like pax g in the USA but based on silver. Something that has multiple locations to collect your silver if you want. Look into paxg u have to have a lot of money put in to ever get your gold out I think it was close to 300k
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