this post was submitted on 01 Feb 2025
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Thank you very much! That all makes sense to me. I think I have a basic understanding of why bitcoin can be an effective currency, but I'm still unsure about the very beginnings though. I don't understand how it took hold. Was it just a small group of friends that were pretend-trading with each other? Even if it was great for illegal trades, how did it start? There had to have been at least 3 entities: 1) buyer, 2) seller, & 3) somewhere for seller to spend gains.
I hadn't thought of the impact that being decentralized would have. If people like somewhere where inflation is going wild, bitcoin is a better option. Now, I want to see a graph of the value of bitcoin vs. the US dollar especially during and after COVID.
Considering that even government-backed currencies have lost their value, I am willing to bet that there are powerful people supporting bitcoin. Otherwise, people would just be bouncing around cryptocurrencies like a casino.
The bottom line is that all crypto is fiat with gimmicks at the end of the day. The only value it has is the perceived value. While with the USD you have a government body proclaiming it's value, along with a vast network of businesses willing to honor its value with goods and services, with crypto you have a patchwork of individuals - mostly crypto hoarders - proclaiming it's value, with very few legitimate businesses actually accepting the currency.
If you have the spoons, you should watch this full breakdown. It covers both crypto and NFTs in-depth.
Does the US government really make the value of the US dollar? When inflation was out of control in Mexican America, the US government had a lot of trouble stopping it.
It's been a while since I looked, but it used to be that bitcoin value pretty closely follows the stock market.
They're somewhat correlated, but I think this is more related to times when people have money to invest.