Help me understand this.
I work or invest and I get a piece of paper in my pocket, because I provided something or value to the economy (labor or investment capital) and the only reason it's worth something is that the it's backed by the US government. Same if I'm in Norway, their currency is only worth something because their government and central banks say it is. Before that, we used commodities to as units of exchange. They had direct, tangible value, but it's hard to carry 100 bushels of wheat in your pocket.
Block chain currency, I buy a $2500 computer and I "mine" currency. After "working in the mines" all day (this appears to be the thing of value the "miner" provides to the currency), I can convert this digital currency into a piece of paper that the US government says is worth something, after deducting my costs?
That really sounds legit to you guys? What am I missing? This sounds like a money laundering pyramid scheme. Where does the currency come from in the first place? What gives it value? I know that the piece of paper in my pocket only has value because it's backed by the largest economy in the world and it's ability to generate economic activity and the governments ability to collect a percentage of that activity. Why is any digital currency worth anything? Genuinely want to know.
In general, currency is just a way to store value and exchange for things of value and need to meet some basic elements to be considered currency. Scarcity, divisibility, utility, transportability, durability, and counterfeitability. Block chain currency meets doesn't meet two of those criteria, durability and utility. So what exactly gives it value?
I work or invest and I get a piece of paper in my pocket, because I provided something or value to the economy (labor or investment capital) and the only reason it's worth something is that the it's backed by the US government. Same if I'm in Norway, their currency is only worth something because their government and central banks say it is. Before that, we used commodities to as units of exchange. They had direct, tangible value, but it's hard to carry 100 bushels of wheat in your pocket.
Block chain currency, I buy a $2500 computer and I "mine" currency. After "working in the mines" all day (this appears to be the thing of value the "miner" provides to the currency), I can convert this digital currency into a piece of paper that the US government says is worth something, after deducting my costs?
That really sounds legit to you guys? What am I missing? This sounds like a money laundering pyramid scheme. Where does the currency come from in the first place? What gives it value? I know that the piece of paper in my pocket only has value because it's backed by the largest economy in the world and it's ability to generate economic activity and the governments ability to collect a percentage of that activity. Why is any digital currency worth anything? Genuinely want to know.
In general, currency is just a way to store value and exchange for things of value and need to meet some basic elements to be considered currency. Scarcity, divisibility, utility, transportability, durability, and counterfeitability. Block chain currency meets doesn't meet two of those criteria, durability and utility. So what exactly gives it value?
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