I had this question for some time and i couldn't have a clear answer.

How can a new entity (coin) have a real value, in USD for example, and be able to trade with it when it has no real life equivalent like Gold.

anybody has an answer ?

closed as off-topic by pebwindkraft, Зелёный, ndsvw, Alin Tomescu, chytrik Feb 2 '18 at 23:39

  • This question does not appear to be about Bitcoin within the scope defined in the help center.
If this question can be reworded to fit the rules in the help center, please edit the question.

  • 2
    Anything can have value if anyone ready to pay for it. – Зелёный Feb 2 '18 at 12:03
  • 3
    I'm voting to close this question as off-topic because we in this q&a forum prefer questions that can easily be answered, and less “discussion threads”. As such the question would find a better place in bitcointalk.org. – pebwindkraft Feb 2 '18 at 12:07
  • 1
    I don't think it is bad at all. It is actually an elementary question about a revolutionary episode of monetary system. – Victor F Mar 14 '18 at 13:17

First of all, "real value" is a questionable term. Some people deny a concept called Intrinsic Theory of Value. Anyway I can give us some reasons:

1) Limited supply and increasing demand

Bitcoin (as some other cryptocurrencies) has a fixed supply, which is currently 16,8 millions of units but it is going finish in the next years, when it hits 21 millions of units.

This supply of units is totally public through its ledger, which brings us an authentic and transparent scarcity.

According the classic economic model of Supply and Demand, if the demand increases and the supply does not increase in the same speed, the price will increase.

2) Bitcoin is a more effficient payment system

You can send an amount of money for an relatively small fee in a short time. The current systems simply can't send 3000 USD from NY to Japan in 10 minutes for 2 USD less than 1 USD and the next updates can make it cheaper and faster.

3) High liquidity and media coverage

Anyone can trade relative small amounts of bitcoin in Internet. It doesn't have the same limitations or restrictions that other markets have, like trades with minimal amounts. It has more liquidity than stock market, as you can trade in smaller positions.

So, if the Bitcoin market is bullish it trends to be really bullish, specially when media coverage show how bullish it is and much high it is performing, which brings more interested people to the market - even people who doesn't know exactly how Bitcoin works, how its blockchain works, etc. It happened specially during 2017. So we have an explosive scenario, where:

  1. Bitcoin price increase much more than other investments in the same timeframe
  2. Media coverage about Bitcoin performance increases people curiosity
  3. Bitcoin is easy to trade in relative small amounts and people buy some Bitcoin
  4. Repeat.

Not the answer you're looking for? Browse other questions tagged or ask your own question.