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Originally Posted by Irace86.2.0
That is what I don't get, obviously if the dollar drops in value or the economy dives then stocks dive, but I'm sure Bitcoin's value will also drop. How is it special? People always say they need to buy gold or silver when the stocks start to drop, as if it is protected from a market collapse. Like yes, gold will always bounce back and Telsa or Apple stock could have been destroyed, but isn't that just an argument to diversify? I mean, it isn't like a bar of gold is going to buy anyone anything if food and water was scarce in an apocalypse; it only holds value as long as people give it value. I'm rambling, but I guess I just don't see how the rewards outweighs the risks for me.
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No your actually hitting the main argument right on.
So blockchain is just a ledger. Every 10 min give or take a new "block" is created. That block is just a list of the transactions on the network. Every movement is tracked.
Every computer on the network is constantly verifying the validity of every transaction on the network. For completing these blocks miners are rewarded with Bitcoin.
There will only ever be 21 million Bitcoin. Hard cap, unlike the dollar or even gold. That is why Bitcoin is concerned the hardest of money.
If you study the history of what is called fiat currency or any paper money then you know that every currency controlled by people or more appropriately Bankers has failed. Mainly through banker greed and debit. The United States has had over 8,000 failed currency's. The dollar was only created in 1913 along with the fed and the IRS so you had to go collect dollars to pay the tax man.
So the theory is that Bitcoin has value because we can verify where each Bitcoin is. But not just where each Bitcoin is. One Bitcoin can be broken into 100 million pieces or satoshis. At any point you can go and look at the blockchain and verify where each Satoshi is.
And well yes something only has value if people believe in it. You have thousands and thousands of computers supporting this network. Even Goldman Sachs earlier this year admitted to that after the Corona virus crash the fact that Bitcoin was the first asset back to even shows its store of value.
To understand the scale of the computational power being used on the network to support this The network is doing over 25 quadrillion equations per second. There's about seven quadrillion grains of sand estimated on Earth.
Sorry if I missed anything. I wrote half that waiting in a parking lot but it's a high level overview. I'll re-read it tonight and might expand if I shorted something.
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