The value of a bitcoin lies in its unique technology to store an immutable record of transactions from the genesis block in 2009 to the end of time immemorial without even the hint of possibility that someone could cook the books or double spend the same unit of currency. It is a tasteless, odorless, borderless, soulless store of value that is accepted around the world.To me, however, just a mere finance professor toiling away for bread crumbs by the flourescent-pure halogen light of his office, the most underappreciated determinant of the value of Bitcoin lies far beyond all that bleeding-edge tech...
Bitcoin comes with a fantastic community that loves, supports, and nurtures it. For some reason, they even passionately argue about whether its data blocks should be 1 MB or 8 MB, to the point that they even call each other names and get into virtual fistfights about it. That's true passion!
What is the power of that community? And why does that bring value to the currency? Well, let us set aside the fact that in this day & age, we really should celebrate all aspects of society that bring us together, instead of cleave us, and let me explain by example.Money 20/20 recently held a payments race where they pitted 5 racers, each with one form of payment method only, to a race across the United States. Against seemingly all odds, do you know who one?Bitcoin.Because of the community that has organically sprung up around a revolutionary technology and its "imaginary" currency created by an anonymous man.That’s power.And THAT is the true value of Bitcoin - the people who love it, the people who fight for it, the people that put their lives and their future on the line to educate, familiarize and proselytize the Bitcoin gospel.So when you ask what determines the value of bitcoins? The best answer is you, dear reader. It is you - the curious, the ostentatious, the visionary firebrand, the sampler, the educator…The bitcoin community attracts some of the best people in the world.