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In my opinion, you got it exactly right, simply by sticking to "it is a ledger." The value (not price) of BTC is wholly in the authenticity of who has what, and that this is backed by distributed consensus rather than states. BTC demonstrates that the truth about "who has what" is more important than what the "what" actually is. I think the "what" is simply currency, or the debt-based value you wrote about. People buy into it by converting other valued currency, or by doing work, same as ever.

As to the USD price, I am less sure. My weak working hypothesis is that it is driven by adoption + projected future adoption. That is, how much people value it means how much they value being in on this particular ledger.




Personally I would argue that the price of Bitcoin is driven by the same supply-demand relationship as anything else. Supply is obvious. I personally think the demand for Bitcoin is driven by its use to make payments in fiat currencies; most of the people who "accept Bitcoin" do so through a service that immediately converts it to a fiat currency, and more people are paying with Bitcoin than are participating in mining (i.e. they just buy the Bitcoin). Even on the black market this is how people are using Bitcoin: drug dealers still need to pay their rent, and their landlords almost certainly do not accept Bitcoin; drug users need to have the money to buy their drugs and whoever is paying them is almost certainly not doing so with Bitcoin.

(Why are those things almost certain? Consider the scale at which Bitcoin operates; then take a look at ACH, Swift, Visa, Mastercard, etc. We are talking about orders of magnitude in difference. For all its gains over the past few years Bitcoin remains a tiny niche.)

In other words, don't view Bitcoin as money; view it as a system for transferring money and converting between different countries' money.




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