Welcome fren! When most people ask what is a Bitcoin worth?, all they want to know is what’s the current BTC/USD exchange rate. Today though we’re going to dive a lot deeper into this seemingly straight forward question as it’s a lot more important than you might think, especially if you’re considering investing in Bitcoin long term.
Why is Bitcoin valuable at all? Is Bitcoin real? What makes it so different to other monies like the USD or even gold? If you’re after a “store of value” why not invest in gold that’s been around for literally millennia!??? It’s the type of fundamental question that most almost never ask. Usually they’re just buying deep into the latest shitcoin scam but you’re different. You want to know the why behind it.
Otherwise if you’re just after the USD / BTC exchange rate then we recommend CoinGecko.com.
What Is A Bitcoin Worth?
Everything we trade – cars, computers, art – has a value or worth attached to it. However when someone asks “what’s it worth?” it’s a subjective question. Everyone will have a different opinion and so to try and narrow those opinions down a bit we create specifications, things that make it more valuable than others of its type. A fast computer is worth more than a slow computer for example.
Now imagine a world where there is literally only one type of computer and nothing else. You walk into the computer shop, don’t even look at its specifications and buy it. Would you be happy with that? Unlikely. So why do we accept this with our money? It’s one of the most important things… yet we just use the same thing we’ve always used!
Now what if that computer – the only computer there is – hasn’t even been upgraded in decades? Just makes things even worse. As consumers we want different choices, fast ones, slow ones, cheap ones, pretty ones and more. Money – like a computer – is just a tool. A technology that we humans have invented over the years and one that enables us to be more productive and effective at what we ultimately want to do.
Usually most people look at all their options when buying a product, but when it comes to money things can get a bit muddy as most of us never really think about the technology of money. While we might go buy a computer and look at its specs, compare how much RAM it has, the resolution of its screen few of us have ever really done this analysis to money which is a shame.
So to properly calculate a fair worth or value for a bitcoin, let’s define some specifications first.