Olga Zeveleva
18 January 01:55.

If blockchain is not supported by bonds, gold or securities from any government, who gives it value?

2 answers
Answered by a partner of TheQuestion

I assume what you mean is cryptocurrencies built on top of the blockchain technology.

The answer to your question is individuals. As simple as that.

This widely known across the crypto community article is a must-read for anyone interested in the matter. It was written by Jeffrey A. Tucker, the Editorial Director at the American Institute for Economic Research and a former Director of Content for the Foundation for Economic Education, back in 2014.

As former Federal Reserve Chairman Alan Greenspan said, "bitcoin (any cryptocurrency would fit) is really a fascinating example of how human beings create value or estimate or judge value. So long as people believe, they can sell it to somebody else or unload it on somebody else, and that's enough to create a market."

Comment answer

This question is probably about cryptocurrency, which uses blockchain technology.

Cryptocurrency gets value from the people who think it has value. Bitcoin is a speculative market, and I doubt there are many people who are buying bitcoin to actually go and buy goods as of today. Unless those goods are some sort of illicit drug, or something you cannot really use your regular currencies for, or something which you want to hide your transactions for. But the recent boom that you have seen in the prices of bitcoin and other cryptocurrencies is mostly coming from the fact that people think that they could buy it at a lower price, and sell it at a higher price later on, so it is basically a speculative market that is feeding itself.

I would argue, however, that this market is not any more or less arbitrary than most currencies. People do trading on currencies, people do trading on stocks, and many stocks and many currencies are speculative.

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