Bitcoin, in case you missed it, is a decentralized cryptocurrency that circulates through peer-to-peer network. It is so valuable simply because it has a value, and it can be used as a medium of exchange. To understand more about bitcoin, go to
www.betcoin.tm.
That's redundant. "Something is valuable because it has value." What gives it value to begin with? Money transfers such as Western Union and bank transfers can act as a medium of exchange while being a much safer means to do so because they are insured and can be held accountable. In the overall picture, we know the U.S. is in debt, but you can take a local bank to small claims court and have a go there.
For example:
If you walk into a bank, there will most likely be branded pens that you can take with you once you leave. Pens are a dime a dozen, literally. So you could throw it out of the window on the drive home and not ever think about it again.
Now, what if you happen to bring that pen with you to school tomorrow and finals are taking place? The guy next to you taps your shoulder, "Hey, do you got something to write with?"
And you say, "Hey, do you have money to buy my pen?"
The simple concept of supply and demand applied to how much items are worth in certain scenarios.
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Mt. Gox was a Bitcoin exchange and no one can hold them accountable because Bitcoin was been deemed as an alternative. Statements from Japan and the U.S. declared that Bitcoin was an alternative and not an actual currency, much like gold or silver. The users of the exchange were therefore not insured against any losses that they experienced with the exchange.
The IRS has deemed that Bitcoin is property and therefore taxable. This supposed value that Bitcoin has will suffer even more as laws are put into place. Along with how media affects trading of Bitcoin in general. Because Bitcoin can be exchanged like a stock on exchanges, it can happen in real time. When news breaks of something detrimental in the world of Bitcoin, prices are affected.
The only real reasons that someone would have used Bitcoin in the first place is if they were laundering money, buying drugs, rebelling against regulated banking systems, or something else along those lines. Since then, Bitcoin has become more widely adopted by those who may want to try to buy it at a low price and flip it when the price is high for profit - much like a stock. Once media gave attention to Bitcoin, there was a frenzy. Along came altcoins, such as Litecoin, and people have just fell in love with this idea of virtual currency.
