What is true about Bitcoin?
2014
What is true about Bitcoin?
- A.
It is currency with high intrinsic value
- B.
It is currency with no intrinsic value
- C.
Bank of Thailand accepted it as legal
- D.
Since its inception the price of Bitcoin has always been lower than Dollar
Attempted by 61 students.
Show answer & explanation
Correct answer: B
Intrinsic value: Bitcoin is a digital asset that is not backed by a physical commodity (like gold) or by a government. Because it lacks physical backing or mandated legal-tender status in most countries, it is commonly described as having no intrinsic value in the traditional sense. Its price is determined by supply and demand and by how much people are willing to use or hold it.
How Bitcoin's value arises:
Limited supply: Bitcoin has a capped supply (21 million), which contributes to scarcity.
Network properties: Security, decentralization, and the robustness of the blockchain add economic value.
Utility and adoption: Use as a medium of exchange, store of value, or for transfers affects demand.
Market behaviour: Speculation, investor sentiment, and macro conditions play major roles in price.
Legal status: Bitcoin is not legal tender in most countries. Some jurisdictions regulate cryptocurrencies as assets or impose restrictions, and only a few countries have recognized Bitcoin as legal tender.
Summary: Bitcoin’s value is market-driven rather than derived from a physical commodity or government backing. Its scarcity, network characteristics, usefulness, and demand explain why people assign value to it.