Why Bitcoins Are Just Like Gold

Plenty of people still have a difficult time wrapping their heads around what bitcoin is or why it even has value, especially as the virtual cryptocurrency continues to scale record heights. How isn't this a Ponzi scheme, many have wondered?

A good way to look at it is to compare it to gold. What gives a shiny metal that doesn't have a whole lot of real utility--outside of jewelry and limited industrial use--any kind of real world value?

The only reason gold has value is because one day, way back when, long before recorded history, society simply decided that this yellowish precious metal should represent “money.” From that day forward--as that idea spread virally across the globe (or at least the small part of the planet then settled by

homo sapiens)--gold came to be worth something in the eyes of the people. As a representative (and thus store) of value, it became a universal intermediary between goods and services. This was the natural, inevitable economic evolution of the barter system. As it retained its value over time--and eventually throughout human history--gold gained cultural credibility. That’s the quick and easy answer.

Read more here: http://motherboard.vice.com/blog/why-bitcoins-are-just-like-gold

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