<p>BTC works as any currency. As long as people see value in it, it has value.</p>

<p>The momentum was just the curiosity the users had... Also the whole "Make free money with your computer"- thing which was started.</p>

<p>A big influence was the famous "How does bitcoins work" video I saw on vimeo. That got ME started at least. (<a href="http://vimeo.com/63502573" rel="nofollow">Link to updated version</a>)</p>

<p>The algorithms your computer solves when "mining" isn't used for anything no.
There are also other kinds of crypto currencies on the rise. The most notable is <strong>Litecoin</strong>. It uses a different algorithm. (Scrypt, instead of BTC's double sha256). The point of Litecoin was to make users able to "mine" more efficiently on their CPU's.</p>

<p>I hope this somewhat answered your question.</p>

CC BY-SA 3.0
2013-05-07T12:11:52.073Z
Thank you! "The momentum was just the curiosity the users had" and "The algorithms your computer solves when "mining" isn't used for anything no" answered my question fully.
Martin Drozdik
CC BY-SA 3.0
2013-05-07T12:27:12.310Z
If the algorithms aren't used for anything then they must be useless by definition, no? Of course they are used for something :) If they are used by something else other than that? Not in the bitcoin system.
ralphtheninja
CC BY-SA 3.0
2013-05-07T13:07:52.560Z
They are used for securing Bitcoin--they are in fact Bitcoin's central innovation, solving a problem that was previously unsolved in distributed systems.
eMansipater
CC BY-SA 3.0
2013-05-07T11:58:08.540Z
2013-05-07T11:58:08.540Z
Robin Jonsson
<p>I do not understand <strong>where the value of the bitcoin comes from</strong>.</p>

<p>In old times people were trading in gold or silver. They began to deposit the gold coins in banks and started to trade with these deposit certificates. The deposit certificates became paper money. Then the convertibility of paper money for gold was abandoned, but the paper money had its <strong>momentum</strong> so it remains in use today.</p>

<p>But how did bitcoin get its <strong>momentum</strong>? I understand that to get bitcoins, you need to compute some cryptographical puzzles, so the amount of bitcoins is proportional to the computational time spent. But is this computaitonal time spent usefully as in industry, or is it just spent for the sake of gathering the bitcoins?</p>

CC BY-SA 3.0
2013-05-07T12:16:09.040Z
Just spent for the sake of gathering bitcoins. Its value is given from simple market laws (bid/ask), and people started buying it because they thought it might have been useful and successful.
o0'.
CC BY-SA 3.0
2013-05-07T12:25:14.550Z
The purpose from the perspective of the miner is obviously to earn bitcoins, but the purpose of the mining process is to verify transactions in the network.
ralphtheninja
<value>
How is the real world value of bitcoins generated?
Martin Drozdik
# How is the real world value of bitcoins generated?

(Asked by: username_0 on 2013-05-07)

I do not understand **where the value of the bitcoin comes from**.

In old times people were trading in gold or silver. They began to deposit the gold coins in banks and started to trade with these deposit certificates. The deposit certificates became paper money. Then the convertibility of paper money for gold was abandoned, but the paper money had its **momentum** so it remains in use today.

But how did bitcoin get its **momentum**? I understand that to get bitcoins, you need to compute some cryptographical puzzles, so the amount of bitcoins is proportional to the computational time spent. But is this computaitonal time spent usefully as in industry, or is it just spent for the sake of gathering the bitcoins?

**Tags:** value

> **Comments:**
> **username_1**: Just spent for the sake of gathering bitcoins. Its value is given from simple market laws (bid/ask), and people started buying it because they thought it might have been useful and successful.  
> **username_2**: The purpose from the perspective of the miner is obviously to earn bitcoins, but the purpose of the mining process is to verify transactions in the network.  

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## 1 answers

### Answer by username_3 on 2013-05-07. Score: 2 | Accepted answer

BTC works as any currency. As long as people see value in it, it has value.

The momentum was just the curiosity the users had... Also the whole "Make free money with your computer"- thing which was started.

A big influence was the famous "How does bitcoins work" video I saw on vimeo. That got ME started at least. ([Link to updated version](http://vimeo.com/63502573))

The algorithms your computer solves when "mining" isn't used for anything no.
There are also other kinds of crypto currencies on the rise. The most notable is **Litecoin**. It uses a different algorithm. (Scrypt, instead of BTC's double sha256). The point of Litecoin was to make users able to "mine" more efficiently on their CPU's.

I hope this somewhat answered your question.

> **Comments:**
> **username_0**: Thank you! "The momentum was just the curiosity the users had" and "The algorithms your computer solves when "mining" isn't used for anything no" answered my question fully.  
> **username_2**: If the algorithms aren't used for anything then they must be useless by definition, no? Of course they are used for something :) If they are used by something else other than that? Not in the bitcoin system.  
> **username_4**: They are used for securing Bitcoin--they are in fact Bitcoin's central innovation, solving a problem that was previously unsolved in distributed systems.  

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