Digital currency Bitcoin hits new high before losing S$200 in value in one day

[Wildreamz]

Gold still got ornaments and electronic usage. Fiat currency is for goods exchange. And there is government control to prevent inflation and managing economy. Yes, everything is demand/supply but Bitcoins do not have the Value it can do for us. Is simply a virtual currency with no regulatory control. Why do we need it when we have our own currency ?

Cory

Gold has industrial and electronic usage agreed. How to assign value to that is complex though.

Fiat Currency is backed by government, however, it is only as good as "this piece of paper is worth S$1, I guarantee it." I do not know if there is any definition of what $1 is supposed to be able to buy, ever since major currencies abandoned the Gold Standard. In theory, the government can print lot's of $1 tomorrow, and deflate the value.

In this sense, Bitcoin is very much like Fiat currency, it has no "intrinsic value" and is only worth as much as what the next person is willing to pay. With the exception that the "value" of Fiat Currency is still somewhat within the government's control (monetary policy etc), and the price of Bitcoin is entirely based on Supply and Demand.