Foundations of Bitcoin's value {Post-12}

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Bitcoins in most physical forms contain an inscribed motto- Vires in numbers- Latin for "Strength in numbers". The philosophy and design of the Bitcoin is based on this saying and uses it to uphold the system within which Bitcoins function.

For any currency to have usefulness they need to have value, which in the case of the Bitcoins comes from its scarcity.The system ensures a limit on the number of Bitcoins and scarcity in its production. As the community of the Bitcoin users move to further adopt the currency. The faith placed by the first adopter, the miners who worked to generate the currency.Bitcoins are a unit of trust. Their trust and subsequently the trust of all users is in the mathematical perfection of the system that allows users the comfort of knowing that their Bitcoins are unique,valuable and represent value. 

Similar to the older gold standard, which was supposed to allow currencies to be redeemed for gold as backing, Bitcoins are based on the premise that people within the network- retailers, merchants and individuals- will continue to accept them and trade value will be retained.

At its very core Bitcoins are based in trust and faith in the currency itself, which is similar to most modern fiat currencies with the exception of an institutional or governmental support. The faith usually given to central banks and governments is given to the purity of the code that runs Bitcoin in insuring that it remains secure and safe in the digital wallets of the users. The value of the Bitcoin also can't be controlled or manipulated by the governments as is the case with the fiat currencies and the effects of inflation are negligible in the long run since the supply of the currency can't be increased. Bitcoins value solely in the hands of its users and based on the foundational laws of supply and demand, clear of any external manipulations.

This raw dependency on market forces the lack of any correctional or protectionist third party (government) is considered by many as both a blessing as well as a curse. Since the trading of Bitcoins takes place across digital platforms there is a rapid and global influence from a large number of users reacting to a vast verity of reasons such as rumours, fear, confidence issues,  local laws and other behavioural factors.These variations in motivations, without corrective measures in place, makes the value of Bitcoins fluctuate rapidly, causing further fears of it being being nothing more than a bubble. However, this phenomenon isn't untrue for fiat currencies as history has shown. Bubbles are common in free market currencies such as the dollar and euro but they are always seen to normalise in the-long run, which is the exception from Bitcoin as well.