<p>The value is unstable because it's a small and speculative market.</p>

<p>People don't really understand what bitcoin is and they can be lead to believe many things.</p>

CC BY-SA 3.0
2017-08-21T11:35:05.163Z
2017-08-21T11:35:05.163Z
Yoan Arnaudov
<p>Conventional currencies are usually backed by gold that determines their value but bitcoin is different. It doesn't have any intrinsic worth, just like the paper a dollar is made of, its value depends on how much people are willing to pay to get them and how much merchants value them as a payment.
Inflation is usually caused by putting too much money on the market and thus lowering its price. Bitcoins are put in the market in a regulated way and have a cap of 21 millions, so the only way to cause inflation is a drop in demand of bitcoins. </p>

CC BY-SA 3.0
2017-08-21T13:45:09.433Z
*Conventional currencies are usually backed by gold that determines their value*: if by "conventional" here you mean "prior to the 1970s".  The world went off the gold standard around that time.
Nate Eldredge
CC BY-SA 3.0
2017-08-21T09:13:13.413Z
2017-08-21T09:13:13.413Z
Ivano Donadi
<p>I've been looking up stuff about bitcoins for some time now and i have two question stuck in my mind:</p>

<p>How is the value of bitcoins so unstable?</p>

<p>And can there be bitcoin inflation?</p>

<value><price-volatility><inflation>
What does the value of bitcoins depend on?
Liam
# What does the value of bitcoins depend on?

(Asked by: username_0 on 2017-08-21)

I've been looking up stuff about bitcoins for some time now and i have two question stuck in my mind:

How is the value of bitcoins so unstable?

And can there be bitcoin inflation?

**Tags:** value, price-volatility, inflation


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## 2 answers

### Answer by username_1 on 2017-08-21. Score: 1

The value is unstable because it's a small and speculative market.

People don't really understand what bitcoin is and they can be lead to believe many things.


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### Answer by username_2 on 2017-08-21. Score: 0

Conventional currencies are usually backed by gold that determines their value but bitcoin is different. It doesn't have any intrinsic worth, just like the paper a dollar is made of, its value depends on how much people are willing to pay to get them and how much merchants value them as a payment.
Inflation is usually caused by putting too much money on the market and thus lowering its price. Bitcoins are put in the market in a regulated way and have a cap of 21 millions, so the only way to cause inflation is a drop in demand of bitcoins.

> **Comments:**
> **username_3**: *Conventional currencies are usually backed by gold that determines their value*: if by "conventional" here you mean "prior to the 1970s".  The world went off the gold standard around that time.  

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