" />

Bitcoin value based mostly on belief, trust in people behind cryptocurrency startups

Image still from Monty Python's Flying Circus
Bitcoin value based mostly on belief, trust in people behind cryptocurrency startups

What’s staggering about the recent surge in Bitcoin value, along with Coinbase becoming the first cryptocurrency unicorn, is that the value is mostly based on belief and trust in the startups operating them.

Last week, Coinbase became the first cryptocurrency unicorn while the value of Bitcoin surged 30% over the past week.

According to FutureLab Consulting Partner Moses Ma in Psychology Today, the explosion of value in cryptocurrencies all has to do with faith in the people behind the technology.

“Things are worth what people believe it’s worth,” wrote Ma, who likened the value of Bitcoin to the intrinsic value of Kim Kardashian.

“Kardashian is only famous for being famous, as she enjoys no other intrinsic, artistic value as a performer or entertainer. Bitcoin having no intrinsic value, except for the value of consensus, is more like a tulip auction without any tulip,” wrote Ma.

The idea of belief and trust is what’s at the heart of the cryptocurrency craze, and when Silicon Valley-based Greylock Partners contributed to Coinbase’s $100 million Series D investment round, Greylock Partner Josh McFarland had this to say about trust (I’ve highlighted some of the words for emphasis).

“Coinbase is a beacon of trust in this rapidly evolving and sometimes murky market […] The initial appeal of digital currencies was that they did not require trust of any central entity, since users could control funds on their own.”

“A few months ago, my colleague and Greylock investor Matt Heiman introduced me to Brian Armstrong and his team at Coinbase […] As Brian laid out Coinbase’s progress and plan, it became clear they are building something much more transformative — and contrarian — than is apparent […] We believe that mass market adoption of digital currencies will come via a trusted entity like Coinbase, which is built on a custodial architecture.”

Trust and belief. McFarland’s belief in Heiman set in motion Greylock’s trust in Coinbase.

In a digital world where everything is becoming automated by machines and where even the currency has become digital, trust and belief in the people behind the technology is what drives the perceived value.

View Comments (3)


  1. Gem man

    August 17, 2017 at 10:46 AM

    Trust the establishment or not? Isn’t that the essence of coinbase vs bitcoin?

    • admin

      August 17, 2017 at 11:52 AM

      The same goes for any currency. Belief.

  2. madden 18 coins xbox one sale

    August 30, 2017 at 7:44 AM

    I have no idea what you have said

Leave a Reply

Your email address will not be published. Required fields are marked *


Tim Hinchliffe is a veteran journalist whose passions include writing about how technology impacts society and Artificial Intelligence. He prefers writing in-depth, interesting features that people actually want to read. Previously, he worked as a reporter for the Ghanaian Chronicle in West Africa, and Colombia Reports in South America. tim@sociable.co

More in Technology

Punks at heart: the tech-savvy reinvention of corporate social responsibility

Daniel SanchezSeptember 20, 2017
Chatbots, mobile, phone, marketing

The way to your customers’ wallets is through their mobile phones

Zac LavalSeptember 18, 2017
tech dental industry

Tech is throwin’ grillz on the dental industry

Zac LavalSeptember 16, 2017
tech financial crash

The tech version of the financial crash

Ben AllenSeptember 16, 2017
smart contact lenses

Smart contact lenses: a look at what we can expect

Sam Brake GuiaSeptember 16, 2017
ai understanding eye

AI develops an understanding eye

Omar ElorfalySeptember 15, 2017
technology Harvey and Irma

How technology brought communities together in a fight against Harvey and Irma

Zac LavalSeptember 15, 2017
ai jobs

Just because AI hasn’t yet taken our jobs doesn’t mean it won’t

Ben AllenSeptember 15, 2017
multilingual bots, african funding

Multilingual bots allow African SMEs to simplify funding across language barriers

Tim HinchliffeSeptember 15, 2017