To understand where the value of bitcoins comes from is to understand a simple but essential rule:”To have value, an object must be useful and rare.”Bitcoin is no exception to this rule.These two conditions are cumulative:Rarity alone is not enough, three-eyed fish are rare yet no one is fighting to eat them.Just as great utility does not necessarily justify a high price: oxygen is essential to life, yet as long as it is abundant and easy to access, it is free. underwater, however, where it is rare and where it is necessary to take it in bottle, one would have to buy oxygen.The subjectivity of valueThe other very important concept to know is that the utility of a good or service is a very subjective estimate that will vary according to the preferences and needs of each. You are free to enjoy the pizzas, garlic bread and fries at McDonald’s, just need to remember that this is not the case for everyone.This is what the economists of the Austrian school call the subjective conception of value.Therefore, it is very difficult to give a fair bitcoin price: for some they will not be worth anything and even at 11 lakhs INR per unit they would not buy; for others, however, who believe in its long-term potential, even at 11 lakhs INR per unit they would not sell their precious bitcoins.Nevertheless we can say with certainty that:As long as bitcoins are both rare and useful, they will have value! It is therefore very interesting to look for a moment on these two qualities.Utility and scarcity of bitcoinsA mathematically limited bitcoin issueBitcoins are rare: bitcoins are issued according to a decreasing production function until a maximum of 21 million bitcoins have been reached around 2140.This transmission rule is public, it is written in the source code of the Bitcoin protocol and all Bitcoin users ensure that it is correctly applied. Bitcoins are therefore relatively rare and will remain so. Currently, there are about 16,780,550 million in circulation.The main interest of this production scheme, which is both limited and predictable, is to propose a “digital” currency protected against untimely changes in monetary policy: a digital currency immune to inflation in the long term, like metals that are precious.Unlike scarcity, as we have seen, the utility of a thing is a personal appreciation. Nevertheless, there are interesting objective criteria to watch out for:The intrinsic characteristics of the system.The Bitcoin network has many unique characteristics that make this innovation and the unit of account that circulates on it (bitcoins), likely to interest a wide audience. Notably the Bitcoin architecture, both open-source and participatory, is particularly robust. Thousands of individuals, including many specialists, are constantly auditing the network, and there is absolutely no fake bitcoin in circulation. These intrinsic characteristics of bitcoin are therefore interesting to study. The article “some excellent reasons to be interested in Bitcoin” explores in more detail these unique properties of Bitcoin.The network effect.It is also very interesting to study the community of Bitcoin users. Indeed the usefulness of bitcoins depends greatly on the people who accept them and all the goods and services that are offered to the holders of bitcoins. This is the famous network effect. Clearly, if no one accepts bitcoins, this new form of money will not help you much, conversely the more bitcoins will be accepted in the world and near you, the more they will be useful!Supply and demandFinally, in practice, the course of bitcoin is established through the classic game of supply and demand. It is in a way the mechanism of confrontation of the subjective opinions of individuals that allows a price of equilibrium to be formed. This price fluctuates over time and it is very difficult to anticipate its evolution precisely in advance. Nevertheless the fundamentals guiding these variations are always the same: as long as bitcoins remain rare (and they are programmed to remain so) and the more people who judge this innovation useful, the better the value of bitcoins will appreciate. On the other hand if bitcoins ceased to be rare (discovery of a flaw in the protocol?) Or if this technology ceased to interest people (more efficient competing technology, hostile law etc.), the value of bitcoins would come down .For now, interest in this technology is growing and prices are clearly on the rise. We at BitBns are looking forward to it!