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Cryptocurrency 101: Understanding the Value of Bitcoin



Cryptocurrency 101 Understanding the Value of Bitcoin

Did you know that Bitcoin commands over 40% of the crypto market? Towards the end of 2021, the worldwide cryptocurrency market capitalization hit $2.21 trillion.

Digital currencies have increased their popularity in the past decade. Today, you’ll find more than 7,550 cryptocurrencies in the market.

Cryptocurrencies use blockchain technology. The technology permits a group of selected individuals to share data.

So, what is bitcoin? Also, why does bitcoin have value over other cryptocurrencies?

This article provides you with an ultimate guide to understanding the value of bitcoin.

Bitcoin Stores Value

Among other cryptocurrencies, bitcoin has the highest volatility. So, it’s perceived more like a product such as gold that can store value over time.

Bitcoin lacks only one feature – price stability.

If there’s increased adoption of Bitcoin, its high volatility might change. Yet, there are not enough incentives to predict any change.

So, Bitcoin will remain highly volatile until cryptocurrencies get adopted globally.

Bitcoin Is Scarce

The limited supply of Bitcoin contributes significantly to its value. When supply goes down, the demand for Bitcoin will increase.

There’s a scarce supply of 21 million coins in circulation. So, crypto investors compete for a part of Bitcoins’ profitability nature.

Yet, researchers believe that Bitcoin technology will soon evolve to become a medium for daily transactions.

Free from Counterfeits

When you complete a Bitcoin transaction, it’s recorded on a digital distributed ledger. The ledger gets secured through computation work or nodes.

Besides, the distributed ledger system helps to prevent the double-spend issue. Double spending barred the take-off of the existing cryptocurrencies before Bitcoin.

So you can neither forge nor revoke any Bitcoin transaction.

Decentralized Nature

Unlike regular cash, cryptocurrencies are highly decentralized. So, no government or central banks can claim ownership and control of Bitcoins.

That way, no one can track or censer your crypto transactions. You’ll also not have to worry about any government organization confiscating your money.

Easy Recognition

Recently, traders and businesses have started accepting Bitcoin payments on their site. Even though it’s not as exposed as traditional currencies, many users can distinguish Bitcoin from other non-currencies.

Also, you can reuse one bitcoin without dropping its value hence its durability.

The installation of Bitcoin ATMs is getting done across many parts of the world. That way, you can trade cryptocurrencies at your convenience.

Highly Divisible

You can divide one Bitcoin into one hundred million Satoshis. This implies that a single Satoshi will equate to 0.00000001 BTC, which is the least amount of Bitcoin in the market today.

A single Bitcoin can get subdivided into 16 or more decimals if the need arises. So, you’ll enjoy a boundless level of divisibility with Bitcoin cryptocurrency.

The Value of Bitcoin

There are many reasons to invest in Bitcoins. You’ll enjoy no transaction fees as you’d find in banks and traditional currencies.

Besides, you can trade Bitcoins regardless of your location. All you’ll need is a crypto wallet and a stable internet connection.

Bitcoin transactions will give you a sense of privacy. Since you’re using your blockchain identity, you won’t have to expose your identity.

Explore this page to learn more about the value of Bitcoin.