What Gives Value to Bitcoin?

Bitcoin has been one of the best performing cryptocurrencies that in the last year has rallied and hit a price of over $60,000. So, it’s very understandable that many people want to invest in BTC. If you’re a new investor and want to know what makes Bitcoin valuable, we provide an overview of the crucial factors that affect this price and make Bitcoin a good store of value. 

 The Appeal of Bitcoin  

The main reason why it’s valuable is that it’s completely decentralized and apolitical due to the blockchain network that powers the cryptocurrency. A Blockchain network is basically a distributed digital ledger that stores data in a way that cannot be altered after it’s added to the blockchain.   

The entire network peer-to-peer-based, and because it is a digital ledger of transactions, the records are duplicated across the computers in the network. The purpose of the blockchain network is to allow the users to make BTC transactions in a safe, decentralized environment without relying on an external authority. Other attributes include low transaction costs, the anonymity of the users, and transparency of the data flowing through the network. So, users initially invested in BTC due to these attributes.  

Hedge Against Inflation  

Bitcoin is valuable because it is considered a good store of value, much like gold, for example. Appreciating assets like gold or safe stocks go up in value over time, as opposed to fiat currencies, where its value may go down due to inflation. Because this is a decentralized cryptocurrency that exists in a network apart from the finical markets, its value is only determined by the ratio of supply and demand.  

Hence, it is immune to hyperinflation, political crises, social unrest, unstable economy, and generally, it is considered a safe-haven asset for people that want to invest in this kind of assets and for anyone who wants to protect its funds in times of uncertainty. 

High Liquidity 

Bitcoin has high liquidity because it’s easy to obtain it and exchange it, or sell it, on trading sites. As we mentioned earlier, the transaction costs are negligible, which makes it even more appealing to the general public. Plus, the fact that you can choose from a vast number of exchange platforms that use sophisticated technology is another advantage of investing in BTC. One trading platform that uses advanced technology is Bitcoin Billionaire.  

The underlying technology of this automated trading site is AI technology. You can sign up on the site even if you don’t have any experience or knowledge about crypto trading. The good thing about AI-powered trading sites is that the robot completes the technical part of trading for you. What’s more, it maintains a consistent performance, and you can gain 70% in daily earnings here.  

Finite Numbers of BTC 

Maybe the greatest appeal of Bitcoin is that it has a scarce supply of BTC. Actually, Bitcoin’s restricted supply is capped at 21 million BTC.  

This number can never be changed. In other words, this means that beyond the 21 million BTC, the blockchain network will never generate more BTC. Moreover, the blockchain network is designed to keep the number of new BTC produced in the system at a steady rate. 

First, there is a protocol that controls the difficulty of mining, which is the process through which new BTC are released, and it is based on the computing power of the blockchain network. The level of difficulty increases when the computing power also increases. 

Plus, the Bitcoin halving splits the block reward every four years, which again makes mining an expensive and arduous process. This directly impacts the rate at which new BTC are generated, and currently, the demand grows higher than the number of BTC. Therefore, because we have limited supply and growing demand, the price is rising, making Bitcoin a rare and valuable reserve asset.