Cryptocurrencies, also know as digital currencies have now become a global phenomenon. Most people use them in securing financial transactions. One of the most recognized cryptocurrency is bitcoin. It is the currency of the internet. It has has been the market leader since it was first mined in 2009. So what are the charms that bitcoin has that make it so valuable?
Bitcoin derives its value from its use both as a medium of exchange and as an asset (store of value). With the E-Business skyrocketing, bitcoin has offered an efficient means of transferring money over the internet. It is accepted by a large number of merchants and like other currencies, shoppers can use the digital currency to purchase goods or services online. Some physical stores also recognize bitcoin as a form of payment. Just like any other currency, bitcoin follows the rule of supply and demand.
Bitcoin’s scarcity and utility have highly contributed to the rise in its value. As economists say, something has value if it ticks these two. The number of bitcoins in circulation is limited. Its utility has the potential to make it a more efficient commodity than it already is.
Bitcoin is decentralized. This means that it does not have a clearinghouse like the government or the central bank. It is mainly a peer to peer managed and anonymously transferred by miners and users across the globe. This means that the transaction fees are quite low. It is also fast and safe. However, some governments have begun to implement laws that will help regulate bitcoin.
Bitcoin users developers are also contributors to its value. They have built so much trust over the years and this has played a critical role in the decisions made by investors. They make decisions based on other participant behavior in the market.
Recent technology inventions have also had a great impact on the price of bitcoin. For instance, bitcoin has been integrated with several well know payment systems. Since crypto is quite young, many people want to test its viability for the long term. It has really caught the attention of investors.
Bitcoin is not limited to geography. It is a borderless currency. It has turned long-distance cash payments to digital form. Users can now send and receive money in a few seconds regardless of the proximity.
Bitcoins return on investment has it has been speculated in media outlets has hugely contributed to its value. It is a booming business that has caught the attention of many. Just like any other business venture, most people are making operational decisions as they chase for profits. As more people continue to sign up and buy the more it grows. However, a return on investment is not guaranteed.
Bitcoin has evolved from a simple payment network to form a new level asset. Just like the stock market, the price of bitcoin fluctuates every now and then. But as long as the points discussed above remain constant, you can expect more growth in the value of Bitcoin Revolutionand cryptocurrency as a whole.