As you surely know by now, Bitcoin is the first cryptocurrency. Even though it has been around since 2009, many people are still skeptical. How is it possible that one can use digital currency to pay for something? Why is it worth so much? How does it work? These are only some of the many questions people have, and here are the answers.
How is its value determined?
We know that one Bitcoin is pretty expensive, and buying a certain amount of them can require a significant investment. So, what determines this price? Well, as you can assume, we do. Firstly, the number of Bitcoins that can be mined is limited. Satoshi Nakamoto, presumably one of Bitcoin’s developers, stated that only 21 million of Bitcoin could be mined. Up until today, we have reached 12 million.
Since the number of Bitcoins that can be used is limited, just like the supply of precious metals, such as gold, it is not surprising that people have been continuously increasing its value. After all, we know that our options are limited, and everyone wants to get their hands on Bitcoins. If you want to learn how to do this, check out babyxrp.org.
Now, since this is a decentralized currency, meaning that there is no government behind it, its value can quickly change. When it comes to fiat currencies, such as paper money, governments print it in the exact amount that will enable them to maintain its value. Obviously, this is not the case with Bitcoins, which means that one can lose everything if things take the wrong turn.
It cannot be destroyed
One of the biggest issues of fiat currencies is their durability. Yes, we are talking about their physical form. Even though new bills are printed and added to circulation continuously, they are still not indestructible. A dollar bill can easily be torn or damaged and destroyed in any way. Naturally, this is not the case with Bitcoin since it has no physical form. This is another feature that adds to its overall value.
However, keep in mind that you can still lose it. When you purchase it, you will store it in your digital wallet. It will stay there forever, but if you lose the key password or cannot access it for whatever reason, it will be useless.
Can it be counterfeited?
Another feature that increases the overall value of cryptocurrency is that it cannot be counterfeited. Well, this is only possible in theory, but actually doing it is fairly impossible since each Bitcoin has a unique digital footprint, and one would have to trick many, many experts. Not only would one need to master certain skills, but they would also have to invest a lot of time and money into this quest, which makes it unlikely to happen.
It can easily be transferred
Finally, the ability to transfer currency between two accounts is another significant feature that affects its value and popularity. When it comes to fiat currencies, this entire process can take several days, and it can be pretty costly if we are talking about large sums of money. As you know, this is not the case with Bitcoin because it uses blockchain technology, the transactions between two peers are completed within seconds.