Why is Bitcoin so Valuable in Recent Times?
The cryptocurrency market is witnessing a boom despite the global pandemic wreaking havoc on all the important economies on the planet. Several crypto startups have emerged in the space during this pandemic to meet the ever-increasing demand for bitcoin and similar cryptocurrencies.
What is Bitcoin?
Bitcoin is a cryptocurrency that is not governed by any central authority, bank or government. It follows the cryptographic technique and is based on peer-to-peer transactions.
Bitcoin as Currency, and Why Currencies Have Value
Currencies have value because the public thinks they do and the community has decided they are meant to be used as a medium of swap. Bitcoin, a cryptocurrency created and issued under a pseudonym under the name of Satoshi Nakomoto, has some characteristics of a store of value that resembles existing currencies.
Limited supply: The supply of bitcoin is 2.1crore rupees. There will nevermore be than 2.1 crore rupees bitcoins. For many experts, this limited supply, or scarcity, is a major contributor to bitcoin’s value.
Can’t copied: Since bitcoin works on a blockchain ledger, no one can counterfeit bitcoin. Blockchain keeps track of transactions and ensures that the system continues to operate based on core rules.
On the move: Bitcoin is highly transportable. You can easily transfer it from one exchange account or digital wallet to another.
Transferable: It is relatively easy to transfer bitcoins to another user or merchant. You just need to know someone’s public key to send bitcoins.
Why is bitcoin worth it?
In short, bitcoin has value because people think it does, said associate professor of finance at the Tipper School of Business at Carnegie Mellon University. And if it sounds disturbing and goofy, that’s because it is.
What should investors know?
The price of bitcoin fluctuates greatly, and it is impossible to know whether it will continue to rise in value or fall into obscurity, which is why it is smart to divide only small rates of your total assets to bitcoin. Experts recommend keeping any cryptocurrency investment below 5% of your portfolio as any other speculative investment.
Final Thoughts
If the rising prices in the crypto market have made you think that it is too late to invest in cryptocurrencies, then understand that this is just the beginning. With more countries seeking to regulate the market, cryptocurrencies will become mainstream. We at kointrack, making blockchain technology accessible to people.
