The Bitcoin (BTCUSD) mostly in digital currency and as an alternative to paper money controlled by a central bank. However, the latter is valuable because it is issued by a monetary authority and is widely used in economics. network is decentralization Cryptocurrencies are not widely used in retail transactions.
Any discussion about the value of Bitcoin has to face The nature of the currency. Gold was useful as a currency due to its inherent physical attributes, but it was also huge. Fiat money was an improvement, but it requires production and storage and lacks the movement of digital currencies. The digital development of money has moved away from physical features and towards more features functional.
Why choose Bitcoin?
However, cryptocurrency exhibits some features of the currency system Fiat. from rare and It can’t be fake. The only way you can generate fake Bitcoin is to run what is known as double spending. This refers to a situation in which a user “spends” or transfers the same bitcoin in two or more separate settings, effectively creating a duplicate record.
However, what makes double spending unlikely is the size of the Bitcoin network. A so-called 51% attack would be required, in which a group of Miners It theoretically controls more than half of the entire network’s power. By controlling most of the power of the entire network, this group can dominate the rest of the network for Forgery recordings. However, such an attack on Bitcoin would require a huge amount of effort, money and computing power, making the possibility extremely remote.
But Bitcoin does not exceed utility test Because people rarely use it in retail transactions. The main source of the value of this particular digital currency is its own loss. The argument for the value of bitcoin is similar to the value of gold, a commodity that shares characteristics with cryptocurrency. The cryptocurrency is limited to 21 million.
The value of bitcoin is a function of this scarcity. As the supply decreases, the demand for cryptocurrencies increases. Investors demand a portion of the ever-increasing profit pie that results from trading the limited supply.
Bitcoin’s usefulness is as limited as gold, and its applications are mainly industrial.
Bitcoin: the pros and cons
Bitcoin is so much more divisible of paper currency. Bitcoin can be divided into up to eight decimal places, with its component units called satoshis. Most fiat currencies can only be divided into two decimal places for daily use.
If the price of Bitcoin continues to rise over time, users who hold a small portion of Bitcoin will still be able to transact with the cryptocurrency. Develop secondary channels such as lightning network, It can increase the value of the Bitcoin economy.