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Recently, former CEO of the insurance giant Prudential, George Ball in an interview with Reuters, said that bitcoin is an attractive long-term investment bet. He thinks that BTC is a safe haven for traders and investors.
It is important to know that Mr. Ball was previously a hater of bitcoin, cryptocurrencies and blockchain technology.
But then what made him change his heart? Why did a company like MicroStrategy buy $250 million worth of bitcoins last week?
Because these mainstream financial market bigwigs now believe that BTC has ‘concrete’ intrinsic value as opposed to traditional assets and markets.
And why’s that?
Because bitcoin is decentralized, durable, portable, fungible, scarce, divisible, and recognizable. And most importantly, the cryptocurrency’s design is based on the standard principles of mathematics.
Decentralized
Probably the most unique trait that imparts bitcoin its value is decentralization. By the very design of its protocol, Bitcoin operates over a public network of computers – blockchain.
This network of participants keeps Bitcoin running by ensuring that every member has access to the latest version of the blockchain i.e the longest chain.
No central authority, or a third party organization controls Bitcoin. And recent data suggests that over the last 5 years, bitcoin’s ownership has become much more decentralized.
This means that the concentration of entities holding large number of BTC has reduced and those holding small quantities has significantly increased. One of the reason why bitcoin’s value is increasing.
Durability
Bitcoins are inherently lines of code that exist as ledger entries on a public and distributed network. For the last 11 years, this network has been running 24X7X365 with 99.98 percent uptime.
Cryptography secures BTC transactions. It also makes them remarkably efficient. Also, Bitcoin’s code is available in a public repository on GitHub, which in turn is stored in the Arctic Code Vault. From what it looks, bitcoin is a pretty durable asset and can stand the tests of time.
Portability
There are a number of wallet options available where you can transfer your BTC holdings and move around freely, travel anywhere you like.
You can access your bitcoins from anywhere across the world. Because the money that you spend on investing in BTC actually gets you ownership of a section on the Bitcoin blockchain.
This means that BTC is free from a physical form or a place of storage.
Bitcoin is so portable that now it is not necessary to connect to the internet for conducting a BTC transaction.
State-of-the-art advancements by Bitcoin development companies like Blockstream have made it possible to make BTC transfers without the web. So much so, that transactions can happen from outer space as well!
Scarcity
Scarcity is the most characteristic attribute of bitcoin that makes it a valuable asset. There will only ever be 21 million bitcoins.
This is a feature that pre-programmed in the Bitcoin right from the start when the first block was mined. Mining or the process of producing new BTC requires proof-of-work.
Miners have to prove that their hardware is capable of verifying transactions on the bitcoin protocol amid rising mining difficulty. This is how they win BTC rewards for successfully verifying transactions and circulating them in the market.
Also, a technical feature even known as halving which reduces the bitcoin block reward every four years, ensures that powerful miners don’t empty the entire remaining supply.
Divisibility
Divisibility is another aspect that makes bitcoin a valuable asset. 1 BTC is divisible into 10 million small entities. Each entity is a satoshi.
This means that bitcoin’s limited supply cannot hinder its adoption. The world’s topmost cryptocurrency can find usage even in fractional quantities, up to the eighth decimal place!
With regards to investment too, it is not necessary to buy 1 whole BTC. You can buy a few satoshis or just a small portion of the entire bitcoin.
Fungibility
Similar to all other legitimate assets like gold, and state-backed currencies like the INR, every bitcoin can be exchanged for another.
Bitcoins irrespective of their history of ownership and usage still continue to hold value up until the individual satoshi.
Bitcoins/Satoshis emerging from one source are completely interchangeable with an equivalent number of bitcoins/satoshis emerging from some other source.
Recognizable
As of date bitcoin has garnered a lot of respect and credibility as an investable asset. Despite being criticized as a scam, and a Ponzi scheme, BTC has made a lot of money for investors especially the early entrants.
Also, it has accrued quite some support from conventional financial market and technology influencers like Federal Reserve chairman Jerome Powell, billionaire macro investor Paul Tudor Jones, Twitter founder, and CEO Jack Dorsey, etc.
These are some of the attributes that explain why bitcoins have value. Know any other feature, that imparts value to BTC? Share them with us in the comments below!
Frequently Asked Questions
Is Bitcoin Trading Is Legal In India?
In 2020, the Supreme Court of India lifted the RBI’s restrictions on cryptocurrencies. According to the Supreme Court, the existence of Bitcoin or another cryptocurrency is unregulated but not unlawful. The verdict has greatly aided the world of digital money in the country. To put it another way, investing in Bitcoin is perfectly legal, and you may do so through various apps and traders.
Is Bitcoin Safe And Legal In India?
In 2020, the Supreme Court of India lifted the RBI’s restrictions on cryptocurrencies. According to the Supreme Court, the existence of Bitcoin or another cryptocurrency is unregulated but not unlawful. The verdict has greatly aided the world of digital money in the country. To put it another way, investing in Bitcoin is perfectly legal, and you may do so through various apps and traders.
Is Bitcoin A Good Investment For The Future?
Some investors are afraid of the risks or devastation, but others are very eager to pursue the possibility of profit from a Bitcoin investment. A Bitcoin investment is similar to stock investing, except it can be more volatile.
How Bitcoin Works?
Bitcoin is based on the blockchain, a distributed digital ledger. As the name implies, blockchain is a connected database made up of blocks that hold information about each transaction, such as the date and time, total value, buyer and seller, and a unique identifier for each exchange. Entries are linked in chronological sequence, forming a digital chain of blocks. Blockchain is decentralized, meaning a centralized institution does not own it
How Can I Convert Bitcoins To Cash?
Bitcoin may be converted to cash in various ways, including crypto exchanges, Bitcoin ATMs, Bitcoin Debit Cards, and Peer to Peer Transactions. You may do this by using Bitcoin exchanges like WazirX. You may also sell Bitcoin for cash faster and more anonymously through a peer-to-peer marketplace.
What Is Meant By Bitcoin?
Bitcoin is a digital currency that was initially released in January 2009. It is based on ideas offered by Satoshi Nakamoto, a mysterious and pseudonymous figure, in a whitepaper. The name of the person or individuals who invented technology has not been revealed. Bitcoin promises lower transaction fees than other online payment systems, and unlike government-issued currencies, it is decentralized.
How Can I Get Bitcoin?
To begin, go to the WazirX website and register. After that, you will receive a verification email. The link received by verification mail will only be available for a few seconds, so make sure you click it as quickly as possible. This will successfully verify your email address. The following step is to set up security, so choose the best solution for you. After you've set up the security, you'll be given the option of continuing with or without completing the KYC process. Following that, you'll be sent to the Funds & Transfers section, where you can begin depositing Bitcoins into your wallet. You may also use INR to fund your WazirX Bitcoin wallet and then use it to purchase Bitcoin.
What Are The Chances Of Bitcoin Crashing?
Two Yale University economists (Yukun Liu and Aleh Tsyvinski) produced research titled "Risks and Returns of Cryptocurrency" in 2018. They looked at the possibility of Bitcoin crashing to zero in a single day. The authors discovered that the chances of an undefined tragedy crashing Bitcoin to zero ranged from 0 percent to 1.3 percent and was around 0.4 percent at the time of publishing, using Bitcoin's history returns to determine its risk-neutral disaster probability. Others claim that because Bitcoin has no intrinsic value, it will inevitably crash to zero. On the other hand, Bitcoin advocates argue that the currency is backed by customer confidence and mathematics.
Is Bitcoin Cash A Good Investment?
Bitcoin Cash is a hard fork of Bitcoin formed in 2017 to address Bitcoin's scalability and challenges. Bitcoin Cash seeks to make global transactions faster, cheaper, and more secure. Bitcoin Cash is now accepted by thousands of online and offline businesses all over the world. Studied correctly, Bitcoin Cash may be an investment worthy of consideration.
Is Bitcoin And Cryptocurrency The Same Thing?
Bitcoin is a cryptocurrency that was designed to facilitate cross-border transactions, eliminate government control over transactions, and streamline the entire process without third-party intermediaries. The absence of intermediaries has resulted in a significant reduction in transaction costs. Satoshi Nakamoto, the creator of Bitcoin, created the first cryptocurrency in 2008. It began as open-source software for money transfers. Since then, plenty of cryptocurrencies have emerged, with some focusing on specific fields.
Disclaimer: Cryptocurrency is not a legal tender and is currently unregulated. Kindly ensure that you undertake sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information provided in this section doesn't represent any investment advice or WazirX's official position. WazirX reserves the right in its sole discretion to amend or change this blog post at any time and for any reasons without prior notice.
