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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.
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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 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.
What Type Of Currency Is Bitcoin?
Bitcoin is a type of digital currency or cryptocurrency. In January 2009, Bitcoin was established. It's based on Satoshi Nakamoto's ideas, which he laid out in a whitepaper. The name of the individual or people who invented the technology remains unknown.
How To Make Bitcoin?
Bitcoin mining is not just the process of putting new Bitcoins into circulation, but it is also an essential part of the blockchain ledger's upkeep and development. It is carried out with the assistance of highly advanced computers that answer challenging computational math problems. Miners are rewarded for their efforts as auditors. They are in charge of ensuring that Bitcoin transactions are legitimate. Satoshi Nakamoto, who is the founder of Bitcoin, innovated this standard for keeping Bitcoin users ethical. Miners help to prevent the "double-spending problem" by confirming transactions.
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.
How Many Bitcoins Will Ever Be Created?
The source code of Bitcoin stipulates that it must have a restricted and finite quantity. As a result, only 21 million Bitcoins will ever be generated. These Bitcoins are added to the Bitcoin supply at a predetermined rate of one block every ten minutes on average. The supply of Bitcoins will be depleted once miners have unlocked this number of Bitcoins. It's possible, however, that the protocol for Bitcoin will be altered to allow for a higher supply.
Is Bitcoin Legal In India?
In India, Bitcoin is not illegal. Because of cryptocurrency's rapid evolution, policymakers and regulators seemed to have recognized the chance to accept the new technology early. From the infamous 'RBI ban' in 2018 to reports of an impending bill banning cryptos in 2021 that has yet to develop, India has seen its fair share of ups and downs when it comes to Bitcoin regulation. Last year, the Supreme Court Of India approved the use of Bitcoin throughout the country. According to the Supreme Court, the existence of Bitcoin or any other cryptocurrency is unregulated but not unlawful.
What Is Bitcoin Used For?
Bitcoin was created as a means of sending money over the internet. The digital currency was designed to be a non-centralized alternative payment system that could be used in the same way as traditional currencies. Bitcoin is being used by an increasing number of businesses and individuals. This includes establishments such as restaurants, apartments, and law firms.
How Does Bitcoin Technology Work?
The blockchain is the foundation of Bitcoin. It is a decentralized, distributed ledger that tracks the provenance of digital assets. The data on a blockchain can't be changed by design, making it a real disruptor in industries like payments, cybersecurity, and healthcare.
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.
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
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