Bitcoin is considered a financial innovation that is likely to change the world. I remember that in the old day’s Bitcoin was only worth ten thousand baht. At that time, I didn’t really understand how Bitcoin worked, and I got a huge investment opportunity, but why did the Bitcoin price go up, and why was Bitcoin valued in the first place?
In this article, we’ll take a look at the various reasons why Bitcoin is worth it. For each reason, there may be some scholars to argue. However, I believe that for many reasons, this is piled up. That makes the value of such an anonymous as Bitcoin to be so high.
Because this article is a finance article, I have to excuse myself that this article is my personal opinion. Not financial advice at all. You can read on to study further. But if you are going to use the information from just this article to invest in Bitcoin (it is very pricey), then I have to excuse you. But Bitcoin is worthy like online casinos.
If we understand each other, Let’s go and look at the actual content.
# 1 Bitcoin has a limited amount of value.
This principle applies to all kinds of money and valuables. For example, when the mask was in short supply during COVID, people looking to buy masks are ready to pay more. Bitcoin is also produced in limited quantities (21 million Bitcoin), and if anyone asks, why is there a limited number of cryptocurrencies? Initially, we would like to give credit to the Bitcoin system designers, but I am not talking about technical matters in this article.
We can see it often in some countries. That the government has printed too much money, These behaviors can cause so-called ‘inflation’ as noodles or basil fried rice in your neighborhood get more expensive every year. Most governments have to control the production of money to avoid this problem.
I have to explain first that Just because the items are limited Does not mean that ours must always have value… but on the other hand, No one would waste money to buy an infinite number of things. It can be bought anywhere, therefore, although scholars say that the value is not limited only. But the initial value starts at a finite amount.
In this section, I have to excuse myself that I can only speak from bitcoin’s perspective and not with any other digital currency form (e.g., Ethereum Dogecoin). Many economists say that even if Bitcoin has a large number. Limited, but that doesn’t mean other companies can’t issue their own cryptocurrency. It’s like you said, gold is valuable because it has a finite amount. But on the other hand, others can produce diamonds, produce silver, produce various gems.
# 2 Bitcoin is valuable because it is safe.
One of the things that got technologists interested in Bitcoin is because Bitcoin is a new and highly secure technology. It is a decentralized financial system. (decentralized) instead of an intermediary like the bank or the National Bank to take care of.
All over the world, people will know how much Bitcoin each account has. But no one will be able to see who owns each account. This system has both advantages and disadvantages. But overall, it makes payments more liberal. This is why some of the best real money casino games also accepted Bitcoin as their payment system.
I can have bitcoin in my account (called a wallet) and use it to spend anything. Without fear that your friends or family or even the government will know (But in principle, actually The person you transfer money to will know your account ID. This will allow you to view the funds in your Bitcoin account, but this problem can be solved by creating multiple Bitcoin accounts.)
Bitcoin’s decentralized system also allows our wallets to not rely on an intermediary by one intermediary. Because there are computers worldwide to monitor our financial systems, plus all financial information is published online. Even if the banking system fails, even if the bank is bankrupt, the Bitcoin account’s money is still with us. (As long as we remember the Bitcoin code ourselves)
We can see that decentralized and intermediate systems have different pros and cons. In general shopping, I would agree that a decentralized system would be more useful. But in the business model payments that require a contract Evidencing Or guarantees, having an intermediary to take care of it makes us feel more comfortable. (In a while, there will be an intermediary to handle bitcoin transfers)
# 3 Bitcoin is valuable because people accept it.
Regardless, we have to understand that the money or the value of things depends on how much society accepts. Because in the end, diamonds are just stones, if people do not choose to waste money on these things. Of course, this principle can also be applied to cryptocurrencies. Or items that do not have a tangible appearance
However, one more factor that we need to consider is the acceptance of businesses and governments. We can look at it; for example, if we only had bitcoin for exchange, bitcoin would be like corporate stocks. (Which is also worth But likely to be inactive Most people may not understand.)
But we can also bring bitcoin to buy more stuff. From hamburgers to electric cars, big companies accept bitcoin, and the general public understands bitcoin can do a lot of things. It increases the value of this cryptocurrency.
As I have already explained that there might not be any particular reason bitcoin is valued, but its true value is likely to come from a combination of advantages. We can often see in real life that When many people come together to value something, Value will be born by itself. Since the money that was supposed to be just paper Business stocks that are exchanged millions of baht a day. Or even Pokémon toys and cards
Finally, I would like to emphasize that I’m not an academic with a doctorate in economics, and I’m not an investment expert. Therefore, the advice in this article is just my personal opinion. And is not financial advice in any way?