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Why Bitcoin Can Retain Value (Why Bitcoin Has Value)

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Why can bitcoin retain value? Bitcoin is one of the highest valued cryptocurren

Why Bitcoin Can Retain Value (Why Bitcoin Has Value)

Why can bitcoin retain value? Bitcoin is one of the highest valued cryptocurrencies globally and has been attracting attention since its inception. Despite widespread discussions among many traditional financial institutions and technology companies, Bitcoin, as a “digital gold,” is not widely known by the public. So why is that?

The answer is simple because it has the characteristics of indivisibility, tradability, and tamper resistance. Therefore, when we combine all these assets with blockchain, it has unique advantages. The term “digital gold” is not accurate. Investment tools like “non-fungible tokens” (NFTs) can convert them into tangible things and push their value up or down. This makes them part of investment portfolios and can to some extent reduce risk.”

If we look at this concept from historical data, we will find that Bitcoin has developed to the extreme over the past thousand years, and its price has been continuously soaring over time. As Bitcoin is scarcer than anything else and continues to grow, it is much superior to any other asset.

According to data from the World Economic Forum, on January 4, 2019, the price of Bitcoin was $9,400, and between June 2nd and 7th, 2020, the average price increased by over 1000%. However, despite recent market downturns, the current total valuation of this asset is still around $10 billion, which is quite an unusual level. Although many people believe that Bitcoin may cause environmental damage, Bitcoin still provides other opportunities for various purposes, such as purchasing goods and services. Additionally, some theories suggest that Bitcoin may be used as a medium of exchange or a store of value.

As mentioned above, “Bitcoin is a new form of currency that will not exist in the market forever.” Bitcoin’s ability to appreciate in the long term is because it is a new currency system powered by computer networks. At the same time, Bitcoin is also a secure network protocol.

To ensure security, specialized security technologies must be used to ensure that the transaction process is not attacked, avoiding cases of hacking and loss of user accounts. On the other hand, since Bitcoin cannot be counterfeited or stolen in any way, it is difficult to determine if Bitcoin is real and valid unless it actually undergoes changes. (Cryptoglobe)

Why Bitcoin Has Value

Why does Bitcoin have value?

In this article, we will introduce the true meaning and function of Bitcoin. What is Bitcoin? It can be seen as a medium of exchange for currencies, digital commodities, or assets like gold. It is a special virtual commodity with a specific set of functions—a programmable currency (such as BTC) that can be traded without relying on third-party participants. Its purpose is to eliminate people’s contention for money or power, making it easier to obtain. And this different way, which is different from the traditional financial system, is realized through encryption technology. (Note: Each node in the blockchain network has its rules and codes to execute transactions.)

If all tokenized tokens are circulated together, anyone can buy them and sell them to other token holders at lower prices. This means that you own more than half of all such tokens.

However, since there is no centralized entity managing your funds, this decision is not reasonable because only a few institutions control your funds, and they cannot change their behavior. Therefore, to solve this problem, we use a new “decentralized” system to ensure that you can keep your cash flow secure and not lose your wealth.

What happens when someone transfers their funds from a bank account to an exchange? This is one of the reasons why we believe Bitcoin is important. However, there are also factors that affect the long-term stability of Bitcoin’s price. The first reason is that most companies use Bitcoin as a settlement unit rather than a legal currency. The second reason is that although many companies accept Bitcoin, it is still not a real store of value. The third reason is that Bitcoin has greater advantages compared to the US dollar.

Firstly, it is a borderless electronic payment protocol. It allows users to buy and sell fiat currencies and cryptocurrencies without relying on central authorities. This is because Bitcoin is a completely decentralized ledger structure that can be used for communication and transfers between senders and receivers, so it cannot be used as a currency. Secondly, Bitcoin is highly volatile and difficult to be influenced by government interventions because it is vulnerable to attacks. Finally, Bitcoin is a risky investment for the world economy, but as time evolves, more and more people are starting to recognize this.

Furthermore, Bitcoin provides another fundamental property: “It is basically the oldest and most important form of value storage in the world.” Because of this, “scarcity and limited supply” often become the main components of investment portfolios. Although Bitcoin may be very expensive, and some may find it attractive, there are exceptions: it is almost certain to fail. “I believe that one day in the future, a large amount of capital will enter Bitcoin.”

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