People believe that currencies have worth, and civilizations or other groups have elected to utilize them as a means of exchange.
After the end of the gold standard, the use of fiat currencies spread (this mandated a holding of physical gold back for every dollar). Fiats, like the U.S. dollar, are completely unsupported by any physical asset and only have value because society as a whole accepts them.
For instance, you could go to the store with a $20 bill and spend that amount on things like time and effort. However, the actual paper you use to make a payment has no intrinsic worth.
Bitcoin is a cryptocurrency that was developed and published by a person who goes by the pseudonym Satoshi Nakomoto. It shares some properties with established currencies like the U.S. dollar and Japanese yen as a store of value. Such existing currencies hold heaps of significance, so why would a digital currency hold just as much value, or perhaps even more valuable than dollars and yens?
Here are reasons why BitCoin is ‘said’ to be worth a lot:
1. Finite Supply:
There are a total of 21 million bitcoins available. The number of Bitcoin will never exceed 21 million. According to many experts, a Bitcoin’s value is significantly influenced by its scarcity or limited quantity.
2. Unable To Be Copied or Made A Replica Out of:
No one can spoof a Bitcoin since it runs on a blockchain record. The system continues to function according to the original guidelines proposed by Satoshi Nakomoto because of the blockchain, which records transactions and keeps track of them.
3. Easy To Transport:
Bitcoin can be transported quite easily. It is simple to transfer between exchange accounts or digital wallets.
4. Easy To Transfer From One Wallet To Another:
Transferring bitcoin to another user or merchant is not particularly difficult. You only need their public key (wallet address) to transmit someone’s Bitcoin.
All these elements support Bit coin’s classification as a currency, but they do not account for its extraordinary price appreciation and allure as a store of value. After all, storing money in cash isn’t seen as a wise investment strategy because, normally, your US dollars would appreciate far more in an investment scheme than in cash.
Bitcoin is exceptional even among cryptocurrencies because of its price. Another form of the digital asset could be created with the same features, but it might never be valuable (in fact, many have tried and failed). Why Bitcoin, then?
Here is Why Bitcoin Truly Holds Significant Value:
Bitcoin truly has value because people have full faith in the belief that it does.
Bitcoin has value “because people think it does,” – says Bryan Routledge (Associate professor of finance at Tepper School of Business at Carnegie Mellon University.) He further adds, “And if that sounds kind of unstable and goofy, it’s because it is.”
People tend to keep full faith in the fact that bitcoin will one day be worth more than what it is today. That fact has always been true since the launch of Bitcoin – which was in 2009 – However, throughout the year, bitcoin has seen a rise and fall in value. Its peak was in 2019, with a whopping 30,000 US dollar price tag for every single Bitcoin. As of 2022, and as of the writing of this article, the price for each individual bitcoin is 19,000 US dollars.
Bitcoin can be considered ‘gold’ due to its rising demand and prices each upcoming year. It has become the gold of the online world and digital wallets essentially.
This means that US dollars hold little value when put against Bitcoin Trace even though it is one of the – if not – most frequently used currency in the world.
Kiana Danial is the author of “Cryptocurrency Investing for Dummies, and she believes and says;
“Gold is just dirt that people decided that, OK, this dirt that is kind of shiny, it has value to people. Humans assign that value to gold, to your $100 bill. The $100 bill doesn’t itself have value. We assign that value to it.”
If you are to compare gold with Bitcoin, the first difference is that gold itself cannot be just bought with bitcoin. This is due to the fact that when gold is bought, it has to be touched by and person and felt in person. That is why when it comes to gold, you can simply buy it and hold it. However, in the context of Bitcoin Trace, you can’t hold bitcoin in your hands. It is a digital currency; it is intangible. No matter how much value it will hold, bitcoin cannot quite literally ‘exist’ within someone’s palm.
This is the key aspect that differentiates gold from Bitcoin, but one thing that proves the true value of gold is that it has been around for quite some ages. You can go back to medieval times and still find gold. It has been there for generations. For decades and centuries, manual labour has strived hard to obtain the shiny dust labelled ‘gold.’
However, Bitcoin was first introduced in 2009 and will take years, decades and perhaps even centuries for it reaches the value that gold has obtained throughout the years. But even if we say that technology is rapidly and briskly taking over our thought processes and altering our daily actions, it will be no surprise if Bitcoin Trace reaches the same value as gold without taking such a long time.
Just as Routledge says;
“What you want to know is, in a year from now, will your Bitcoin be recognized as a Bitcoin?” And according to Routledge, the answer to that depends on the unforeseeable future of blockchain technology and a firm belief that technology itself will one day become the mainstream and become the pivotal aspect that influences our actions and future plans.
To conclude our research, it is evident that bitcoin has value because we give it value. Let us review this aspect from a normal standpoint. Imagine a world without the element of ‘cash’ and ‘money.’ Do you think a 100$ bill would hold any value? No. To people who do not have an iota of affiliation with the concept of cash, this expensive bill would mean nothing but a trivial piece of paper. Similarly, the initial launch of bitcoin was valued at practically nothing. No one quite understood the value of bitcoin, but the second bitcoin became rare,
With such value for Bitcoin Trace, it does not come as even a slight shock that people are often scammed out of their bitcoins. Since the blockchains act as a security measure for all cryptocurrency investors, it ensures that such investors do not get hacked.
Without the option of hacking someone and attaining full access to their digital account, these hackers resort to even worse tactics than hacking. They become scammers. They swindle people out of their hard-earned bitcoins. But how? That is the main question, how do these fraudsters fake someone out? What tactics do they put to use?
Let us delve into the different sorts of scams people need to be aware of to save their bitcoins.