It seems silly to some people that one bitcoin can be worth hundreds of dollars.
What makes bitcoins valuable?
Bitcoins are scarce and useful.
Let’s look at gold as an example currency. There is a limited amount of gold on earth.
As new gold is mined, there is always less and less gold left and it becomes harder and more expensive to find and mine.
The same is true with Bitcoin.
There are only 21 million Bitcoin, and as time goes on, they become harder and harder to mine. Take a look at Bitcoin’s inflation rate and supply rate:
In addition to being scarce, bitcoins are useful.
Bitcoin provides sound and predictable monetary policy that can be verified by anyone.
Bitcoin’s sound monetary policy is one of its most important features. It’s possible to see when new bitcoins are created or how many bitcoins are in circulation.
Bitcoins can be sent from anywhere in the world to anywhere else in the world. No bank can block payments or close your account. Bitcoin is censorship resistant money.
Bitcoin makes cross border payments possible, and also provides an easy way for people to escape failed government monetary policy.
The internet made information global and easy to access. A sound, global currency like Bitcoin will have the same impact on finance and the global economy.
If you understand the potential impact of Bitcoin, it won’t be hard to hard to understand why investing in bitcoin may be a good idea.
