Whether you are new to the crypto world, or have some experience in it, you have heard about Bitcoin. It is the first successful digital currency, and today it continues to hold the first place by market cap, and by user interest.
However, in the last months we are witnessing some extreme fluctuations in the price of Bitcoin. It went down from almost $70,000 to less than $20.000. At the time of writing, it has a price of $21,984.
This extreme change in the price makes people wonder if Bitcoin is still worth buying. Let’s see:
What is Bitcoin?
Before we look into why so many people still choose to invest in Bitcoin, let’s explain the main basics of the cryptocurrency and how it works.
Bitcoin is a blockchain network, and BTC is its native cryptocurrency. As we already mentioned, it has the largest market cap.
BTC gives users access to a transparent, borderless and permissionless store of value.
Why do people choose to invest in Bitcoin?
Bitcoin is a pioneer in the blockchain technologies, and since it's launching in 2009, it has never been down. It has a great status among other blockchains, and this is not a surprise at all.
In its basics, Bitcoin is a ledger recording and validating transactions using cryptography. The ledger shows the wallet holding bitcoin, as well as the amount they hold, but doesn’t reveal the identity of the holder. As you have probably already heard, Bitcoin is:
Decentralized - It is not controlled by any person, organization or government.
Transparent - Its code is public, so that anyone can see how the system works.
Immutable - Transactions on the network are verified by other users, and this way the network is protected from manipulation.
Fiat currencies are created and controlled by the government, which is a centralized organization, Bitcoin is fully supported by its users.
While there are some countries where bitcoin is banned, its network still functions, as it exists outside the traditional financial system.
Moreover, with a noncustodial wallet, you can use Bitcoin anywhere, anytime. All you need is internet access.
There is a reason why BTC is said to be a currency of freedom. It is free from censorship, free from capital controls, as well as free from manipulation.
Bitcoin is the digital gold
Bitcoin is used as a store of value and is often compared to gold, as it also has limited supply, is hard to mine, and is not controlled by authorities.
Of course, there are some differences between bitcoin and gold. Bitcoin is easier to transport and transfer, and is much easily divisible.
With the great adoption of Bitcoin we are witnessing in the last years, we can expect that its demand and value will increase in the future, making it a preferred store of value.
Last but not least, all bitcoin transactions are recorded on the blockchain, and the system cannot be counterfeited. If someone is trying to send the same bitcoin to more than one address, it would be highlighted to the network.
The Proof of Work consensus mechanism used by Bitcoin means that anyone to try to reverse previous transactions will have to spend billions of dollars to rewrite the ledger.
As we already explained, Bitcoin has many benefits, and is a viable store of value as a digital currency. There are true reasons for people to believe that Bitcoin will play a big part in the future, and this is why so many people choose to invest in it.
Of course, keep in mind that Bitcoin and other digital currencies are extremely volatile, so you must be careful when you choose to make an investment. Before you jump into investing, do proper research, and never invest more than you are willing to lose.