Divisibility. A single bitcoin consists of satoshis. One Satoshi is equivalent to 0.00000001 BTC. This level of division is incorporated in Bitcoin’s original code.
Portability. Bitcoins, as well as other cryptocurrencies, can be transferred seamlessly through crypto wallets. Based purely on the internet, it can be sent or received within seconds.
Fungibility. Every bitcoin a person owns has the same corresponding value as another bitcoin. Regardless of who owns it and what block it is a part of, BTC’s worth is interchangeable.
Durability. As long as the Bitcoin network remains to be functioning regularly, any amount of Bitcoin or Satoshi owned by a user can be reused countless times without degrading.
Recognizability. Without a doubt, the majority of people around the world easily know what bitcoin is. In this way, it embodies what cryptocurrency is.
Decentralization. Unlike fiat currencies, no single entity produces and controls Bitcoin. No single person alone can censor, control, or manipulate the network and its transactions.
Accessibility. No verified accounts or several pieces of documents need to be submitted to own or accept bitcoins. Keep in mind that as long as you have your crypto wallet ready, you can access BTC.
Uncounterfeitability. Double-spending is prevented within the blockchain. That being so, every bitcoin transaction is recorded on the ledger and confirmed by trustless nodes aka miners.
Programmability. Code developers programmed digital currencies like bitcoin. Therefore, the community can decide how to modify it.
Generally, no currency can be considered absolutely safe from failures or discrepancies. Bitcoin, and other altcoins, may show a lot of potentials for usage, however, no one is certain on how it will progress. Taking all the positive measures to adopt these are dynamic moves that could be highly beneficial to everyone.
Famously known as digital gold, Bitcoin serves the functions of money as it continues to penetrate commercial and economic industries:
Medium of Exchange. In reality, people use bitcoin to buy goods and services. More and more stores are deploying flexible payment methods that mainly accept BTC, ETH, and others.
Unit of Account. It is clear that Bitcoin can act as a measurement of value. Depending on a specific good/service, there can be a set price in BTC that can be paid through wallet transfer.
Store of Value. Bitcoin retains its value over time. Those who have HODL-ed there way from when BTC was still worth a hundred dollars have obviously seen how it appreciated its price.
Anyone who thinks digital gold isn’t a store value is overlooking the fact that most businesses today are built around digital trust, including the financial system.
-Tom Lee, Head of Research at Fundstrat Global Advisors
Bitcoin may not play all the abovementioned roles perfectly with cryptocurrency integration still a work in progress. Despite this, as a representation of a new form of currency, it surely offers an advantage to those who use it than those who prefer not to or do not have enough knowledge.
Why Bitcoins Have Value?
Network effect is the universality of a currency and the increased value that comes with it. As Bitcoin and cryptocurrencies, in general, become widely used, the more flexible they become. What is more, this will result in a more stabilized value.
Developed to be the first real-life application of blockchain that allows direct, permissionless, and private transfer of wealth, Bitcoin came to prominence at the end of the global financial crisis. As indicated, its value greatly increases as more people use it.
Thus, instead of looking at the price alone, Bitcoin’s true value lies in its network participants. As more people own and use BTC, its distribution expands and from a transaction perspective, the amount of wealth placed into each unit of this asset enables seamless transactions. Furthermore, miners who maintain the network internally affects BTC’s value in proportion to their capability to confirm transactions and generate new blocks.
Bitcoin may not replace traditional money but it certainly can stand alone as a substitute leading to more secure payments, efficient cash storage, and enhanced privacy of business trades.
Read Also: Pros and Cons of Bitcoin