What supports the value of Bitcoin (The Value Basis of Bitcoin)

The value of Bitcoin is supported by various factors. In the cryptocurrency world, Bitcoin is often referred to as a digital currency. It does not have any intrinsic value but is used to exchange for fiat currencies such as gold or other goods. The value of Bitcoin is determined by various traders, such as whether the price of a commodity you buy is too high or if someone presses the price of your goods lower, causing you to lose money. These are the issues that people often focus on when it comes to the value of Bitcoin. As a new emerging asset, Bitcoin has a high possibility of being accepted by the public, and therefore it has a certain market demand.

Firstly, it is important to understand why Bitcoin has become so popular. Many traditional financial institutions have a high level of trust and recognition for cryptographic assets. However, it is not a truly decentralized currency system but rather refers to people being able to use cryptographic assets for payments, purchases, holdings, and other operations. Bitcoin does not have the strong functionalities of anti-censorship and anonymity as some people believe. It also has various security risks, such as user fund security risks and security incidents in exchanges. Furthermore, due to the limited number of nodes in the Bitcoin network and the vulnerability to hacker attacks, many miners are unable to join the mining process. Moreover, most investors do not want their portfolios to suffer losses, such as the possibility of money laundering, but are only interested in making profits. In fact, Bitcoin itself possesses high socio-economic attributes and some countries have even issued their own legal currencies.

Currently, there is a lot of information about cryptocurrencies in the market. Although most mainstream media mainly focus on hype, more and more listed companies have realized the importance of blockchain technology and have entered the field of blockchain-related businesses. Companies such as Alibaba and Tencent have launched many products or services, bringing more commercial benefits to the entire industry and providing support for the development of the industry ecology. At the same time, businesses need to consider whether their operating costs are low and formulate corresponding regulatory measures to make their integration with other technology industries more seamless.

The Value Basis of Bitcoin

Editor’s note: This article is from 8btc (ID:bitcoin8btc), written by Wendy, and authorized by Planet Daily.

In the past few years, the price of Bitcoin has risen significantly. According to data from Coinmarketcap, the trading value of BTC is 940 billion US dollars at the time of publication. This means that if we divide the market value of Bitcoin by USD and JPY, it is equivalent to the total market value of one cryptocurrency. However, despite the fact that there are over one million locked or uncirculated cryptographic assets at present, they are still one of the most important investment tools globally.

Due to these factors, people have started to invest in various types of digital commodities. For example, real estate, stocks, and other bulk commodities, many of which are physical gold, are more divisible and easier to acquire due to their scarcity. As time goes by, this trend may continue, just as many investors say:

“If you are unsure whether you can use this technology, can you use it? The answer may be yes! In fact, you can understand this by owning a very concise and historically significant information.”

In addition, there have been discussions about blockchain technology. For example, a research team composed of cryptographers and economic experts recently appeared and they are committed to studying how to replace centralized ledgers with a new decentralized form. The report states: “When you consider anything, you must first know how much cash you have in your wallet.” Bitcoin is the ultimate source of all cryptographic assets. Source: Glassnode.

In order for this new project to succeed, developers are working hard to find ways to solve problems. Their current goal is to launch the first application on the Bitcoin network in the coming weeks.

As BitMEX CEO Arthur Hayes predicted earlier, “Once everything is ready and delivered, it will become a reality.” Although most people want to buy Bitcoin and use it as collateral, they actually do not care about the price fluctuations of Bitcoin. They just want to make sure that they do not hold it themselves, or their Bitcoin will stay on the exchange rather than being sold on the market. Therefore, no matter what support you are looking for, you can sell Bitcoin. If you believe that your product and service will not disappear soon, you can profit by purchasing something else. However, you cannot simply rely on waiting to earn back your income or expenditure. Instead, you can make money with a little cost. This is a unique feature of Bitcoin and the reason why it is the only available payment method in the world—it is not simply electronic currency like gold.