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Lens
Knowledge Seeker
Asked: 2023-09-15T15:01:15+00:00 In:

Why is bitcoin used as a store of value?

Bitcoin is used as a store of value because it appreciate over time. A lot of investors have benefited from this wonderful feature of bitcoin. what is your opinion?

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3 Answers

  1. Svishok
    Expert Mind

    Bitcoin serves as a store of value due to its characteristics: limited supply (only 21 million coins), divisibility, portability, durability, and decentralization. These features make it resistant to inflation and government manipulation. People invest in Bitcoin believing its scarcity will drive upRead more

    Bitcoin serves as a store of value due to its characteristics: limited supply (only 21 million coins), divisibility, portability, durability, and decentralization. These features make it resistant to inflation and government manipulation. People invest in Bitcoin believing its scarcity will drive up its value over time, similar to gold. Its digital nature also allows for easy transfer and storage, enhancing its appeal.

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  3. raaman
    Expert Mind A blogger and a writer interested in learning.

    Even though its status as a store of value is still up for question and are affected by a number of factors, there are reasons why people use bitcoin. There are some justifications why some individuals view Bitcoin as a store of value. Because of its finite quantity, bitcoin is a deflationary digitaRead more

    Even though its status as a store of value is still up for question and are affected by a number of factors, there are reasons why people use bitcoin. There are some justifications why some individuals view Bitcoin as a store of value. Because of its finite quantity, bitcoin is a deflationary digital asset similar to precious metals like gold, which have been used as value storage for a long time.

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  4. yusra
    Trusted Adviser

    There are a few key properties that make Bitcoin attractive as a potential store of value for some investors: Scarcity - Bitcoin's supply is capped at 21 million coins, creating digital scarcity. This provides the perception of rarity which historically leads to value accrual in resources. CensorshiRead more

    There are a few key properties that make Bitcoin attractive as a potential store of value for some investors:

    • Scarcity – Bitcoin’s supply is capped at 21 million coins, creating digital scarcity. This provides the perception of rarity which historically leads to value accrual in resources.
    • Censorship resistance – Bitcoin operates on a decentralized network, making it very difficult for any party to block transactions or seize funds. This makes it viable for those living under unstable financial regimes.
    • Portability – Bitcoin keys can be stored digitally making large amounts of money easy to move across borders. This portability lends itself to being a store of value.
    • Independence – Bitcoin is not issued or backed by any government or central authority. Its value is tied only to market supply/demand dynamics, not the monetary policy of specific nations.
    • Durability – As a digital asset, bitcoin does not deteriorate over time as long as it is securely stored. Lost private keys are often the only way bitcoin is destroyed permanently.
    • Growing adoption – More acceptance of Bitcoin as a legitimate asset class by corporations and investors has improved its prospects as a long-term store of value.
    • Transparency – The Bitcoin ledger is public and its supply schedule transparent, allowing holders to verify their bitcoin’s existence, authenticity and scarcity.

    However, challenges like high volatility and questions of long-term regulatory treatment still cast uncertainty on Bitcoin’s future price trajectories and ultimate role as a store of value asset.

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