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What gives BTC Value?

Bitcoin shares many of the characteristics that give traditional commodities and government monies value – scarcity, durability, portability, divisibility, fungibility and acceptability.
It can even be argued that BTC has an advantage over government monies and commodities in many of these categories.

Scarcity

BTC supply is more limited than silver and gold supply, as there will only ever be 21 million BTC introduced to the network’s economy.

When the first block was mined in 2009, 50 BTC were released. Through this process, more than 18 million BTC have been made available as of 2020.

The number of BTC released in each block is cut in half roughly every four years to keep the total supply finite, in an event known as the halving (or halvening).

Durability

Any form of cash needs to be durable enough to be used over and over again. BTC private keys are numbers and letters, which can be stamped into stainless steel, backed up or divided into pieces, adding to their durability.

Portability

With BTC, you can carry around all your wealth on a flash drive, memorized in your brain or transfer it instantly via the internet.

Divisibility

All currencies carry denominations so people can purchase goods that carry differing values. EUR, for example, are divisible from EUR 200 bills down to cents.

BTC, too, is divisible and can be subdivided up to the eighth decimal place. The smallest unit of currency is called a Satoshi after Bitcoin’s creator. 1 BTC equals 100,000,000 satoshis (sats).

Fungibility

All units of money must be as uniform and interchangeable.

Like paper cash or gold, depending on how you received your BTC it will have varying degrees of fungibility. BTC that was involved in a crime, for example, may not be accepted by exchanges or merchants. (This remains an active area of research for Bitcoin developers.)

Acceptability

For something to store value, people need to recognize and accept that it’s worth something.

There are currently thousands of individuals and vendors accepting Bitcoin payments, and thousands of other small businesses taking payments and donations with Bitcoin.

You can also buy and sell BTC for other cryptocurrencies alongside more traditional currencies with us, online 24/7 to match your trades.
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