Why is Bitcoin expensive? on the possibility of currency replacement

Why is Bitcoin expensive? on the possibility of currency replacement
Hello. Today, I will explain why bitcoin is expensive and why people call it the currency of the future.

If you find any mistakes in my writing or have any questions, please feel free to let me know!

1. Scarcity

• First of all, Bitcoin is expensive because of its scarcity. Bitcoin has a limited number of 21 million, including what will be made in the future. This means that out of the 7 billion people in the world, there can't be 21 million people who can have one bitcoin. Of course, we can share 0.00000001 bitcoin, so many people can share it. In other words, very few people can have one, but there are many people who can have 0.000001 bitcoin. But it's also rare.

Then why only 21 million? Can't you clone it later or produce more? You can ask the question, because Bitcoin's technology is not set to be made anymore. The technology is called blockchain. That's why Bitcoin is rare.

1. Possibility as Internet currency

• Bitcoin is available as currency. This means that when you exchange goods, you are recognized as money. I’ll give you an example. If you go to the shoe store with a gold ball, you can change it to shoes. Likewise, if you give me bitcoin, I can change it to the product I want. But it's not in the real world, like gold or 10,000 dollar bills, and it exists on the Internet, so it can be traded without space constraints. It is possible to do business with the U.S. in Korea. It is drawing attention as a currency of the future because it can be used like currency without space constraints.

So how can we trust and exchange when we don't exist in the world? The question comes to mind. You will use your bank account. It says in my bank account how much my property is currently saved. It's similar to that. In fact, even if you don't have 10,000 dollar bills in your hands, if you have 1 million dollar on your bank account, you have 1 million dollar. Bitcoin is not a material in the real world, but it remains a number in the bank account, so you can trust and make a deal.

1. Stability

• Bitcoin is not compatible with the current situation, but it is a stable product without a controlling entity. This concept may be hard to understand in the current fluctuating price of Bitcoin, but it is certainly true. It's an item with reliable and stable value that can't Have you ever heard of inflation? Then you can easily understand it, but it doesn't matter if you don't know.

For example, a factory that makes 10,000 dollar bills prints a million dollar a day. In a year like this, the whole country will be flooded with 10,000 dollar bills. At first, we could have bought 10 bags of snacks with one 10,000 dollar bill, but now we can only buy one bag of snacks with one 10,000 dollar bill. At first, 10,000 dollar was enough, but later, 10,000 dollar is needed. Currently, the government manages to prevent printing of bills like this. But this means that if you make up your mind in the country, you can plunge the value of the money you have. Or this could happen if it's not managed. This has happened several times in history. (This is briefly described inflation)

• But Bitcoin can't be manipulated by someone. It's spread all over the world and it's not replicated. That's why the value doesn't change easily.

There are many other reasons, but for three main reasons, Bitcoin is likely to be used all over the world as a currency of the future. That's why people buy it in advance, so the deal is now expensive!

If you have any questions or find something wrong, please feel free to let me know! Thank you!