Why should you own Bitcoin?

The era in which we are today, the central bank will print new bills without linkage to any tangible asset(e.g., gold) which leads to inflation, the rise of prices, and a decrease in value of money. Does your bank serve you 24x7, 365 days? Does your bank charge minimal fee for international transfers?

This is where cryptocurrencies take charge. Cryptocurrencies are accessible to anyone. No one can freeze your account or limit your transaction amount. Let's consider an example, about 94000 bitcoins were transferred from one wallet to another, during the transaction, the price of one bitcoin was 10,300$, almost one billion dollars were transferred in a single transaction for a mere 600$ fee.

All the transactions ever made using a cryptocurrency are present on a distributed ledger, where you can check the authenticity of a transaction.

Bitcoin, the first-ever cryptocurrency, was never invented as a currency. As time passed, people who believe in it are calling it a store of value rather than digital cash.

When bitcoin was first invented in 2009, it doesn't have any value for almost 2 years. Early adopters tried to exchange bitcoins for goods, where a person offered 10000 bitcoins to anyone who bought him 2 pizzas(of 30$). Now, those bitcoins are worth 100 million dollars.

For any currency to be successful, it has to meet the following conditions, and also let's see how bitcoin is doing.

1)Bitcoin is very scarce

The supply of a currency must be monitored and regulated which otherwise leads to economic collapse. Bitcoin has a fixed supply of 21 million. The supply cannot be altered ever and the last bitcoin to be mined is scheduled in 2140.

2)Divisible to a great extent

A currency must be divisible into smaller units in order to be functional across all types of goods. Like how one dollar can be divided into 100 cents, one bitcoin can be divided into 100 million satoshis. Satoshi is the smallest unit of bitcoin and is named after the inventor.

3)Utility is the key

The main reason for the invention of currency is that it can be utilized as a trade-off for goods and services, instead of other goods(Barter system). And bitcoin is yet to be mass adopted as a currency, i.e., as an exchange for goods and exchanges. There are many merchants and organizations at present accepting bitcoins and various other cryptocurrencies.

4)Transportable easily throughout the world

Currencies must be transferable between individuals of different nations too. Bitcoins can be transferable to any individual, to any part of the globe within minutes.

5)More Durable than Steel

Currency must be reasonably durable. Coins and notes made of materials damage over time and become unusable and won't be accepted by anyone. Bitcoin is not a physical coin and is present only in wallets. The only way you can destroy a bitcoin is by sending it an invalid address, it can't be recovered forever.

6)Counterfeiting is Impossible

Printing fake currency leads to degrading the value of the currency. Fiat currency can be counterfeited. But it's practically impossible to generate a fake bitcoin.

In this digital era, the market penetration of a digital currency may not take long. Let's compare the valuation of another store of value like gold and fiat to bitcoin.
According to the World Gold Council, the total gold to be mined ever is estimated to be valued at 7.5 trillion dollars and the total value of fiat currencies of all nations is estimated to be 80 trillion dollars.

With present supply of 1,83,07,962 BTC and 1 bitcoin =7000$, total bitcoins are valued at 0.128 trillion dollars. Even if five percent of money i.e., 4 trillion dollars flows into Bitcoin, and with a fixed supply of 21 million, each bitcoin would be priced at 190,000$.

A young investor should consider highly risky investments like cryptocurrencies for some part of his portfolio. Cryptocurrencies have a limited supply for example total no. of bitcoins ever to be created is only 21 million but there are 36 million millionaires and 7 billion people in the world. Just think how scarce it would be if everyone or at least every millionaire wants to own one bitcoin.