bitcoin as digital gold
bitcoin as digital goldOleh: Muh. Sabri Rahman Pada 2015-12-28 20:54:17
Since centuries ago, gold has been seen as a high-value object by many community groups in the world. It is important to know that gold itself has no value - gold is only a shiny stone. The value of gold comes from the (rather confusing) fact that everyone agrees that gold has a certain value, and therefore gold is considered valuable. The reason why people choose gold over other objects is important to understand - because gold has certain characteristics that make it store of value better than other objects:
First, gold is rare. That is, the amount of gold is limited (there is only so much gold in the world - if too much then everyone can have it and gold will have no value). Gold is also soft (gold can be melted and formed into various small units such as coins, and more importantly when you change its shape into smaller units, it will not lose its value - unlike diamonds). Gold is also stable and not degraded, easily known and hard to imitate (made fake copies).
Bitcoin has all the same characteristics as gold. The amount of Bitcoin is limited (only a certain amount will be produced), Bitcoin can be broken down into smaller units without losing the value of the unit (1 Bitcoin = 100,000,000 Satoshi - the smallest unit of Bitcoin, just like cents in Dollars or pennies in Pounds, we can buy less than one Bitcoin), Bitcoin technology is also stable and will not experience degradation, nor can it be made fake Bitcoin. In addition, unlike gold, you can move Bitcoin anywhere in the world in minutes, regardless of the number of Bitcoin. That's why people refer to Bitcoin as digital gold, but digital gold is better.
Bitcoin also has value as a payment system. The more people use Bitcoin for payments, the more valuable this payment system is. Buying a Bitcoin is like buying a Visa stock, then using the stock to buy soda at 7-11. Because you pay with your Visa stock, the place for using Visa is increasing, (payment system) Visas are increasingly widespread and more valuable, so the value of Visa shares will be even more valuable (including the value of your own Visa shares!).
The value of Bitcoin comes from these gold-like characteristics, and also functions as a payment system such as Visa.