Why is Bitcoin becoming scarcer (Why is Bitcoin becoming more expensive)?

Why is Bitcoin becoming scarcer? Why is Bitcoin becoming scarcer?

On November 19, 2018, in the crypto circle, many people were asking whether Bitcoin is worth buying. But in reality, this is just because most people don’t have a deep understanding of digital currencies and no expert can provide an answer. So here’s the question: Do you think Bitcoin’s price will continue to rise? And if that really happens, what should we do?

Actually, the answer to this question is simple:

1. Bitcoin is still a niche asset right now, and with the development and popularization of the Bitcoin market, the demand for this “financial freedom” will continue to increase; 2. People are no longer willing to purchase cryptocurrencies with fiat currency, but as a means of storing value and a new investment tool, it is difficult to convince people to use Bitcoin. So the price of Bitcoin will definitely rise (even possibly exceeding $10 million), and the more it happens, the higher its volatility will be. 2. Many investors have already started accepting Ethereum or Litecoin; 3. For those who want to participate in cryptocurrencies, Bitcoin can serve as a substitute for gold and become their chosen investment target. 4. Some people believe that blockchain technology is a very innovative point, but its actual application scenarios are relatively limited and still far behind the mainstream financial sector. 5. Some experts believe that although substantial breakthroughs have not been seen yet, Bitcoin indeed has vast market potential. As we all know, Bitcoin will become one of the future means of value storage and payment.

Why is Bitcoin becoming more expensive?

Why is Bitcoin becoming more expensive? Will the value of Bitcoin continue to increase? Since Bitcoin’s birth in 2008, its price has been hovering below $20,000.

But now, the price has already surpassed $30,000, so why is the value of BTC continuously rising? What are the reasons?

1. It doesn’t only exist in the realm of blockchain; 2. It is a currency system created by computer scientists, cryptographers, and engineers together; 3. It is a form of electronic cash that uses cryptographic encryption technology to achieve peer-to-peer transactions.

Currently, there are mainly two types of cryptocurrencies in the market: one is Bitcoin (BCH), a digital asset based on distributed ledger technology; the other is Ethereum (ETH). Due to the inability of the numerous nodes in the Ethereum network to call smart contracts with each other, when these miners want to gain more computing power, they must confirm through a third party before sending the tokens to their own addresses. This makes this “anonymous” method become the mainstream payment method.

However, as a new decentralized monetary system, Bitcoin not only solves people’s concerns about the financial market but also allows more people to participate. The most important thing is to ensure its security and inability to be replicated. Therefore, Bitcoin’s future price should reach between $40,000 and $50,000!

2. Can this process continue since it has no physical support? The answer is simple: as more and more people start adopting it, its practical utility may be influenced. If we compare Bitcoin to gold or silver, then Bitcoin is equivalent to real money. But the problem lies in the fact that Bitcoin’s value has scarcity just like gold. Bitcoin itself also has great market potential and is worth paying attention to. It can circulate in the real world and can be used to purchase goods and services, such as real estate, and so on.

In addition to these, there are two other important reasons: first, Bitcoin, as a novel and unique asset class, may have much greater value than other investment products; second, Bitcoin still has a wide range of use cases globally.

Furthermore, even though regulatory agencies around the world have been introducing investment laws targeting virtual currencies, there is still a lack of relevant legislation in China. For example, our country prohibits the sale of illegally used electricity to residents, while also prohibiting all licensed operating companies from engaging in activities related to virtual currencies, including conducting ICO financing activities without the approval of the State Council, and so on. It can be seen that Bitcoin is in a process of rapid development. (I am the author Huang Xuejiao, exploring the real blockchain. For inquiries and reports, please add WeChat hxjiapg, please specify your position and reasons.)