Wondering what motivates people to purchase Bitcoin? If so, here’s why more people rush to buy or own this virtual currency.
Maybe you know a friend or a relative that has bought Bitcoin recently. Perhaps, you’re wondering what motivated them to buy this digital currency. Bitcoin is the most valuable and the first cryptocurrency whose popularity has skyrocketed in recent years.
As digital cash, Bitcoin eliminates central authorities like governments and banks. It uses blockchain to create a public ledger and a peer-to-peer miners network that confirms transactions. A mysterious developer, Satoshi Nakamoto, launched it in 2009.
Since then, other cryptocurrencies have emerged. Some governments have also introduced cryptocurrencies that citizens can use legally. For instance, China created a digital Yuan that citizens can trade online. But the bitcoin system is the only authorized platform for citizens to purchase and sell this virtual currency. Nevertheless, Bitcoin remains the dominant cryptocurrency in market capitalization and price.
How Bitcoin Works
Bitcoin is a file that users store in a crypto wallet on smartphones or computers. Here are the primary terms that explain how this digital currency works.
- Blockchain: Blockchain is an open-source code that powers Bitcoin. This technology creates a public ledger or history of all Bitcoin transactions in chained blocks. The record is permanent and tamper-proof. What’s more, it enables Bitcoin users to use a similar understanding of Bitcoin owners.
- Bitcoin mining: Bitcoin mining involves verifying transactions in the network. This process ensures that nobody spends Bitcoins without having them in their crypto wallets.
- Public and private keys: Bitcoin wallets have private and public keys that allow owners to initiate and sign transactions digitally. And this facilitates secure ownership and transfer of Bitcoins.
People and organizations can make money by mining Bitcoin. The network rewards the first entity for verifying a transaction with new Bitcoins. However, Bitcoin mining requires high-speed computers and a lot of electricity. Therefore, mining Bitcoin might not be a lucrative venture for most people due to the high initial capital or investment, and therefore, most entities prefer buying it.
Why Buy Bitcoin?
People purchase Bitcoin due to its monetary system corresponding to the way humans exchanged value for the most significant parts of their history. The Bitcoin system is technologically-based on straight-forward verification, mathematical formula, and a record system. And it has spectacular implications where users exchange value with other users directly without knowing them.
Ideally, Bitcoin transactions don’t require parties to disclose personal or financial information. You need the recipient’s crypto wallet address to send them money. Also, they don’t have to know your real-world identity to send you funds.
The Bitcoin system is a natural and human invention whose basic concepts are fairness and freedom. Bitcoin presents an original money form that allows users to exchange value directly. Some people describe Bitcoin as honest money, a system that is mainly about exchanging value.
Cryptocurrency has rendered paper money and conventional banking analog. It combines value and technology to provide a more efficient and transparent payment system. Its rising value also makes it a tradable asset and an investment that people can purchase and sell for profits. Perhaps, the increasing worth is the reason most people buy Bitcoin.
Anybody who bought Bitcoin ten years ago will make more money than their initial investment if they sell it today. And some believe that this will be the trend until miners generate all the possible 21 million coins.
People and institutions have varied reasons for buying Bitcoin. However, Bitcoin’s value, underlying technology, and other impressive traits are why many people purchase this virtual currency. Today, this electronic currency is superior to most state currencies. It also facilitates the low-cost transaction. What’s more, Bitcoin transactions are more convenient and faster. These attributes, combined with the increasing value, prompt more people to purchase Bitcoin.