Money can be used as an investment tool if it can be trusted to maintain its relative value over time. Throughout history, precious metals have been used as an investment tool in many societies. They have been shown to have a relatively stable value. However, instead of requiring individuals to carry bulky amounts of cocoa beans, gold, or other forms of currency, they were alternatively converted to minted currency. Yet many examples of minted currency were usable because they were reliable shelf storages, made of metals with long shelf lives and little risk of depreciation. But after a while, this also became insufficient because there were non-cash uses. Since it is not possible to pay with currencies without an intermediary, the foundations of Bitcoin, the first crypto money as an innovative and future currency, were laid.
Bitcoin offers an efficient way to transfer money over the internet and is controlled by a decentralized network with a transparent set of rules, thus providing an alternative to fiat money controlled by the central bank. We can see fiat coins or any valuable asset as an investment. There are many advantages to seeing Bitcoin and other cryptocurrencies as an investment tool.
1. Authenticity
In Bitcoin, there is no fake situation that is possible in investment instruments such as gold. You can control it from anywhere online. Since Bitcoin relies on public key cryptography and one-way hash functions that are impossible to break in time, Bitcoin counterfeiting is out of the question.
2. Severability
Bitcoin, which is a piece of code, can be broken down into very small parts. If Bitcoin becomes too expensive, the code can be modified to move the decimal point as needed. Buying 1 BTC can be expensive, but you can also get 0.000001 BTC. This is not the case when investing in gold or other precious metals.
3. Portability
No matter how much the value of Bitcoin increases, the wallet weight will always be the same. Since it is an investment tool that has no physical counterpart, it has no weight except for hardware intended to store your wallet information. In this respect, it is much more advantageous than cash or other investment instruments. It’s 0 grams if it’s on your phone, or a few grams if you’re using a dedicated hardware wallet like Trezor.
4. Storage Cost
If you choose the right device, storing Bitcoin can also be very reliable, safe, and inexpensive. It does not have expenses like a bank. A cost-effective wallet will do you all.
5. Transaction Cost
Anything physical will always be more costly than digital. Despite the high dollar value of Bitcoin, it is practical and efficient compared to all other investment vehicles due to its low transaction fee, high divisibility.
6. Predictable Supply
Bitcoin’s distribution and maximum supply is a well-known fact. There will only be 21,000,000 BTC, and it is known that this limit is guaranteed by consensus rules, which are impossible to change, very difficult.
Considering these details, Bitcoin can be considered as a more valuable investment tool in the future due to both its nominal price, market capitalization and many advantages.
