Why Do Bitcoins (BTC) Have Value? Who Controls it?

Bitcoin has shown tremendous growth since its inception in 2009. Like all other forms of money, this cryptocurrency grew in value as people trusted and found it valuable. Bitcoin, the largest cryptocurrency in the crypto market by market cap, is something that changed how people viewed money. Till then, it was something physical and controlled by a larger, more powerful organization like governments or kings. Cryptocurrency was completely digital, secure, impossible to duplicate, and decentralized. There are several factors affecting the value of this currency. Back in 2010, someone paid 10,000 BTC for two slices of pizza, and it gained so much attention on the internet because 10,000 BTC is worth millions now. The growth was gradual as it was getting accepted by many. We will look into how Bitcoin gained value, the factors behind it, and who is the mastermind controlling it.

Why does Bitcoin have Value?

Bitcoin has value because people have trust in it and consider it a medium of transaction. Money gets value from the trust people have in it, among many other factors. The fiat currencies that everyone is familiar with get their value from governments backing them as a legal tender, and because it’s accepted all around the country. Backed by the government makes it trustworthy and credible, Bitcoin achieved the same without any government backing, which is why it is being talked about a lot. The cryptocurrency gained its value through trust, scarcity, and its utility. Getting rid of a single entity having complete power and control over the money, like the “government,” was the exact reason why Bitcoin was created. 

What gives Bitcoin Value?

There are several factors governing the value of Bitcoin. Since its inception in 2009, this cryptocurrency has shown a compound annual growth rate of ~102%. Going from being valued at merely nothing to 6 digits for a single coin is not a small feat. These are some major factors that give Bitcoin its value:

Scarcity

Just like how gold gets its value from its limited supply, Bitcoin gains value from its limited supply. There will only be 21 million coins mined; this controlled supply, when paired with huge demand, results in driving prices up. The fixed number of coins also helps in fighting inflation, as time passes by and demand increases, the price will stay in an upward trend. 

Utility 

Usefulness is something that adds value to something instantly. Bitcoin makes it possible to make borderless transactions in its true meaning. One could be anywhere in the world, and use this digital currency for transactions as its value remains the same everywhere – It’s like a global currency. Many companies, individuals, and even governments have started to accept it, making it even more valuable. 

Decentralization

Bitcoin is a decentralized currency providing people with complete control over their currency without having a central power governing its use. No banks, governments, or companies control Bitcoin; it runs on a network of computers called nodes covering all over the globe. This makes it almost impossible to kill the program, manipulate it, or shut it down, making it kind of immortal. 

Security

Trust is built through time and test. Bitcoin has gained the trust of people, showcasing incredible security features. It is nearly impossible to fake a transaction or manipulate the network. Each node that runs the blockchain has a record of all the transactions that have happened to date. This is available to the public like a transparent but tamper-proof ledger in which all transactions are verified by miners using their computational power. 

Adoption

The more people start using crypto, the more valuable it becomes. Without any marketing gimmicks whatsoever, Bitcoin has managed to reach ears even on the furthest ends of the globe. The more people start using the network, the more valuable it becomes, as the supply is limited – with demand, the value increases tremendously. 

Who Controls Bitcoin?

No one controls Bitcoin; it is a decentralized network consisting of developers, miners, individuals, and nodes. This means that there is no single entity that has control over the network; instead, it’s run and managed by everyone. Even the whole coding and software is open source, which means anyone can view, make suggestions, and provide upgrades. Even the suggestions are not taken into consideration unless agreed upon by the majority of the community participants. This unilateral control is unlike anything that’s been seen before, as it is digital and there are hundreds of thousands of people active on the network at any given time, making it quite impossible to manipulate the network.

Why Governments Don’t Have Control over Bitcoin?

Governments are among the most powerful institutions that control everything that comes under them, still Bitcoin isn’t under their control. Several factors protect this decentralized network from a central authority.

No Central Server

Bitcoin does not have a central server like all major software products and applications. It is a global network of nodes that runs Bitcoin, and it’s nearly impossible to shut it down. Since it is global and truly borderless, no single government can claim control over it. Even the creator of this network is still not known, which means even the country of origin can’t be found.

P2P Network

To make any changes to this public network, one must get approval from the majority of users, so governments cannot make changes to the program without the knowledge or approval of the public. Transactions are made P2P without any third party in between; this cuts down the need for approval from banks or governments.

Open Source Code 

The white paper and code for Bitcoin are publicly available as open source. This means that the system is transparent and no government can make changes to it without the public knowing about it. Any suggestions or improvements are reviewed and are only made after approval from the majority of participants. 

Final Thoughts

Bitcoin is one of the most valuable assets of this period, and it gained its value through trust and security. With thousands of users joining the network, it is only expected to grow even more in the future. Those who believed and invested in the network are now millionaires. This decentralized cryptocurrency represents the freedom and transparency that the public needs. Though Governments can have control over the exchanges and how they’re taxed, they can’t shut down, manipulate, or have control over the network; it would always be in the hands of people. P2P transactions have made it possible to do transactions without the approval of any banks or governments, giving complete control and privacy to the users. With no central power and truly borderless, Bitcoin can be considered as one of its first global currencies.   

Also Read: How Much Bitcoin Does Elon Musk Own