Bitcoin is the digital currency made in 2009. It generally follows an idea set in the whitepaper by mysterious & pseudonymous developer named Satoshi Nakamoto, and whose real identity needs to be verified. But, Bitcoin offers promise of the lower transaction fees compared to the traditional payment mechanisms online and is been operated by the decentralized authority, not like government-issued currencies.
There’re not any physical bitcoins, just balances kept on the public ledger in a cloud, which along with other Bitcoin transactions –can be verified by the huge amount of the computing power. Bitcoins aren’t issued and backed by any governments or banks, nor are the individual bitcoins that are valuable as the commodity. In spite of this being not legal tender, BTC charts high on the popularity, as well as has triggered launch of many virtual currencies referred collectively as Altcoins as per the latest BTC price.
Scarcity, Utility, Divisibility, and Transferability
Apart from question whether it’s the store of value, successful currency should meet some qualifications linked to scarcity, utility, divisibility, and transferability. Let us look at the qualities.
Scarcity
Important for maintenance of the currency’s value is the supply. The money supply, which is very large, can cause costs of the goods to spike, and resulting in the economic collapse.
Divisibility
The successful currencies are also divisible in the smaller incremental units. For the single currency system to work as the medium of exchange over different kinds of values and goods within the economy,
Utility
The currency should have utility to be very effective. Individuals should reliably trade the units of currency for services and goods.
Transferability
Currencies should be transferred easily between the participants in economy to be useful.