Why is bitcoin valuable?


Bitcoin and other online currencies are now getting promoted as alternatives to fiat money across the world. Are you one of those who keep wondering what makes any currency valuable? This article for you, keep reading to find out why is bitcoin valuable and what are its different features.

Bitcoin is a peer-to-peer online currency that debuted in 2009. With it arrived a new era of cryptocurrency. Bitcoin is one of the most sought-after cryptocurrencies that presents an effective mechanism for transferring funds over the internet. It is regulated by a decentralised interface, equipped with a transparent set of practices, hence rendering an option to central bank-controlled fiat currency. Also, despite its tremendous volatility, bitcoin proceeds to draw attention from investors for its long-term history of creating and sustaining value.

Why is bitcoin valuable

However, unlike stocks that hold a higher value due to their part control in a corporation, it becomes challenging to ascertain the value generated by this digital currency with such a brief history. This is why there is an ongoing debate about how to price this cryptocurrency, how the bitcoin price will look if used extensively, and the bitcoin price prediction.

About Unocoin

Established in the year 2013 as India’s premier corporation to deal with cryptocurrency, and more particularly bitcoin, Unocoin is India’s first and leading crypto assets trading and blockchain company, which aims to grow as a global player in the realm of crypto assets. It extends an extensive purchasing, trading, and storing platform with an educational and interactive website along with a very user-friendly and dedicated mobile application to perform crypto trading on the go.

What makes bitcoin valuable?

Bitcoin got devised to provide a decentralised financial system open to all and offered to its users a monetary and exchange system of value, considerably more solid than the prevailing fiat money system. The bitcoin value is reliant on the assurance of its users and never gets constrained or controlled by any bank or financial institution.

This is why the bitcoin price is so volatile. However, notwithstanding its volatile nature, investing in bitcoin holds exceptional prospects and many investors prefer trading in this cryptocurrency. Mentioned hereunder are some qualities that make bitcoin valuable.


The key to the sustenance of any currency’s price is its supply. A currency supply that is too extensive could make costs of goods increase, ending in economic collapse. Similarly, a currency supply that is too inadequate could also create financial difficulties. This concept of macroeconomics, known as Monetarism, intends to approach the role of the currency supply in the well-being and growth of an economy.

Moreover, with fiat currencies, many governments across the globe continue to issue money as a method of regulating scarcity. In addition, as a part of their economic policies, the government holds a flexible command over the currency supply in circulation, making changes depending upon financial factors. However, you must note that this is not the case with bitcoin.

The mining of bitcoin has now become scarce. No more bitcoin can be mined after 2140. As we know, scarcity drives a higher value, and it is no different in the case of bitcoin. Also, when the supply of this cryptocurrency reduces, it will likely cause a price increase. This is the reason investors will witness a lot of value in bitcoin’s scarcity.

This bitcoin’s scarcity has further pointed to the inception of the famous Stock to Flow model. The stock to flow model strives to foretell bitcoin’s expected price based upon its mining per year and the cumulative stock. Also, as per this model, the principal driving force in bitcoin’s value is its scarcity.


Prosperous currencies are separable into smaller incremental parts. For a sole currency system to operate as a means of exchange across all types of values and goods within a marketplace, it must possess the versatility correlated with this divisibility. The currency must further be adequately divisible to perfectly emulate the value of each service or good available throughout the economy.

When speaking of bitcoin, 21 million bitcoin are vastly more diminutive than the apportionment of most fiat money across the globe. Luckily, bitcoin can get divided up to eight decimal points, and the smallest unit, known as a Satoshi, equals 0.00000001 bitcoin. This provides for quadrillions of singular units of bitcoin Satoshis to get disseminated throughout a universal economy.

Moreover, you must understand that one bitcoin possesses a much larger extent of divisibility compared to the U.S. dollar and all other fiat currencies. It is this higher divisibility that makes bitcoin scarce, and if the bitcoin continues to witness a price rise, even investors with a tiny fraction of a bitcoin would also be able to take part in the routine transactions.


For any currency to be efficient, it must have some utility. By utility, we mean the people’s ability to exchange currency units for services and goods reliably. This is a principal reason why currencies get formed in the first place so that the market participants could bypass the goods barter. This utility is another feature that makes bitcoin most valuable. One of the most prominent selling points of bitcoin is its utilisation of blockchain technology.

For those who do not know, blockchain is a divided ledger method that is trustless and decentralized. By trustless ledger system, it implies that no people engaging in the bitcoin market require to place trust in one another for the system to operate accurately.

This is possible because of an elaborate arrangement of inspections and confirmations which is fundamental for blockchain ledger maintenance and new bitcoin mining. In addition, blockchain technology flexibility implies that it holds utility outside of the cryptocurrency range.


Every currency must get quickly conveyed between members in an economy to be beneficial. In the context of fiat currency, this implies that currency units must get exchangeable within a particular country’s marketplace and amidst nations through an exchange. Also, when speaking in terms of bitcoin, this cryptocurrency can get readily transferred between its members, regardless of its transaction size with crypto exchanges, wallets, and other instruments, at pretty economical costs.

In addition, transferability is a considerably significant aspect of any currency as this method of transferring funds in the prevailing system can take up to several days and charge higher fees. On the other hand, it might take enormous amounts of power to mine bitcoin and maintain the blockchain. The transportability of bitcoin is most convenient. In addition, people can save themselves from the hassles of retaining funds physically as they do not usually contain any physical copy of bitcoin in the process.


Durability is yet another element of currency, and for every currency to perform effectively, it must be durable. Notes or coins made out of supplies that can quickly get mutilated, vitiated, or destroyed, or deteriorate over time to the point of getting unusable, are not adequate. This was the principal reason why many digital currencies came into existence.

Also, this is the very reason for the widespread popularity of bitcoin and other cryptocurrencies. Moreover, bitcoin cannot get destroyed in the equivalent way that a dollar bill or other paper currency might get. Furthermore, another most prominent advantage of why is bitcoin valuable is that technically it can never get lost.

Although, if users or traders m
isplace their cryptographic code, the bitcoin in the identical wallet may get adequately unused permanently without actually destroying the bitcoin, and they will remain to exist in the blockchain records.


Just like a currency needs to be durable to remain effective, it must also remain non-counterfeited to retain its value. Also, a currency that can readily get counterfeited by malicious people would intrude on the economic system by engulfing it with fraudulent money, adversely influencing the currency’s price.

Hence, to overcome this problem, digital currencies got instituted and this is the reason why is bitcoin valuable. Since bitcoin hold a decentralised, complex blockchain ledger system, it is quite challenging to counterfeit this cryptocurrency. Also, scammers attempting to counterfeit would typically need to confuse all the complex networks and is next to impossible.

The sole means that a person can build a forged bitcoin would be by administering a process known as double-spending. This method of double spending is essentially a situation in which a person spends or conveys the corresponding bitcoin in two or more distinguished settings, efficiently generating a duplicate document.

While this is not a common problem with a fiat currency bill, it is unlikely to use the corresponding currency in two or more varied transactions, and it is reasonable only with digital currencies. However, you must note that the gigantic size of the bitcoin network makes the process of double-spending unlikely.

Also, to foster this attack, the person should have 51% of the total blockchain network power. Moreover, to manage a majority of all system power and control the rest of the network to forge records would require an unusual amount of work, capital, and computing capability, thereby rendering the probability extremely unpropitious.

The bottom line

Even after having all the above features, there is, regrettably, no solid and expert explanation as to why is bitcoin valuable. This widely prevalent cryptocurrency possesses the principal aspects of various worthy assets, valuable metals and fiat currency, but it still doesn’t fit into a quickly identifiable position. Moreover, bitcoin functions like cash without government support and holds scarcity similar to a commodity even in its digital form.

Also, a lack of general knowledge and misconceptions lead people to ask whether bitcoin holds any value at all. With terms such as “scam” used, it is apparent to recognise that some individuals still own groundless suspicions. However, eventually, bitcoin operates on a highly reliable network, and this digital currency holds a substantial amount of value placed on it by its investors, community, and dealers.

Frequently Asked Questions (FAQs)

1. Why is bitcoin more valuable than other cryptocurrencies?

Bitcoin is not only more profitable than physical currencies but over other cryptocurrencies as well. This is because this digital currency holds a better store of value and is more stable than its other counterparts.

You must further understand that one bitcoin possesses more value than one coin of any other cryptocurrency, and this is the reason for its widespread popularity. Also, bitcoin is one of the influential players in the market with the highest liquidity and is deemed to be the most reliable and stable form of cryptocurrency.

2. What is an alternative to bitcoin?

While earlier bitcoin was the only cryptocurrency prevalent in the market, various other digital currencies have now emerged as an alternative to bitcoin. Also, when speaking of the most reliable bitcoin alternatives, ethereum (ether) is the leading name gaining a lot of popularity in modern times.

Ethereum blockchain refers to a software platform and a programming language and operating interface that works on the blockchain. Also, apart from ethereum, various cryptocurrencies such as Cardano, solana, and litecoin have bestowed assuring potential as greener options to bitcoin.

3. What is the best cryptocurrency to buy?

In the present times, both Bitcoin and Ethereum are amongst the highest-trading digital currencies across the globe, with an extensive rush in Bitcoin and Ethereum rates and demand. Even though both Ethereum and Bitcoin can get employed as a substitute to present fiat currency, Bitcoin is, in actuality, an alternative currency.

Apart from this, bitcoin, since its inception has shown tremendous growth and several people have gained higher returns by investing in bitcoin. Similarly, after its launch in the year 2015, ethereum also gained popularity. Moreover, due to its tremendous performance and advanced blockchain technology, many experts making ethereum and bitcoin price predictions say that ethereum will outshine bitcoin by the end of the year 2021.

However, this does not imply that bitcoin will lose its charm. Hence, we can assuredly say that bitcoin and ethereum are the two most beneficial cryptocurrencies to purchase in 2021.

Unocoin is India’s first and the most secure bitcoin trading app. This exchange app was founded in 2013. You can buy and sell bitcoin instantly using the Instant Buy and Sell feature. Not just this, you can also buy ETH and Sell ETH in no time. With more than eighty-seven coins listed on this best cryptocurrency exchange in India, you can also accept bitcoin from your friends from any location. You can also know which cryptocurrency works best for you with the price ticker and notifications. The most popular cryptocurrencies like Bitcoin (BTC), Ether (ETH), USDT (Tether), BNB, Ripple (XRP), Cardano (ADA), Solana (SOL), Binance USD (BUSD), Dogecoin (DOGE), Polkadot (DOT) and other popular altcoins can be traded on the go. The new Android and iOS applications make Unocoin the best cryptocurrency app. With the unique feature of the Systematic Buying Plan, you can buy and sell bitcoin and Ether periodically. What more? You can start your crypto journey using SBP for as little as INR 10. With another exciting feature called Crypto Basket, you can diversify your crypto portfolio based on market capitalisation (Market Cap) or Volume. These two excellent features make Unocoin the best cryptocurrency platform.

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Crypto products are unregulated as of this date in India. They could be highly volatile. At Unocoin, we understand that there is a need to protect consumer interests as this form of trading and investment has risks that consumers may not be aware of. To ensure that consumers who deal in crypto products are not misled, they are advised to DYOR (Do Your Own Research).


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